Cisco buys AppDynamics for $3.7 billion just before its IPO

Cisco has announced that it would be acquiring application intelligence software company AppDynamics that had filed to go public just last month, for $3.7 billion in cash and assumed equity awards.

This is Cisco’s second big acquisition after Jasper Technologies for which the company paid $1.4 billion. For cisco, AppDynamics broadens its capabilities and brings a platform that can analyse application performance across Cisco software and gear.

"The combination of Cisco and AppDynamics will allow us to provide end to end visibility and intelligence from the network through to the application; which, combined with security and scale, and help IT to drive a new level of business results," said Rowan Trollope, Cisco senior vice president and general manager of Cisco's Internet of Things and Applications Business Group in official blog post.

AppDynamics aids users in tracking the performance of business applications, which help them get a deeper look into the guts and inner workings of their applications. By having a better overview, companies can more effectively spot chokepoints and performance issues that may be potentially holding back transactions and other kinds of action.

"AppDynamics is empowering companies to build and successfully run the applications they need to compete in today's digital world," said David Wadhwani, AppDynamics CEO and president. "With digital transformation, companies must redefine their relationships with customers through software. We're excited to join Cisco, as it will enable us to help more companies around the globe."

AppDynamics will continue to be run by its CEO David Wadhwani under a new unit housed in Cisco's Internet of things division. Wadhwani will report to Rowan Trollope, chief of Cisco's IoT and applications unit. The deal is expected to close in the fiscal third quarter, said Cisco.