May
29
2020
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Cisco to acquire internet monitoring solution ThousandEyes

When Cisco bought AppDynamics in 2017 for $3.7 billion just before the IPO, the company sent a clear signal it wanted to move beyond its pure network hardware roots into the software monitoring side of the equation. Yesterday afternoon the company announced it intends to buy another monitoring company, this time snagging internet monitoring solution ThousandEyes.

Cisco would not comment on the price when asked by TechCrunch, but published reports from CNBC and others pegged the deal at around $1 billion. If that’s accurate, it means the company has paid around $4.7 billion for a pair of monitoring solutions companies.

Cisco’s Todd Nightingale, writing in a blog post announcing the deal said that the kind of data that ThousandEyes provides around internet user experience is more important than ever as internet connections have come under tremendous pressure with huge numbers of employees working from home.

ThousandEyes keeps watch on those connections and should fit in well with other Cisco monitoring technologies. “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.

He added, “Cisco will incorporate ThousandEyes’ capabilities in our AppDynamics application intelligence portfolio to enhance visibility across the enterprise, internet and the cloud.”

As for ThousandEyes, co-founder and CEO Mohit Lad told a typical acquisition story. It was about growing faster inside the big corporation than it could on its own. “We decided to become part of Cisco because we saw the potential to do much more, much faster, and truly create a legacy for ThousandEyes,” Lad wrote.

It’s interesting to note that yesterday’s move, and the company’s larger acquisition strategy over the last decade is part of a broader move to software and services as a complement to its core networking hardware business.

Just yesterday, Synergy Research released its network switch and router revenue report and it wasn’t great. As companies have hunkered down during the pandemic, they have been buying much less network hardware, dropping the Q1 numbers to seven year low. That translated into a $1 billion less in overall revenue in this category, according to Synergy.

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. This deal simply builds on that approach.

ThousandEyes was founded in 2010 and raised over $110 million on a post valuation of $670 million as of February 2019, according to Pitchbook Data.

Oct
02
2019
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T2D3 Software Update: Embracing the Founder to CEO (F2C) Journey

It’s been four years since TechCrunch published my blog post The SaaS Adventure, which introduced the concept of a “T2D3” roadmap to help SaaS companies scale — and, as an aside, explored how well my mom understood my job as an “adventure capitalist.” The piece detailed seven distinct stages that enterprise cloud startups must navigate to achieve $100 million in annualized revenue. Specifically, the post encouraged companies to “triple, triple, double, double, double” their revenue as they hit certain milestones.

I was blown away by the response to the piece and gratified that so many founders and investors found the T2D3 framework helpful. Looking back now, I think a lot of the advice has stood the test of time. But plenty has also changed in the broader tech and software markets since 2015, and I wanted to update this advice for founders of hyper-growth companies in light of the market shifts that have occurred.

Perhaps the most notable change in the last four years is that the number of playbooks for companies to follow as they sell software has expanded. Today, more companies are embracing product-led growth and a less-formal, bottoms-up model — employees are swiping credit cards to buy a product, and not necessarily interacting with a human salesperson.

Many of the most high-profile, recent software IPOs structure their go-to-market operations this way. T2D3’s stages, by contrast, focus quite a bit on scaling a company’s internal sales function to grow. Indeed, both a product-led and a sales-led approach are viable in today’s growing B2B-tech market.

What’s more, the revenue needed for a software company to go public has increased dramatically in the last four years. This means that software founders need to focus not only on building a scalable product and finding scalable go-to-market channels, but also building a scalable org chart. These days, what is scarce for software founders isn’t money from investors; it’s great human talent.

So in addition to T2D3, my firm and I are now focusing on another founder journey: F2C, or the transition from founder/CEO to CEO/founder. This journey can take many paths, but ideally it starts with the traditional hustle to find early product/market fit.

Apr
23
2019
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Harness hauls in $60M Series B investment on $500M valuation

Series B rounds used to be about establishing a product-market fit, but for some startups the whole process seems to be accelerating. Harness, the startup founded by AppDynamics co-founder and CEO Jyoti Bansal is one of those companies that is putting the pedal the metal with his second startup, taking his learnings and a $60 million round to build the company much more quickly.

Harness already has an eye-popping half billion dollar valuation. It’s not terribly often I hear valuations in a Series B discussion. More typically CEOs want to talk growth rates, but Bansal volunteered the information, excited by the startup’s rapid development.

