Cisco splashes $3.7bn on application management firm AppDynamics

Firm will form a new software business unit within Cisco's IoT and Applications department

Cisco has made its first acquisition of the year, snapping up application-management vendor AppDynamics for $3.7bn (£2.94bn).

AppDynamics' flagship product is its Application Intelligence Platform, which claims to allow businesses to monitor, manage and optimise applications and infrastructure, and identify and automatically fix performance anomalies.

The California-based company will become a new software business unit within Cisco's IoT and Applications department. CEO David Wadhwani will continue to lead the company, reporting to the senior vice president and general manager of Cisco's IoT and Applications Business Group Rowan Trollope.

"Applications have become the lifeblood of a company's success. Keeping those apps running and performing well has never been more important. Unfortunately, that job has only gotten harder, as IT departments and developers struggle with a tangled web of disconnected, complex data that's hard to understand," said Trollope.

"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."

According to Cisco, the deal is expected to close during its third fiscal quarter of this year ending 30 April.

"AppDynamics is empowering companies to build and successfully run the applications they need to compete in today's digital world," said Wadhwani.

"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."

The AppDynamics acquisition is Cisco's first of 2017, and follows on from a tally of seven acquisitions in 2016, according to data from Crunchbase, including cloud data security company CloudLock for $293m and semiconductor firm Leaba for $320m.