Cisco Buys App Monitor
Cisco System's deal this week to acquire privately held application-monitoring specialist AppDynamics represents a bet that enterprises will increasingly rely on distributed applications and other data services that need to be closely monitored.
Cisco's (NASDAQ: CSCO) acquisition of the San Francisco-based company announced earlier this week is valued at $3.7 billion. It follows a $1.4 billion deal last year to acquire Jasper Networks.
Rowan Trollope, general manager of Cisco's Internet of Things (IoT) and Applications Business Group, said the deal aims to boost its delivery of new monitoring capabilities "from the network to the application."
The deal is expected to close during the third quarter of Cisco's current fiscal year early this summer. AppDynamics CEO David Wadhwani will head a new software business unit within Cisco's IoT and software business.
Observers noted that the acquisition underscores the steady shift to software-defined platforms that drive the performance of applications along with cloud computing and datacenter virtualization.
"Enterprise networking has changed dramatically as a result, becoming more dynamic through technologies such as software-defined networking. These changes have left CIOs and IT departments wondering how to deal with this complex new environment," noted Michael Segal, a marketing executive with Netscout, another application and network management vendor.
Cisco asserted that the acquisition would provide its networking customers with improved visibility across their technology stack from underlying infrastructure to distributed applications. In a blog post, Rob Salvagno, the head of Cisco's M&A and venture investment team, stressed that the deal addresses growing amounts of "complex, siloed data."
Segal of Netscout added, "More enterprises are relying on hybrid cloud environments, making software the backbone of the enterprise and data the glue that holds businesses together. Everything is interconnected."
Cisco's latest deal also underscores how enterprise technology giants with plenty of cash and relatively tepid sales growth are looking to acquisitions as a way to spur growth and gain market share.