The round was led by IVP, GV (formerly Google Ventures) and ServiceNow Ventures. Existing investors Big Labs, Menlo Ventures and Unusual Ventures also participated. Today’s investment brings the total raised to $80 million, according to Crunchbase data.

Bansal obviously made a fair bit of money when he sold AppDynamics to Cisco in 2017 for $3.7 billion and he could have rested after his great success. Instead he turned his attention almost immediately to a new challenge, helping companies move to a new continuous delivery model more rapidly by offering Continuous Delivery as a Service.

As companies move to containers and the cloud, they face challenges implementing new software delivery models. As is often the case, large web scale companies like Facebook, Google and Netflix have the resources to deliver these kinds of solutions quickly, but it’s much more difficult for most other companies.

Bansal saw an opportunity here to package continuous delivery approaches as a service. “Our approach in the market is Continuous Delivery as a Service, and instead of you trying to engineer this, you get this platform that can solve this problem and bring you the best tooling that a Google or Facebook or Netflix would have,” Basal explained.

The approach has gained traction quickly. The company has grown from 25 employees at launch in 2017 to 100 today. It boasts 50 enterprise customers including Home Depot, Santander Bank and McAfee.

He says that the continuous delivery piece could just be a starting point, and the money from the round will be plowed back into engineering efforts to expand the platform and solve other problems DevOps teams face with a modern software delivery approach.

Bansal admits that it’s unusual to have this kind of traction this early, and he says that his growth is much faster than it was at AppDynamics at the same stage, but he believes the opportunity here is huge as companies look for more efficient ways to deliver software. “I’m a little bit surprised. I thought this was a big problem when I started, but it’s an even bigger problem than I thought and how much pain was out there and how ready the market was to look at a very different way of solving this problem,” he said.

Jan
23
2019
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Two years after being acquired by Cisco, AppDynamics keeps expanding monitoring vision

Two years ago this week, AppDynamics was about to IPO. Then Cisco swooped in with a big fat check for $3.7 billion and plans changed quickly. Today, as part of Cisco, the company announced it was expanding its monitoring vision across the business with a number of enhancements to its product suite.

AppDynamics CEO David Wadhwani says the company wants to monitor your technology wherever it lives in the enterprise, from serverless to mainframe. That kind of comprehensive view of a customer’s computing environment requires a level of built-in intelligence, and being part of a large organization like Cisco helped move more quickly toward this approach.

Last year when Cisco bought Perspica, a machine learning startup, it folded the engineering team into AppDynamics with a plan to make the product more intelligent. Given the sheer amount of information, a product like AppDynamics is monitoring, it’s a perfect use case for machine learning, which feeds on copious amounts of data.

Today the company announced the fruit of that labor in the form of a new Cognition Engine. Instead of simply pointing out that there is a problem, and leaving it to the DevOps team to figure out the root cause, the Cognition Engine handles both in an automated way. When you combine that with a rules engine, you can move from detection to root cause analysis to remediation much more quickly than in the past. Eventually Wadhwani expects the Cognition Engine can learn from the rules engine and begin to build even more automated fixes.

Root Cause Analysis. Screen: AppDynamics

The company is also announcing some new monitoring capabilities, including AWS Lambda, the serverless service, which has been gaining momentum in recent years among developers. The approach poses challenges to a monitoring tool like AppDynamics because the application doesn’t sit on a defined virtual machine, but instead uses ephemeral resources, served up by AWS at any given moment based on resource requirements. AppDynamics now offers a way to trace transactions on this type of infrastructure.

Finally, now that it’s part of the Cisco family, the product is looking not only at the application layer, it is expanding that vision to incorporate the networking infrastructure as well to help understand issues and set policies just as it does with applications.

All of this is part of what Cisco is calling a “central nervous system” for enterprise computing. It’s a marketing term designed to encompasses the overall vision of trying to locate issues, find the causes and fix them in as automated a way as possible across the enterprise computing landscape.

Dec
13
2018
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New tool uses AI to roll back problematic continuous delivery builds automatically

As companies shift to CI/CD (continuous integration/continuous delivery), they face a problem around monitoring and fixing problems in builds that have been deployed. How do you deal with an issue after moving onto the next delivery milestone? Harness, the startup launched last year by AppDynamics founder Jyoti Bansal, wants to fix that with a new tool called 24×7 Service Guard.

The new tool is designed to help companies working with a continuous delivery process by monitoring all of the builds, regardless of when they were launched. What’s more, the company claims that using AI and machine learning, it can dial back a problematic build to one that worked in an automated fashion, freeing developers and operations to keep working without worry.

