Cisco the world leader of networking gear have recently expressed their intention of acquiring AppDynamycs Inc. for $3.7 billion, a young company proposing a platform that analyses the performance of business application. This acquisition follows a series of other measurements showing the networking world leader is looking to refresh their offer on the market.
Cisco system Inc, the giant of hardware networking business, seems to be trying to diversify in response to new devices on the market that are changing the way we access the net. More recently, the hardware maker announced the intentions to acquire AppDynamics by the end of Cisco’s third fiscal quarter. The decision comes right after AppDynamics’s announcement of going public in 2017 pricing its first IPO. According to Bloomberg the acquisition will be made in cash and assumed equity awards for almost $2 billion more than the young company’s current value. Cisco’s head of corporate strategy, Hilton Romanski, said the difference in prices is due to Cisco paying for the company’s growth rate.
After the acquisition, AppDynamics will be integrating Cisco as a unit in the company’s IoT and Application business. The head of corporate strategy at Cisco has showed his optimism about the acquisition and considers the team to be a great asset in accomplishing the company’s objectives for 2017. AppDynamics had $314.5 million in revenue and was already competing against New Relic and larger companies.
The acquisition represents a more competitive strategy from Cisco with other software providers, a risk that the company is more than willing to take. Not so long ago, the company paid $1.4 billion for Jasper Technologies despite the claim last August that Cisco would be reducing their workforce by 7%. Nevertheless it looks like the hardware maker is trying to attract new clients by expanding their current portfolio.