In 2017 networking giant Cisco continued its aggressive acquisition strategy, spending at least $6.6 billion acquiring eight different companies/assets. In addition, the company hit some significant milestones. It made its 200th acquisition, it secured two multi-billion dollar deals, and it moved into a number of burgeoning technologies.
Cisco is known for its bold acquisition strategy, even naming it as one of its pillars for growth. In a blog post, Rob Salvagno, Cisco’s head of corporate development and investments, is quoted as saying, “acquisitions become primary route when they have an ability to provide a capability, acceleration potential, or earlier market entry compared to partnering or developing in house.’”
The blog post also notes that 87 percent of key employees from the acquired companies continue to work at Cisco, and 20 percent of the company’s directors and above come from these purchases.
In 2017 Cisco’s acquisitions include companies that primarily make software-centric products, including Internet of Things (IoT), software-defined networking (SDN), and machine learning. While its acquisitions are intended to create greater diversification of services and software, 45 percent of company’s revenue is still from its core switching and routing hardware.
Here is a recap of the company’s 2017 acquisitions so far:
Not everyone agreed with the deal, with questions surrounding the price (AppDynamics was set t0 go public at a valuation of less than $2 billion). Others questioned why Cisco chose AppDynamics over other APM companies. Regardless, the purchase enabled Cisco to build a foundation for its application business and build a backend for IoT.
Since its acquisition, AppDynamics added new features and capabilities to its Business iQ performance monitoring platform. The new capabilities provide more insight into IoT devices. This includes evaluating performance and troubleshooting as more devices are added to the network.
On Oct. 23 Cisco announced its intent to purchase telecom cloud service company BroadSoft for about $1.9 billion. The acquisition adds to Cisco’s cloud collaboration portfolio with cloud voice and contact center solutions.
In a blog post, Salvagno wrote, “Following the close of the acquisition, Cisco and BroadSoft will provide a comprehensive SaaS [software-as-a-service] portfolio of cloud based unified communications, collaboration, and contact center software solutions and services for customers of all sizes.” He added in the same post that this will allow Cisco to target telecom providers with its software offerings.
The deal is expected to close in the first quarter of 2018. At that time BroadSoft will join the Unified Communications Technology Group at Cisco.
On Aug. 1, Cisco closed on its $610 million acquisition of privately heldsoftware-defined wide-area network (SD-WAN) company Viptela. The deal fits nicely into Cisco’s recent move toward intent-based networking.
One of the pillars of intent-based networking includes expanding this across the WAN, campus, and branch. According to a blog post, Viptela’s cloud-first SD-WAN solution will serve as the foundation for a unified solution across all of Cisco’s software, including its Digital Network Architecture (DNA) Center — also announced earlier this year.
Prior to the acquisition, Cisco’s SD-WAN product was based on its Intelligent WAN (IWAN), which gave customers WAN optimization on the company’s Integrated Services Router (ISR). Its SD-WAN also includes its Meraki product. The purchase of Viptela’s SD-WAN merely gave Cisco a pure-play offering. The deal will combine Viptela’s cloud-first network management, orchestration, and overlay technologies with Cisco’s routing platforms, services, and SD-WAN, including IWAN.
Another realm that Cisco is pushing into is hyperconverged infrastructure (HCI) with the Sept. 22 purchase of HCI software company, Springpath, for $320 million. Cisco led Springpath’s $34 million Series C funding round in 2015, launching an HCI system, HyperFlex, a year later.
HyperFlex was Springpath software built on Cisco hardware. In an email to SDxCentral, Kaustubh Das, Cisco VP of product management for HyperFlex said: “Integration with other Cisco assets helps bring the simplicity of hyperconvergence into edge and remote and branch office locations in their operational footprint.”
Competition in the HCI market has been growing with vendors Nutanix and Dell EMC competing for the no. 1 spot. In addition to Cisco’s Springpath acquisition, Hewlett Packard Enterprise (HPE) made a similar move by purchasing HCI software maker Simplivity. In addition, Microsoft quietly launched its HCI in 2016, and NetApp debuted its enterprise grade HCI system last month.
In bringing its HCI software in-house, Springpath will join Cisco’s Computer Systems Product Group.
The growing buzz around artificial intelligence (AI) wasn’t lost on Cisco. In May the company acquired conversational AI startup MindMeld for $225 million in cash. Privately held MindMeld holds over 10 patents (some pending) that enable human-like conversational enterprises for applications and services.
The MindMeld team became Cisco’s Cognitive Collaboration team, reporting to the IoT and Applications group at the company. It is part of CiscoLearn.
The technology will be implemented into Cisco’s communications platform for enterprises, Cisco Spark, to create more natural (read: human-like) interactions with applications and devices.
Observable Networks, undisclosed
Cisco acquired privately held Observable Networks for an undisclosed amount on July 31. The company will become part of Cisco’s Security Business Group. Observable Networks provides cloud-native network forensics security applications, delivered as a service. What made it a vital purchase for Cisco was its support for Amazon Web Services (AWS) and Microsoft Azure public clouds.
This enabled Cisco to extend Stealthwatch, its security product, to the cloud, while improving its behavior analytics and network visibility tool with the help of Observable.
Since the acquisition, this has been rebranded as Cisco Stealthwatch Cloud.
While this was Cisco’s only security startup purchased this year (so far), the company has purchased a number in previous years. This includes Lancope for $453 million, OpenDNS for $634 million, and Portcullis in 2015; and CloudLock for $293 million in 2016. Observable, at Cisco, will be overseen by David Ulevitch.
As of Nov. 1, Cisco finalized its 200th acquisition with its purchase of AI startup Perspica for an undisclosed amount. Not only was this a milestone moment for the company, but Perspica was the first acquisition added into the AppDynamics fold.
Perspica provides machine learning and data processing in real-time within private and multi-cloud environments.
The impact of this addition to AppDynamics remains to be seen. However, in a blog post, Salvagno wrote the combination would leverage the full power of machine learning to analyze application-related data to provide real-time insight.
Saggezza Advanced Analytics Team, undisclosed
In May Cisco continued to add to its analytics footprint by acquiring the advanced analytics team, and accompanying intellectual property, from Saggezza, a privately held technology services team. The Saggezza team specialized in analytics on cloud and secure platform development. The team joined the enterprise networking engineering group at Cisco to provide insight and growth within its DNA development efforts, and increase its SaaS offerings.