Cisco just announced their intent to acquire AppDynamics. AppDynamics is one of the leaders in the application performance monitoring (APM) space. Why is APM so important? Cloud.
Now it may sound marketing to just say "cloud" but the concepts and usage of cloud, as opposed to traditional infrastructure, are why this acquisition is so important. As enterprises shift more into cloud computing, whether it's on-premises or off-premises, they begin to see the true tenet of cloud, that the application is king.
In cloud, the final output of all the work is the application, as that's all the end-user sees. In many cases, especially in public cloud, IT won't have access or visibility into much of the underlying infrastructure and systems that support the application. In fact, as we move towards distributed systems and architectures, they shouldn't care. Thus, monitoring the application, from the end-user experience on back to the infrastructure, is the important cloud management pivot and APM is at the heart of that.
Thus, Cisco's acquisition of AppDynamics certainly gives them an incredibly important part of the cloud software stack and has the potential to make them a top player in the cloud management market. Of course, there are risks and challenges for this acquisition, both external and internal.
Externally, the market within APM and around it is expanding. Both traditional infrastructure vendors, as well as new cloud-born vendors, are getting into the APM market. Also, the market itself is shifting, with the broader concept of "end-to-end performance monitoring." A number of vendors, especially from the network monitoring market, are shifting into the same benefits and capabilities of APM products. I see the market becoming more of a battle in terms of "end-to-end performance monitoring," with the vendors needing to differentiate and prove themselves as the right solution for cloud.
Internally, Cisco needs to show that they can quickly integrate AppDynamics' IP with their other cloud software products and move to bring these capabilities to market. The key for Cisco is to not just bring AppDynamics into the Cisco cloud software portfolio but to quickly begin to enhance and develop AppDynamics. This greater integration of acquisitions is something that Cisco has not been as successful at as they need to be, with cloud, as can be seen by their acquisitions of Insieme, Assemblage, Metacloud, Piston, Jasper, and CliQr. Cisco have done very well in other areas--security for example--and need to be as sharp with this integration.
This acquisition of AppDynamics is a bold move by Cisco and immediately makes them a top vendor in the cloud management software space. If Cisco can take AppDynamics and not only integrate it but leverage it to grow Cisco's cloud software stack going forward, Cisco's cloud fortunes will be greatly enhanced and other cloud software vendors, large and small, will have to step up their product stacks to continue to compete.