Cisco Buys AppDynamics: New Relic CEO Lew Cirne’s Reaction

Cisco Systems’ surprise buyout of AppDynamics is turning heads across Silicon Valley. Among those taking note: Lew Cirne, CEO of New Relic — which competes aggressively against AppDynamics in the APM (applications performance monitoring) market.

In some ways, Cirne is the grandfather (albeit a young one) of modern APM. He previously sold Wyle Technology to CA Technologies in 2006. By 2008, Cirne launched New Relic. Similarly, Jyoti Bansal, a former lead software architect at Wily Technologies, launched AppDynamics in 2008.

Fast forward to present day, and the AppDynamics-New Relic competition continues to intensify. So how is Cirne feeling about Cisco’s surprise $3.7 buyout of AppDynamics? As you might imagine, Cirne is talking up the deal metrics — along with New Relic’s own momentum.

Lew Cirne on the Cisco-AppDynamics Deal

“This acquisition [Cisco’s buyout of AppDynamics] provides tremendous validation of the market opportunity in front of us,” Cirne says. “As enterprises look to take advantage of monitoring to drive their digital businesses, they will have a clear choice between on-prem software from a legacy hardware company, or New Relic’s market-leading 100% Pure SaaS platform. Our Digital Intelligence Platform helps companies of all sizes manage their digital transformation and lead their businesses to the future.”

New Relic is set to announce quarterly results on February 7. In the meantime, the company points to stats from its previous quarterly report. For instance, New Relic has 15,000 paying customers — 1,500 of which are large enterprises and 40 percent of the Fortune 500.

Along the way, MSPs have gradually discovered APM and partner programs from both New Relic and AppDynamics


Return Home



    Will Sanders:

    While this acquisition validates there’s a huge market for APM providers, it’s pretty clear why AppDynamics was snatched up instead of New Relic – product synergies, growth trajectory, and complimentary target customer base.

    New Relic has 1500 large enterprise customers, and 40% of the Fortune 500, and according to New Relic’s latest earnings report (, they have
    • 140,000 Total Accounts
    • 14,000+ Paid Business Accounts (defined as those spending over $5k annually)
    • $17,000 Avg Annual Revenue per Paid Account
    In short, these numbers are NOT indicative of an Enterprise Customer Base. The majority of New Relic’s customers are clearly Small and Medium business.

    AppDynamic’s S-1 indicated they have 1975+ paying customers, including 55% of the Global 2000.
    (looks like Cisco was one of them

    With Cisco’s enterprise-focused go-to-market strategy, that’s likely a prime reason Cisco decided to acquire AppDynamics specifically. Seems like a good match. It’ll be very interesting to see how the two technology portfolios mesh moving forward.

      Joe Panettieri:

      Hey Will: Thanks for sharing your views. Let’s be sure to stay in touch as Cisco announces quarterly milestones, etc.

Leave a Reply

Your email address will not be published.