Cisco Systems has done another software deal, announcing it will acquire internet monitoring startup ThousandEyes as it continues to shift away from its core hardware business.

The deal adds to a capability in monitoring that Cisco has been building since it acquired AppDynamics in 2017. ThousandEyes’ software “watches pretty much the whole internet to help companies figure out the source of performance problems of websites and web-based apps,” according to Business Insider.

Terms of the deal were not disclosed but CNBC said a person familiar with the matter confirmed the purchase price was about $1 billion.

Cisco senior vice president Todd Nightengale said the data that ThousandEyes generates from its web monitoring is more important than ever amid the coronavirus pandemic, as internet connections have come under tremendous pressure with huge numbers of employees working from home.

“With thousands of agents deployed throughout the internet, ThousandEyes’ platform has an unprecedented understanding of the internet and grows more intelligent with every deployment,” Nightingale wrote in a blog post.

As TechCrunch reports, the deal is “part of a broader move [by Cisco] to software and services as a complement to its core networking hardware business.”

“As companies have hunkered down during the pandemic, they have been buying much less network hardware, dropping the Q1 numbers to a seven-year low,” TechCrunch said, adding, “While Cisco owns the vast majority of the market, it obviously wants to keep moving into software services as a hedge against this shifting market.”

ThousandEyes, which was founded in 2010 by CEO Mohit Lad, has raised a total of about $111 million with an estimated valuation of $670 million as of February 2019. Its software can determine if an outage is the company’s fault or that of its service providers.

The company will become part of Cisco’s new networking services business unit, which is run by Nightingale.

“Cisco buying ThousandEyes adds to its network intelligence portfolio,” Lee Doyle, principal analyst at Doyle Research, told NetworkWorld. “ThousandEyes is a leading supplier network performance and internet monitoring, and it will be interesting to see how and where Cisco leverages this capability.”

Cisco, internet monitoring, software, ThousandEyes, Todd Nightengale



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