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Cisco to pluck AppDynamics for $3.7bn, just before IPO

Borg wants you to assimilate real-time performance info for everything

By Simon Sharwood, 25 Jan 2017

Cisco has announced it intends to acquire AppDynamics, a maker of software that performs real-time monitoring of application performance, the better to understand the impact on infrastructure and the end-user experience.

The Borg's plucked the company mere days before it was expected to float on the stock market, an event expected to raise around US$1.4bn for a portion of the company.

While AppDynamics could point to over 2,000 customers and nine-figure revenues, it also had rather a lot of red ink to deal with. That's Cisco's problem now, as it will make AppDynamics a software business unit in its internet of things and applications business.

Cisco says it's bought the company because its customers like real-time information about everything. The Borg can already give them feeds to describe the state of their networks and assess security. This purchase gives Cisco the ability to also monitor applications.

Which is rather important seeing as lots of applications now face customers directly: knowing when a mobile website has decided to detour through a metaphorical a swamp is therefore of great interest at a time when punters expect everything instantly and will Tweet about less-than-perfect performance before sysadmins even notice that blinkenlights have turned orange. Cisco's promising this acquisition means those who need to know when an application wobbles will get “actionable insights” before the lights even warm up.

Rob Salvagno, who heads Cisco's merger and acquisition and venture investment team writes that the deal “also supports Cisco’s strategic transition toward software-centric solutions that deliver predictable recurring revenue.”

Which probably has the hardware folks at Cisco feeling just wonderful. ®

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