Cisco Acquires AppDynamics For $3.7B

Cisco has announced plans to acquire AppDynamics just a day before the latter’s intended IPO. Cisco will acquire AppDynamics for $3.7 billion in cash and equity in a deal that signals its interest in transitioning from a hardware and networking company to a software company with investments in cloud technologies. AppDynamics, which specializes in application performance monitoring, competes with the likes of New Relic and Datadog. Given that AppDynamics was valued at $1.9 billion, its acquisition for $3.7 billion underscores its perceived market value for Cisco as the networking hardware giant transforms its business model to recognize the criticality of application and infrastructure monitoring, management and optimization to contemporary enterprise IT. The deal proleptically illustrates the beginning of a tidal wave of tech mergers and acquisitions as tech behemoths attempt to reinvent themselves by acquiring promising startups as evinced by HPE’s recent acquisition of CloudCruiser to help understand IT infrastructure consumption and usage. Cisco’s acquisition of AppDynamics means that 2017’s first tech IPO has fallen by the wayside even as the year awaits a number of promising IPOs that could include the likes of Dropbox, Spotify, Airbnb and AppNexus