Cisco Consolidates Cloud Software Foray, Acquires ThousandEyes For Nearly $1B

In a push to consolidate its cloud software unit, Cisco Systems Inc. CSCO has purchased ThousandEyes, a firm that helps companies monitor network outages.

What Happened

Since Chuck Robbins took over as CEO in 2015, Cisco has been focused on expanding its cloud-based software portfolio to better serve customers who are moving to distributed environments, reported CNBC.

The purchase of ThousandEyes for nearly $1 billion will bring it into the fold of Cisco’s newly-formed Networking Services business unit, run by Todd Nightingale. Previously, Cisco acquired AppDyamics for $3.7 billion, a company whose software spots bugs in applications and fix them.

Nightingale said in a statement, “I'm excited to welcome the ThousandEyes team to Cisco.” Adding, “The combination of Cisco and ThousandEyes will enable deeper and broader visibility to pinpoint deficiencies and improve the network and application performance across all networks. This will give customers end-to-end visibility when accessing cloud applications, and Internet Intelligence will improve networking reliability and the overall application experience.”

Why It Matters

This is the first-ever acquisition Cisco has made completely online using Cisco’s Webex video-calling service due to the stay-at-home orders in place since March, reported CNBC. 

Last year ThousandEyes raised $110 million from venture investors, and according to its CEO Mohit Lad, it has retained those funds.

ThousandEyes' key customers include Microsoft Corporation MSFT, Slack Technologies Inc. WORK, Paypal Holdings Inc. PYPL and Lyft Inc. LYFT.

Cisco Price Action

Cisco shares traded 0.12% higher at $45.65 in the after-hours session on Thursday. The shares had closed the regular session 0.79% lower at $45.60.