Cisco Acquires AppDynamics for $3.7B

Cisco continues its push into software as it picks up application monitoring vendor.

By Sean Michael Kerner | Posted Jan 25, 2017
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Cisco is growing its software portfolio with the acquisition of privately-held application intelligence vendor AppDynamics for $3.7 billion. AppDynamics had been scheduled to do an IPO, but instead opted to be acquired after Cisco made an offer that David Wadhwani, AppDynamics CEO and President, could not refuse.

"As an industry, we're moving from a world that  was predominately about systems of record to now focus on systems of engagement," Wadhwani said. "It's also inevitable that we're moving to a world dominated by systems of intelligence."

He added that in his view, in a world where people rely more on machines to make automatic decisions in real-time, the company with the most richly aggregated and correlated data sets will be the company that will be the platform for the enterprise of the future.

"If you look at what Cisco brings to the table and at what AppDynamics brings to the table, we're in the rarefied position that can help re-define not just how IT departments operate but how enterprises as a whole operate," Wadhwani said.

Understanding data and application isn't a new idea for Cisco either. In June 2016, Cisco announced its Tetration data center analytics effort.

Cisco's Senior Vice President and General Manager, IoT and Applications business, Rowan Trollope, explained how AppDynamics is different then Tetration.

"We have been looking at our analytics strategy for the last years," Trollope said. "A big part of Tetration is the ability to deeply instrument and report on the infrastructure."

Taking all the network and server information and understanding how it connects to real-world application performance has been a challenge. Trollope noted that even prior to the acquisition, Cisco was already partnering with AppDynamics to get application insights.

Wadhwani added that the visibility that organization gets from combining Tetration and AppDynamics is better than either product can do on its own. He also noted that many AppDynamics customers also use Splunk and there are integrations there as well.

According to Wadhwani, Splunk is a log monitoring tool that requires instrumentation. In contrast he explained that AppDynamics is a monitoring tool that looks at every line of code to understand what normal behavior for an application should be.

"The core difference between us and Splunk, is that we focus on watching everything all the time," Wadhwani said.

Sean Michael Kerner is a senior editor at EnterpriseNetworkingPlanet and InternetNews.com. Follow him on Twitter @TechJournalist.

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