The News: Cisco, late last week, announced its intent to acquire privately held ThousandEyes, Inc. headquartered in San Francisco, CA. ThousandEyes’ Internet and Cloud intelligence platform delivers deep visibility and insights into the digital delivery of applications and services over the Internet. Read more on Cisco’s press release.
Analyst Take: Cisco has continued, despite some global headwinds due to Covid-19, to make material investments in technology that will enhance its offering and help the company maintain its position as one of the leaders in network and application performance.
While the press release didn’t specify on the price of the acquisition, estimates have pinned the price at ~$1 Billion. Given the importance of this type of technology and Cisco’s well-defined strategy of acquiring portfolio companies to expand and enhance offerings to help enterprise meet its most significant IT challenges–I would estimate that this investment will pay dividends over the course of the next few years as companies continue to depend more on external networks and cloud/SaaS to run their businesses.
Where ThousandEyes Fits Into Cisco
Cisco’s notable strength in network and application performance in the data center will get an extended reach with ThousandEyes’ visibility into the Internet. The integration/offering of ThousandEyes will enable Cisco customers with an end-to-end view into the digital delivery of applications and services over the Internet. This is an area that has often lacked visibility but with ThousandEyes, these users will be able to understand challenges with applications delivered over the internet and also to improve network and application performance across enterprise and cloud networks. This of course, entails both internal and customer facing applications–enabling users to deliver enhancements in both areas.
ThousandEyes Will Fall into Company’s Networking Services BU
Cisco, in its announcement said that Thousand Eyes will become part of it Networking Services business unit, where ThousandEyes CEO and co-founder Mohit Lad will take on the role of GM of ThousandEyes, and Co-Founder, CTO Ricardo Oliveira will continue to drive ThousandEyes product vision and innovation strategy.
Overall Impressions of Cisco’s Acquisition of ThousandEyes
As companies continue to evolve their IT stack to be more inclusive of SaaS and new Hybrid/Multi-Cloud architectures, the ability to better see, control and predict operational behavior will grow. For Cisco, the company has been making investments to move beyond its core competence on-premises because I believe the company understands this transition.
Cisco has long been a cornerstone provider of network technology, but as tech evolves more and more out of the enterprise datacenter, acquisitions like this one will be paramount to the company’s critical role in continuing to support enterprise IT operations for a modern IT environment. Of course, we will need to watch the acquisition and how Cisco integrates it into the business, but I expect the move to prove successful as Cisco has become well versed in quickly integrating volumes of acquisitions.
Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice.