AppDynamics’ $3.7 billion acquisition by Cisco Systems has two major implications for the DevOps space. On a tactical level, Cisco has committed to distributing AppDynamics’ agent software everywhere from the public cloud to individual devices connected to the Internet of Things (IoT) and in between. On a more strategic level, the company is positioning itself to be able to uniquely correlate IT operations data generated by applications and IT infrastructure to give organizations comprehensive visibility into their entire DevOps environments.
During a briefing with analysts and the media this week, Rowan Trollope, senior vice president and general manager of Cisco’s IoT and Applications Business Group, described how his company sees AppDynamics as a linchpin acquisition that propels the company well beyond its well-established networking and server infrastructure base. After the merger is completed, expected sometime in the third quarter, AppDynamics will continue to operate as an independent business unit within the IoT and Applications group, and current AppDynamics CEO David Wadhani will report to Trollope.
Trollope described AppDynamics as a complement to Cisco’s ongoing efforts to drive more recurring revenue. The company, which offers an application monitoring service delivered via the cloud, was poised to shortly go public prior to being scooped up by Cisco. AppDynamics is employed mainly by IT organizations to monitor applications running on public clouds. But Wadhani noted one of the fastest-growing segments of AppDynamics’ business is monitoring applications running in private clouds.
The data AppDynamics gathers in those environments can be correlated against, for example, the data Cisco collects via its Tetration analytics application, which the company launched last year. That capability, Trollope said, will significantly increase the total Cisco value proposition.
In fact, as hybrid cloud computing scenarios based on microservices and containers become more common, Wadhani noted that monitoring of complex applications running in production across multiple clouds will become a more crucial requirement. AppDynamics recently extended its monitoring service to include support for containers deployed in these environments.
Under the leadership of CEO Chuck Robbins, extending Cisco’s reach across the enterprise has become a high priority. Cisco recently abandoned a cloud interoperability service strategy. But its acquisition of AppDynamics suggests the company is shifting its focus to higher-margin software that generates recurring revenues across multi-year contracts.
Following the acquisition, Trollope said Cisco also plans to take advantage of its existing relationships with senior business and IT leaders to advance a vision of DevOps that provides organizations with visibility all the way down to how each customer engages with their IT resources. The issue Cisco needs to navigate is the degree to which those senior executives actually exercise control over DevOps. To date, DevOps has been more of initiative led by developers and IT operations staff than mandates from senior executives.
Wadhani said Cisco’s direct and indirect sales staff should significantly expand the number of organizations that are exposed to AppDynamics services. That means one way or another, DevOps is about to become a much broader discussion across the enterprise.