F5 is betting on AI adoption to shift workloads on-premises and drive sustained hardware revenue growth. The 30-year-old application security company wants to bring its partners along for the ride.
“Years ago, we said we were going to be hybrid and multicloud, and that we were going to stay committed to hardware and software while we were developing and bringing to market a SaaS product,” F5 SVP of Global Partner Ecosystems Lisa Citron told Channel Dive. “What we saw around us was people decommitting to hardware, moving to SaaS only models. We decided to stay with hardware.”
As AI pilots move into the production phase, enterprises have been stung by the mounting costs of paying by the token and the inherent risk of feeding data into a black-box frontier model. The reality check has brought many executives back around to the advantages of hybrid operating models, according to ISG research.
“More than 80 percent of enterprises are revising their cloud plans to accommodate AI workloads while addressing resilience, sovereignty and financial management requirements,” the IT research and consulting firm said in a July report.
F5 has reaped the rewards of the infrastructure strategy shift.
“We see lots of workloads coming back to data centers and that's largely a hardware conversation,” Citron said.
The company, which sells networking, security and load balancing appliances along with related software and services, saw revenue grow 11% year over year to $865 million during the three months ended June 30. Product sales accounted for more than half of F5’s Q3 2026 revenue, increasing 19% year over year.
“If there was a phase where customers were thinking about cloud-first anytime they were thinking about new applications, now we're in a phase where customers think about sovereignty first,” F5 President, CEO and Chairman François Locoh-Donou said during a July 27 earnings call. “They’re reinvesting in data centers or building resilience between their cloud infrastructure and their data center infrastructure.”
An inference inflection
In contrast to hyperscalers making headlines with billion-dollar investments in massive facilities built to train and run commercial large language models, enterprises are shoring up networks to run AI applications safely and efficiently both in the cloud or on-premises. Spending on infrastructure to support inference workloads will surpass investments in training capacity this year, according to a Gartner report published this week.
That, too, is good news for F5 and its partner ecosystem.
“The AI inference inflection is driving demand for F5, both indirectly as customers expand hybrid multi-cloud deployments, and directly through our three AI use cases: AI data delivery, AI runtime security and AI factory load balancing,” Locoh-Donou said.
The company, which Citron characterized as “100% channel,” revamped its partner technical credentialing program last month, adding an online training curriculum for its flagship application delivery and security platform. The company plans to roll out specialized courses covering core infrastructure, security, AI and automation across the F5 platform later this year.
“The complexity of the customer isn't going down so the role the partner plays is just as big as it ever was for them,” Citron said. “Customers are turning to them and asking, ‘What can you take off my plate?’ This is an area where partners can really help the end customer.”
There’s a substantial market open to partners. While the lion’s share of roughly $243 billion in U.S. data center spending is direct-from-vendor sales, nearly $80 billion flows through the channel, according to research firm Circana.
AI cost and security concerns have touched an enterprise nerve, setting off one of the largest hardware refresh cycles F5 has seen and reshaping IT priorities, Citron said.
Dell’Oro Group expects global spending on network security hardware, including firewalls and application delivery controller appliances, to exceed $90 billion within the next five years.
“AI infrastructure investment and risk-led refresh cycles are restoring momentum to network security hardware as enterprises replace aging systems and add capacity where performance, resilience and local control remain essential,” Mauricio Sanchez, senior director of enterprise security and networking at Dell’Oro Group, said in the report.
F5 is moving fast to upgrade its product line. In July, the company retooled its device-management control panel and committed to monthly hardened software releases. The previous month, it added AI capabilities to its web application firewall . A new generation of the F5 application delivery controller appliance rolled out to partners last year.
“ADC was a space that was pigeonholed as a heritage way of working, but the market has come back to us on that,” Citron said. “Load balancing, too. It’s now a key use case because having a big Nvidia server is like owning a boat. You’re paying for that boat even if you’re not using it.”
