Cisco has had a steady appetite for M&A over the years, steadily devouring companies to both add revenue scale and to bring new talent and technologies into the fold. Yesterday they revealed a particularly interesting one, announcing their intent to acquire AppDynamics for $3.7B in cash and assumed equity awards.
AppDynamics develops and markets software for application performance monitoring. Basically, they make it easier for enterprises to make sure their use of the cloud is what they think it is. The company was preparing to IPO, but those plans will of course be off the table now assuming the deal doesn't hit any roadblocks. AppDynamics CEO David Wadhwani will stay on as the head of what will become a new Cisco software business unit.
Cisco hopes to integrate the new technology and talent it is acquiring through this deal into its IoT and Applications business. By offering application performance monitoring, they add complementary capabilities to network monitoring that they already offer to the enterprise market. With the rise of the cloud, the bundling of such capabilities should be a growing trend.
The deal is expected to close in the third quarter of Cisco's fiscal year, which I believe runs through the end of April.