Cisco buys AppDynamics for $3.7 billion, plots business performance expansion

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Cisco said it will acquire AppDynamics, which monitors application performance and business metrics, in a deal valued at $3.7 billion. The purchase gives Cisco more software heft and broadens its reach in analytics.

AppDynamics was planning to become a public company.

The combination of Cisco, a networking and data center giant, and AppDynamics isn’t that surprising. After all, AppDynamics brings a platform that can analyze application performance across Cisco software and gear. AppDynamics launched software dubbed BusinessIQ in a move to capture more analytics spending from CIOs.

Where things get interesting for Cisco and AppDynamics is that the combined company can become more of a business performance and analytics company.

AppDynamics was branching out into business performance since the applications it would monitor basically ran companies. By pulling out real-time metrics from applications, AppDynamics was becoming a business intelligence company as IT, application and business monitoring blended together.

Cisco’s plan is to use AppDynamics to provide a suite of monitoring tools that can combine everything from network performance to application monitoring to the Internet of things.

AppDynamics will be run by its CEO David Wadhwani under a new unit housed in Cisco’s Internet of things division. Wadhwani will report to Rowan Trollope, chief of Cisco’s IoT and applications unit.

The AppDynamics purchase is expected to close in the fiscal third quarter, said Cisco.

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