Cisco Systems have announced a $3.7 billion deal to buy AppDynamics, a startup specialising in improving the performance of applications.
The acquisition of AppDynamics came as the San Francisco-based startup was on the cusp of going public with an initial offering of stock. AppDynamics software enables businesses to monitor performance of applications and figure out ways to avoid problems and get them to run more smoothly.
The combination of Cisco and AppDynamics will allow us to provide end to end visibility and intelligence from the network through to the applicationCisco
Consumers are increasingly using applications, typically on mobile devices, to interact with businesses.
Last year, Cisco announced that it was trimming its global workforce by seven percent as it shifts its focus from networking hardware to software and services.
The plan to eliminate 5,500 positions came as part of a corporate restructuring aimed at reducing expenses in "lower growth areas" and investing in Cisco priorities such as security, cloud computing, data centres, and the internet of things, executives said at the time.
Faced with a slowdown in its traditional products such as routers for telecom networks, Cisco has been trying for several years to reorient to fast growing sectors.
The company also seeks to increase revenue from ongoing subscriptions for services or software, as compared to sales of equipment.
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