Cisco’s IoT drive continues with $3.7 billion AppDynamics acquisition


Networking giant Cisco is betting $3.7 billion that helping businesses maintain and optimise their apps will be a key part of the IoT picture.

Cisco has a long history of sometimes puzzling (Linksys, Pure Digital) acquisitions, but it seems to be shopping with more discipline these days. Its diversification into enterprise communications seems to have gone well and it has just launched the Cisco Spark Board ‘interactive whiteboard’ to jazz up those tedious corporate meetings. But these days its focus seems to be as much on IoT cloud platforms, as indicated by the acquisition of Jasper.

AppDynamics focuses on three main product areas: application performance monitoring, end-user monitoring and infrastructure visibility. Essentially this means it claims to offer businesses the ability to ensure their apps are functioning properly and to monitor how end-users are interacting with the apps.

In a possible IoT future the relationship between businesses and consumers could well be increasingly dependent on apps, which will offer consumers greater choice and control over all these connected bits and bobs and, in turn, offer businesses an Orwellian level of insight into what consumers are up to. If Cisco wants to be the dominant IoT platform provider then this looks like a useful string to its bow.

“Applications have become the lifeblood of a company’s success,” said Rowan Trollope, GM of Cisco’s IoT and Applications Business Group. “Keeping those apps running and performing well has never been more important. Unfortunately, that job has only gotten harder, as IT departments and developers struggle with a tangled web of disconnected, complex data that’s hard to understand.”

“The combination of Cisco and AppDynamics will allow us to provide end to end visibility and intelligence from the network through to the application; which, combined with security and scale, and help IT to drive a new level of business results.”

“AppDynamics is empowering companies to build and successfully run the applications they need to compete in today’s digital world,” said David Wadhwani, AppDynamics CEO, who will remain and report into Trollope. “With digital transformation, companies must re-define their relationships with customers through software. We’re excited to join Cisco, as it will enable us to help more companies around the globe.”

“As companies across industries are expanding their digital infrastructure, IT departments are faced with vast amounts of complex, siloed data,” blogged Cisco M&A boss Rob Salvagno. “AppDynamics helps many of the world’s largest enterprises translate this data into business insights and empowers them to drive value for their customers in today’s digital world.”

AppDynamics was apparently about to IPO at an expected price of twice what Cisco paid, but buying a private company is presumably a lot more straightforward, so the premium is worth it. The deal is expected to close later this year and, if incorporated properly, will contribute to an increasingly comprehensive IoT platform offering. Who will Cisco buy next?

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