For $3.7 billion, the network hardware manufacturing giant; Cisco agreed to buy AppDynamics. This move comes right before the launch of the IPO for AppDynamics this week.
Cisco acquires software maker; AppDynamics
In a press release, Rowan Trollope Cisco’s Group general manager applications and Internet of things and senior VP said,
“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, will help IT to drive a new level of business results.”
AppDynamics offering idea is to catch minor problems before they become bigger ones. Cisco will be adding a touch point with clients to its already growing portfolio of services and software through the acquisition of AppDynamics.
In a bird’s eye view, the move aims to enhance’ determination of performance issues in a company and possibly identify causes that may be affecting the other processes. Additionally, it will help their corporate customers in monitoring and tweaking the performance of their business systems.
David Wadhwani, President and CEO AppDynamics expressed the company’s enthusiasm joining Cisco for it will allow for AppDynamics to assist a lot more companies globally in building applications needed for success in today’s digital landscape and running those applications. The company will be absorbed under Cisco’s applications and Internet of Things division and Wadhwani will be at the helm of AppDynamics.
Cisco’s evolution continues
The shift in direction is as a result of the computing industry moving away from the software and fixed hardware solutions offered by Cisco and into cloud-based systems as cheaper alternatives. This is a continuation of recent software and service company acquisitions by Chuck Robbins, Cisco’s CEO in an effort to boost Cisco’s revenue growth.
Since Robbins became CEO in 2015 he is looking to revolutionize the company, offering clients more flexible and customized products, designed to generate recurring streams of revenue over time by including lines such as collaboration, security, and Internet of Things.
Cloud-based Internet of Things service platform developer; Jasper Technologies was acquired by Cisco February last year.
AppDynamics calls off IPO
AppDynamics initial plan was to launch the IPO in December, but due to the U.S presidential elections, they decided to delay the launch.
AppDynamics would have been the first to go public as a technology company this year as it was to price on January 25 evening. Earlier bankers had increased the projected price of AppDynamics’ IPO which would value it at around $2 billion.
Cisco’s acquisition of AppDynamics has led to the cancellation of the IPO. However, it is likely that AppDynamics was trying to gauge its value by testing the market in a move to prepare for acquisition by a bigger company.