Cisco buys AppDynamics in $3.7bn cash deal

Cisco scoops up real-time performance monitoring software company before it floats on stock exchange

Cisco has acquired AppDynamics in a $3.7bn cash deal, scooping up the company before a planned public share offering.

AppDynamics, whose customers include Tesco, Nasdaq and investment bank UBS, provides real-time performance monitoring software that, the company claims, can monitor applications from the code all the way up to the customer experience.

"Applications have become the lifeblood of a company's success. Keeping those apps running and performing well has never been more important," said Rowan Trollope, Cisco senior vice president and general manager of Cisco's Internet of Things and Applications Business Group.

He continued: "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."

Trollope added that the deal would enable Cisco 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".

The acquisition marks the biggest in a string of deals made by Cisco CEO Chuck Robbins since he took over from John Chambers in 2015. In less than two years, Robbins has overseen some 17 acquisitions, including the $1.4bn purchase of Internet-of-Things software developer JasperSoft.

Chambers had joined Cisco as a start-up in 1983 and was arguably one of the key driving forces behind the company's ascent, first as senior vice president in charge of worldwide sales and operations, before taking over as CEO in January 1995.

The deals indicate that Robbins is shifting Cisco away from its core networking and network security roots, turning it into a broader technology company. Accordingly, Robbins has slashed jobs in networking and networking hardware, while 'pivoting' towards software-defined networking.

However, it is yet to be seen whether Robbins can fully integrate the acquisitions and drive value from them.

AppDynamics had filed a registration statement for a proposed initial public offering on 28 December - even going as far as to reserve the "APPD" ticker symbol for itself.