The company launched last year with a tool called Continuous Verification to verify that a continuous delivery build got deployed. With today’s announcement, Bansal says the company is taking this to another level to help understand what happens after you deploy.

The tool watches every build, even days after deployment, taking advantage of data from tools like AppDynamics, New Relic, Elastic and Splunk, then using AI and machine learning to identify problems and bring them back to a working state without human intervention. What’s more, your team can get a unified view of performance and the quality of every build across all of your monitoring and logging tools.

“People are doing Continuous Delivery and struggling with it. They are also using these AI Ops kinds of products, which are watching things in production, and trying to figure out what’s wrong. What we are doing is we’re bringing the two together and ensuring nothing goes wrong,” Bansal explained.

24×7 Service Guard Console. Screenshot: Harness

He says that he brought this product to market because he saw enterprise companies struggling with CI/CD. He said the early messaging that you should move fast and break things really doesn’t work in enterprise settings. They need tooling that ensures that critical applications will keep running even with continuous builds (however you define that). “How do you enable developers so that they can move fast and make sure the business doesn’t get impacted. I feel that industry was underserved by this [earlier] message,” he said.

While it’s hard for any product to absolutely guarantee up-time, this one is providing tooling for companies who see the value of CI/CD, but are looking for a way to keep their applications up and running, so they aren’t constantly on this deploy/repair treadmill. If it works as described, it could help advance CI/CD, especially for large companies that need to learn to move faster and want assurances that when things break, they can be fixed in an automated fashion.

Sep
26
2018
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Instana raises $30M for its application performance monitoring service

Instana, an application performance monitoring (APM) service with a focus on modern containerized services, today announced that it has raised a $30 million Series C funding round. The round was led by Meritech Capital, with participation from existing investor Accel. This brings Instana’s total funding to $57 million.

The company, which counts the likes of Audi, Edmunds.com, Yahoo Japan and Franklin American Mortgage as its customers, considers itself an APM 3.0 player. It argues that its solution is far lighter than those of older players like New Relic and AppDynamics (which sold to Cisco hours before it was supposed to go public). Those solutions, the company says, weren’t built for modern software organizations (though I’m sure they would dispute that).

What really makes Instana stand out is its ability to automatically discover and monitor the ever-changing infrastructure that makes up a modern application, especially when it comes to running containerized microservices. The service automatically catalogs all of the endpoints that make up a service’s infrastructure, and then monitors them. It’s also worth noting that the company says that it can offer far more granular metrics that its competitors.

Instana says that its annual sales grew 600 percent over the course of the last year, something that surely attracted this new investment.

“Monitoring containerized microservice applications has become a critical requirement for today’s digital enterprises,” said Meritech Capital’s Alex Kurland. “Instana is packed with industry veterans who understand the APM industry, as well as the paradigm shifts now occurring in agile software development. Meritech is excited to partner with Instana as they continue to disrupt one of the largest and most important markets with their automated APM experience.”

The company plans to use the new funding to fulfill the demand for its service and expand its product line.

Oct
19
2017
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Cisco to buy Perspica and fold engineering team into AppDynamics

 Cisco announced today that it intends to acquire Perspica, a machine learning-driven operations analytics firm that has raised $8.5 million. Cisco intends to fold Perspica’s team into AppDynamics, the company it purchased earlier this year for $3.7 billion. Cisco did not share the Perspica purchase price. All of these machinations have a purpose. Cisco is of course at its heart a… Read More

Oct
18
2017
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Now part of Cisco, AppDynamics update looks to deepen understanding of business performance

 When Cisco acquired AppDynamics in January for $3.7 billion, it was a big surprise as the company was on the verge of going public. While it’s probably too soon to say how intertwined it will become in the Cisco product family, it continues to march forward announcing an update to the products set at the AppD Summit this week in New York City.
Today’s announcements build on the… Read More

Oct
17
2017
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Cisco using AI and machine learning to help IT predict failures

Cisco headquarters. We have known for some time that the number of signals coming from your IT systems surpassed the ability for humans to keep track of them years ago. Machines can help and have been for some time. The advent of artificial intelligence and machine learning has accelerated that ability and today, Cisco announced that it is using these technologies to help customers find failures before they… Read More

Jun
29
2017
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AppDynamics update pinpoints performance issues inside Docker containers

 AppDynamics released an update today with a nod toward the growing trend of containerization. The company, which was purchased by Cisco earlier this year for $3.7 billion, wants to help customers using Docker containers pinpoint performance issues. Read More

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