Cisco Creates New Software Business With AppDynamics Acquisition

**Editor’s Note: Please click here for a recap of the biggest channel-impacting mergers in November-December 2016.**

Cisco’s IoT and Applications business is about to expand with the creation of a new software business unit that will include AppDynamics, a pending acquisition, and cash deal worth $3.7 billion, that the company announced on Wednesday.

AppDynamics is a San Francisco-based, privately held application intelligence software company. AppDynamics offers a unified suite of performance management applications that include: application performance management, end-user monitoring, infrastructure visibility, and application analytics. In November 2016, the company introduced Business iQ, a new App iQ performance engine designed to help businesses drive performance through every phase of digital transformation.

“Applications have become the lifeblood of a company’s success. 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,” said Rowan Trollope, Cisco senior vice president and general manager of Cisco’s Internet of Things and Applications Business Group. “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.”

And, in a company blog, Rob Salvagno, vice president, corporate business development at Cisco wrote:

“Together with Cisco’s … digital network architecture, customers will now have unprecedented end to end insight across their technology stack, from infrastructure to application. With this insight, companies will be equipped to improve customer experiences and accelerate revenue opportunities. The acquisition of AppDynamics also supports Cisco’s strategic transition toward software-centric solutions that deliver predictable recurring revenue.”

In March 2016, Cisco completed its acquisition of Jasper and its cloud-based IoT service platform. At that time, Cisco said that the two companies would work with enterprises and global service providers to manage and drive a wide range of connected devices and IoT services that deliver a predictable recurring revenue business model.

AppDynamics CEO David Wadhwani will head the new software business unit. Wadhwani was appointed CEO in September 2015 after company founder Jyoti Bansal turned over the reins of the day-to-day operations and moved on to a chief-strategist role. Application Intelligence company AppDynamics was founded in 2008 by Bansal, company chairman and member of is board of directors.

At the end of December 2016, the company publicly filed a statement for a proposed initial public offering (IPO). Cisco snatched up AppDynamics just days prior its IPO.

The deal is expected to close in Cisco’s third quarter of fiscal year 2017.