Network behemoth Cisco Systems has announced its intent to acquire performance monitoring provider ThousandEyes. The COVID-19 pandemic has certainly slowed down parts of the economy, but not so Cisco’s acquisition machine. While no purchase price was given, earlier in the day Bloomberg speculated it was in the $1 billion range.
This may seem like a hefty price tag, but I’ve always been of the opinion that if an acquisition is a good one, the acquirer can’t really overpay. Take Meraki for example; Cisco plunked down $1.2 billion for the cloud WiFi vendor, but it opened up new market opportunities and brought new capabilities to the company.
I look at the purchase of ThousandEyes the same way. Most of Cisco’s acquisitions impact a business unit or two, and sometimes a few, but ThousandEyes has the ability to impact almost all of Cisco’s products. For those that aren’t familiar with ThousandEyes, the company is best known as an internet monitoring company that measures the performance of internet connections across the globe. Traditionally, people treated the internet as a “black box”; once traffic hits the net, enterprises, cloud companies and others have no insights or control.
ThousandEyes shines a light on internet blind spots
But not so. In reality, there is no “internet” per se. Rather it is composed of a number of networks that work together to send traffic from point A to B. But not all networks are created equal, and ThousandEyes became the first company to measure this. Over the past several years, it has evolved from being a network-monitoring vendor to one that provides insights into digital experiences.
Cisco has been masterful at catching market transitions
One of the hallmarks of Cisco’s acquisition strategy is its ability to catch market transitions at the right time. Five years ago, ThousandEyes was a nice to have, but we’re in the middle of a number of market transitions that now make it a need to have. This includes cloud computing, UC and CC shifting to a SaaS model, SD-WAN and the COVID-19 inducing work from home. Each of these increase an organization’s use of the network as part of the corporate network. The struggle for IT pros is that most management tools can’t see outside the traditional corporate boundaries. As the axiom goes: “You can’t manage what you can’t see.”
Cisco currently has a best-in-class set of network and application monitoring tools that provides visibility across the business network. The combination of Cisco and ThousandEyes will remove the delineation between public and private networks. When it comes to cloud and mobile applications, there’s one network, and now Cisco can measure, benchmark and manage user experience from the cloud to the endpoint and every step in between.
ThousandEyes is the first acquisition for Todd Nightingale in his new role as SVP and GM of Cisco’s Enterprise Networking and Cloud business units. Prior to this position, he was GM of Meraki. I’ve had the pleasure of meeting Nightingale several times, and he is obsessed with user experience and simplicity. And when I say obsessed, I mean in a Steve Jobs-kind-of-way, which is why Meraki has the high satisfaction ratings that it does. Under Chuck Robbins, Cisco has made great strides in improving the ease of use and experience of its products, and ThousandEyes can take that to the next level.
Expect to see ThousandEyes impact almost every area of Cisco
There are a number of low-hanging-fruit integration points for Cisco. The ThousandEyes data can make application performance management tools, AppDynamics smarter, provide more intelligence into SD-WAN products for better route optimization and even improve the usability of Webex.
During a call with media and analysts, Nightingale provided an example in which Webex could provide insights into the quality of the Internet connection. This is akin to the signal strength indicator on mobile phones and might help users determine whether to use video or not.
Another interesting use case is to embed the intelligence into its AnyConnect VPN client. Consider a scenario where calls are routed to work from home contact center agents based on the quality of the Internet connection. The risk with moving agents to a work from home model is customers calling into the contact center could have drastically different calling experiences based on the quality of the agents Internet connection. With ThousandEyes, agents in areas where the Internet is congested could be avoided until the issue clears.
This is a strong acquisition for Cisco because it addresses a future where the Internet becomes a core component of a business’s IT strategy. COVID-19 accelerated this shift, but it was already well under way. Cisco customers should expect to see many of the products they already use be smarter and perform better with the integration of ThousandEyes information.
Zeus Kerravala is an eWEEK regular contributor and the founder and principal analyst with ZK Research. He spent 10 years at Yankee Group and prior to that held a number of corporate IT positions.