EMA Impact Brief
Cisco Acquisition of AppDynamics: Wealth of Possibilities for Future of APM
Date: 02/07/2017 Length: 4 pages Cost: $25.00

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On January 25 2017, Cisco Systems (NASDAQ: CSCO) announced its intent to acquire AppDynamics, a private, venture-funded company, for $3.7 billion in cash and equity. The acquisition is expected to close in Cisco's third quarter of fiscal year 2017 which ends on April 30. AppDynamics will remain under the leadership of current CEO David Wadhwani and will function as a new software business unit within Cisco's IoT and Applications business.

This acquisition comes on the heels of a planned AppDynamics IPO, in its late stages at the time of the announcement and anticipated as one of the top software IPOs in recent years. In the press conference accompanying the announcement, AppDynamics executives indicated that the IPO was "oversubscribed" prior to the time the acquisition was agreed upon, and that a decision had been made to raise the IPO price range. They also indicated that the decision to be acquired versus going public was made in order to "accelerate vision and technical lead and accelerate go to market scale."

From the EMA perspective, this partnership potentially positions the combined companies for unparalleled visibility to the technology elements supporting performance automation for on-premises, web, cloud, Internet of Things (IoT), and mobile applications. Successfully achieving this potential, however, is highly dependent on the next steps taken by executives and product designers to develop and maximize the unique combined synergies that the Cisco and AppDynamics product lines could potentially offer.

This EMA paper details the background and potential impact of the combined companies on the IT industry, particularly in the context of Application Performance Management (APM). 

Julie Craig


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