Cisco on Tuesday said it is planning to pay $3.7 billion to acquire AppDynamics, a provider of cloud application and business monitoring technology.
The combination of Cisco and AppDynamics is aimed at giving customers intelligent and actionable insights to help speed up business decisions and improve business performance, Cisco said.
The acquisition announcement comes just as the IT industry was looking forward to an expected AppDynamics IPO.
The AppDynamics acquisition is slated to close in Cisco’s third fiscal 2017 quarter. It is slated to become a new business unit under Rowan Trollope, senior vice president and general manager for Cisco's IoT and applications business. The division is expected to be led by current AppDynamics CEO David Wadhwani.
Rob Salvagno, Cisco's vice president of corporate business development, in a Tuesday blog post wrote that digital transformation and the cloud are making application performance ever more critical.
"Combining real-time visibility and intelligence at the network, security and application layers is transformational for companies. It can provide them with insight into the state of their business and most importantly, into the quality of their customers’ experiences," Salvagno wrote.
AppDynamics helps enterprises translate application data into business insights and provide end-to-end insight across their technology stack, Salvagno wrote.
"AppDynamics also supports Cisco’s strategic transition toward software-centric solutions that deliver predictable recurring revenue," he wrote.
The acquisition is a brilliant move by Cisco, said John Woodall, vice president of engineering at Integrated Archive Systems, a Palo Alto, Calif.-based solution provider and channel partner of both Cisco and AppDynamics.
Woodall told CRN he was unable to comment on whether the $3.7 billion price tag for AppDynamics was high or low.