Cisco snaps up AppDynamics for US $3.7 billion

Chuck Robbins, incoming chief executive officer of Cisco Systems (VentureBeat)

Software company Cisco Systems has acquired software software start-up AppDynamics for US $3.7 billion (A$4.91 billion).

According to Reuters, the acquisition price was double the private market valuation of AppDynamics, which was going to go to an initial public offering (IPO). AppDynamics will become part of Cisco’s IoT and Applications business. The start-up’s software helps companies monitor how fast their apps are running on servers.

Cisco spokesperson Jim Brady said that the acquisition would bolster Cisco’s revenue growth, which has stalled in its transition from being a hardware-based to software-based company. 

“As we continue to evolve our business toward a more software-centric, recurring revenue model, we are very pleased with our incremental growth in this area,” Brady said.

“We feel the acquisition of AppDynamics … will also accelerate our transition toward software-based solutions that deliver predictable and recurring revenue.”

According to the company’s blog, the acquisition will help Cisco’s clients to gain more insights about their operations.

“Customers will now have unprecedented end to end insight across their technology stack, from infrastructure to application. With this insight, companies will be equipped to improve customer experiences and accelerate revenue opportunities,” Rob Salavagno, vice president corporate business development wrote in the post.

“The acquisition of AppDynamics also supports Cisco’s strategic transition toward software-centric solutions that deliver predictable recurring revenue.”

AppDynamics‘s has had an Australian presence for more than two years through its office in Melbourne. The company hired former NetSuite global partners director Scott Janney as its first Australian channel chief in September 2016.