Cisco Systems paid $3.7 billion to purchase a startup specializing in improving the performance of applications.
The deal for 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.
“Applications have become the lifeblood of a company’s success,” said Cisco Internet of Things and business group general manager Rowan 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.”
Consumers are increasingly using applications, typically on mobile devices, to interact with businesses.
“As companies across industries are expanding their digital infrastructure, IT departments are faced with vast amounts of complex, siloed data,” said Cisco corporate business development vice president Rob Salvagno.
“AppDynamics helps many of the world’s largest enterprises translate this data into business insights.”
The deal should close by the end of September.
Cisco last year said 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 centers, and the Internet of Things.