
Cisco Announces Intent to Acquire AppDynamics - roobeelee
http://blogs.cisco.com/news/cisco-announces-enterprise-news
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atishd
here's how the private investors did (roughly double returns to see at Cisco
valuation): [https://equityzen.com/path-to-
ipo/appdynamics/](https://equityzen.com/path-to-ipo/appdynamics/) (disclaimer:
i'm affiliated)

good news for late stage companies, now that public-only investors know they
have some competition.

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dmode
Is there a way to figure out how well employees did in this deal ?

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atishd
Still waiting on official figures on employee retention to be announced, but
it's fair to say all preferred concerted so whatever % employees owner will
convert for a decent portion of the buy out price. Say the retention piece is
10% or $370M, an employee that had 0.10% should walk away with ~$3.3M ($3.7B x
90% x 0.10%) plus anything they get under retention

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chrdlu
It looks like the acquisition price was about ~$14 or so. From the S1, it
looks like the following:

2014 employees had strike prices of $1.70-$2.43 2015 employees had strike
prices of $4.48-$7.02 2016 employees had strike prices of $8.10-$12.94

For the employees who didn't exercise and hold the shares for over a year,
this exit might have been worse than an IPO. In the IPO scenario, they would
have the option to hold the shares for more than a year which would make them
eligible for long term capital gains. In this case, the employees with options
will probably be taxed ordinary income tax which can be over 50% in some
cases.

While they will still have a great exit, such a high tax rate is still
painful. Sometimes for a company as solid as AppDynamics, it is worth it to
exercise early.

If you don't have money to exercise early, companies like the Employee Stock
Option Fund exist to help cover the costs of exercise and potential taxes.

(disclaimer: I work for the ESOFund)

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dmode
Taxes, death, and Cisco acquiring a company..

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frik
Dell bought a competitor, Thoma Bravo investor bought two competitors. MS has
some worse offering. As someone else mentioned MS and IBM were in a bid war
with Cisco over AppDynamics. So will MS or IBM try to buy the public company
New Relic or one of its competitors?

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jakozaur
They can try to buy Sumo Logic.

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frik
it's just analyzing machine data (logs) similar to popular tools such as
Splunk, in real-time and anomaly detection.

This thread is about APM software, not log analyses. AppDynamics and New Relic
and similar APM products offer a lot more insight.

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codemac
So I guess that IPO ain't happening. They amended their S-1 today, so sounds
like this was a pretty quickly made deal.

[https://www.sec.gov/Archives/edgar/data/1435043/000119312517...](https://www.sec.gov/Archives/edgar/data/1435043/000119312517015842/d209425ds1a.htm)

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robbiet480
Any ideas what they amended?

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memmove33
It would be nice to know how good this liquidity deal is for early/late
employees, after taking into account all dilutions, liquidation preferences
and "misc royalties" of preferred shares holders.

Could bring some hope (or one more slap in the face) for us easily screwable
early startup employees.

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atishd
See my above comment. Also, some employees and investors sold small stakes
over the years meaning they got some cash in hand earlier.

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smb06
Cisco wants to move up the application stack so it would make sense for them
to have someone that can give them application level visibility.

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ejcx
That's very interesting since they were IPOing. The price reported at 3.7B is
not much higher than what was expected from their IPO.

2017, in my opinion, is going to be a very interesting year in tech.

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mathattack
Perhaps they had some insight that it wasn't going to be that strong? Public
markets are very unforgiving if you have a few bad quarters. That 3.7B IPO
could wind up a 2B company after a few of those. CISCO stock won't get crushed
by a couple bad quarters from AppDynamics.

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nemo44x
They've been increasing the initial offer price the last week as demand was
high. From $10 to $14 a share. That's a positive sign for them.

To then get bought out at 100% premium from that is massively prosperous exit.
Consider their last private valuation was 1.9 billion it sounds like the
investors, founders and employees all have reason to celebrate tonight.

Congrats to them all for this very fortunate exit.

~~~
sulam
FWIW I was prepared to short the heck out of this stock at that valuation, so
perhaps it's good for them to get the liquidity now vs after a few quarters in
a rough market.

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AlexB138
We just implemented AppDynamics. I can't say this hits me as good news.
Hopefully Cisco is hands off with them.

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SteveNuts
How is AppDynamics compared to the other tools in your experience?

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coredog64
I've been using AppD for 2+ years, and it is better than nothing.

I have many complaints: Flash UI, data is rolled up almost immediately, use of
averages, lots of capability is provided by ancient and unmaintained third
party plugins. They have weird notions of compatibility (agent has to be same
major version as controller) which leads to heartache when they don't migrate
your SaaS controller when they said they would. Worst of all is several times
the Java agent itself has been the source of a memory leak. I would expect
more based on the price.

More recently, they have started trying to be all things to all people instead
of being a fair-to-middling APM. Make it so I don't throw up in my mouth every
time I use the UI and then we can talk.

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smb06
Wouldn't it be nice to have the same level of visibility as AppDynamics
without worrying about agent compatibility?

Disclaimer: I work at a startup that is in the same space as AppDynamics

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eip
I worked for them when they first got funded. They were still working out of
their VC's office in San Mateo. I had a feeling I would regret not moving back
to the bay area when they asked me to.

Good on you Jyoti and Bhaskar.

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argonaut
AppDynamics looked like it was going to have a successful IPO, indicating a
welcome market for future enterprise tech IPOs. Interestingly, it's in Cisco's
best interest to have a cold IPO market.

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r00fus
It's questionable that any IPO this quarter would be hot. Lots of shadows and
cold wind about.

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JumpCrisscross
Does this bode well or badly for Snap and Spotify's IPOs?

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nemo44x
Doubt it matters since they are different segments. Snapchat and Spotify are
consumer technologies where as App Dynamics is a software and services
company.

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bedros
any advantage over open source apps like graphite

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albertwang
There's frequently a lot of confusion in the APM market -- As you might have
noticed, there's a lot of overlap in what both tools can do. Graphite is
primarily used for time-series metrics, whereas AppDynamics is a full-stack
APM vendor.

In other words, Graphite can be used to aggregate any metric you're interested
in (such as CPU usage), which you would then correlate with other relevant
metrics (such as number of web requests/second). If you're specifically
interested in tracking application-level performance (what is my website
throughput or where are my endpoint bottlenecks), you would need to find an
integration for your specific environment, or custom instrument your
application.

AppDynamics also has graphing features, but aims to bundle any other relevant
use cases an application developer or operations person might need. For
instance, it includes service topology maps (see which services are running on
your infrastructure, and are talking to which other machines) and application
logs (to parse unstructured text). They have also built many integrations (to
collect relevant metrics), usually for large enterprises.

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albertwang
To add -- a better comparison in the open-source world might be Zipkin or
Pinpoint, which aim to offer similar tracing capabilities with language
integrations.

