APM, Mergers and Acquisitions

Datadog CEO: Cisco-AppDynamics Must Evolve


In the application performance monitoring (APM) and network management world, a fast-growing David is barking at Goliath. Indeed, Datadog CEO Olivier Pomel is the latest executive to weigh in on Cisco's surprise $3.7 billion buyout of AppDynamics.

Somewhat similar to New Relic's spin on the deal, Datadog sees Cisco as a mature hardware company that needs to evolve quickly for modern cloud services. "This acquisition highlights the sense of urgency in mature hardware companies to move from rapidly commoditizing hardware businesses into software and application performance management," Pomel said. "This transition away from hardware hasn’t stopped at software, though, and is now leading enterprises to adopt modern cloud services and agile development processes."

The twist? Pomel insists that the biggest changes are yet to come. "We think this last part of the transition will be by far the most transformative to both enterprises and the vendor ecosystem," he said. "The biggest question for AppDynamics now will be whether they can evolve and be competitive in this new world within the confines of a cisco-centric application suite.”

Cisco: Application, Network and Security Monitoring

Cisco sees AppDynamics as the latest piece in an overall IT management puzzle, which includes network, security and application monitoring. AppDynamics focuses mainly on APM. Rivals like New Relic are expanding from APM to infrastructure monitoring. On the flip side, Datadog is extending from infrastructure monitoring to APM.

For channel partners, companies like AppDynamics, New Relic and Datadog present new ways to monitor and manage application performance in real-time. Those capabilities are particularly important as DevOps teams and MSPs strive to deliver and maintain the best possible customer experience across cloud, on-premises and mobile apps.

New Relic is publicly held. AppDynamics was preparing an IPO but will scrap those plans amid the sale to Cisco. Datadog is privately held and venture backed.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.