Was Cisco's $3.7 billion purchase of AppDynamics a surprise?
Cisco's intent to acquire AppDynamics - officially announced on Wednesday Jan 25 2017 - is quite a surprise. Then again, it isn't.
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It's a surprise because AppDynamics was one day away from its IPO, giving nary a hint of courting a suitor. That would be an awfully expensive and troublesome camouflage. And if it was camo, it was amazingly airtight in this notoriously leaky information age. (As I write this, several press outlets report the deal went from idea to agreement in three days.)
It's not a surprise because:
- AppDynamics' APM competitors have been rapidly broadening their monitoring to yield better analytics with fewer blind spots. Cisco gives AppDynamics an exceptionally clear view of network performance and AppDynamics gives Cisco a clear view of application performance. APM solutions must continue to expand their data ingestion to provide optimum value.
- Cisco's strategy is to grow from being a networking vendor to an enabler of their customers' digital business, originally stated by ex-CEO John Chambers. Current CEO Chuck Robbins shifted this strategy into high gear. Robbins made it clear that Cisco must become a software powerhouse with a focus on applications. Acquiring AppDynamics is a big step out of Cisco's legacy image, delivering more of what Cisco's customer want from a digital business enabler: help tame my technology and make it agile - not just networks and security ... all of it.
Also: Cisco buys AppDynamics for $3.7 billion, plots business performance expansion | Cisco places $3.7 billion bet on AppDynamics: What it means
As for me, I have another vendor to cover now. Welcome to the party, Cisco.
Milan Hanson is a senior analyst at Forrester, serving infrastructure & operations professionals. Follow him on Twitter: @Milanvhanson.