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Cisco Partners: AppDynamics Is An Application Performance Game Changer, Opens Up 'Amazing New World For Partners'

Cisco partners said the networking giant's $3.7B acquisition of AppDynamics will be a game changer in the application performance industry and drive network refreshes for the channel.

Partners are cheering Cisco's $3.7 billion acquisition of AppDynamics saying the tighter integration of applications to the network will vastly improve the end-user experience while opening up "an amazing new world" of opportunities for the channel with increased network refreshes occurring over the next 18 months.

"This key thing here is that applications are the future – that's it, and this is what everyone needs to focus on, and Cisco just nailed it," said Jamie Shepard, senior vice president for strategy and healthcare at Lumenate, a Dallas-based solution provider who partners with both Cisco and AppDynamics. "This is such a smart business move. It's less about the technology and more about Cisco addressing what has been a separate conversation – what is the end user experience like? Well, it all starts at the application level and Cisco was not addressing that."

The San Jose, Calif.-based networking giant unveiled plans Tuesday night to acquire application performance monitoring and management provider AppDynamics for $3.7 billion. Cisco said combining the two companies will provide customers intelligent and actionable insights to help speed up business decisions and improve network performance.

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By having end-to-end visibility from the network through the application, Cisco is eliminating the "finger pointing" between infrastructure teams and application developers when a customer has an issue, and will "wildly improve" the end user's overall experience, said partners.

"Cisco was not tied to the application at all. They can now say, 'hand me a good application and I'll make sure the network is aligned with that,' because Cisco can build AppDynamics right in," said Shepard. "You'll be able to monitor your applications, see your application, see how it goes across the network, and at the same time you are able to look at your network. This eliminates all arguments."

Kent MacDonald, vice president of business development at Long View Systems, Calgary, Alberta, a Cisco Gold Partner, said there's now a mandate for everyone to truly understand the end user experience which comes down to network provisioning and resources to support the application. Cisco, he said, is now bridging those two worlds together.

"I can remember the days where it was either the network or the application, so now it will be one judge and jury," said MacDonald. "This really allows the Cisco partner to expand their value proposition to their customers and to bring the integration of the network and application experience into an integrated platform."

Over the past few years, Long View has invested in expanding the company's application practice. Cisco's "bold" acquisition of AppDynamics aligns to the solution providers vision and creates opportunities to enhance support of network infrastructure and applications to their customers, MacDonald said.

"By Cisco investing in application toolsets, it aligns to how we envision the alignment of infrastructure, networking and application are all integrated. And dealing with those siloed technologies is both challenging for the customers and the partner," said MacDonald. "This allows the partners to bring that portfolio to our customer base and expand beyond hardware. Cisco isn’t just a hardware company, it's a software company and now it's an application company."

Partners said there's a large push for network refreshes due to the demand for larger bandwidth capabilities. Having both the network and applications working in harmony will be a good selling point for partners around eliminating performance issues.


"There's a big network refresh push over the next 18 months. Well, if the application doesn't perform well, I'm still going to have network issues and network people will be blamed for spending million on a new infrastructure if the user is still not happy with the experience," said Shepard. "So this is a great business move. They are definitely addressing the user and showing that they really do care about what the end user experience is like."

Regarding the $3.7 billion price tag for AppDynamics, partners admit its a bit steep, but it proves how valuable the company is to the industry.

"That a lot of money for an application performance tool. However, this is going to open up an amazing new world for us Cisco partners," said Shepard. " It's the perfect timing for them to get into this and that's why I feel like they paid a premium for it because others were probably bidding on AppDynamics."

Explaining Cisco's decision to buy AppDynamics, who was on the verge of an IPO, Cisco CEO Chuck Robbins in an interview with CNBC today said the San Francisco-based company is the market leader in their space.

"They are growing almost twice as fast as their next nearest competitor. They are growing faster than any publicly-traded software company today," Robbins told CNBC on Wednesday morning.

The acquisition is set to close in Cisco’s third fiscal 2017 quarter.

AppDynamics will 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.

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