Cisco to buy Israel's Epsagon for $500 million as it pushes for improved full-stack visibility
Three years from starting out, to a Cisco buyout...
Cisco continues to gobble up network infrastructure and application visibility and monitoring companies, agreeing to buy Israeli startup Epsagon for $500 million to add to acquisitions AppDynamics (2017), ThousandEyes (2020), with the aim of adding Epsagon's capabilities to Cisco's existing Intersight SaaS offering.
(Cisco did not disclose deal terms, multiple sources put the figure at $500 million to Israel's Globes newspaper.)
Epsagon, founded in late 2017 by Nitzan Shapira and Ran Ribenzaft -- both Israeli military intelligence veterans -- provides expertise and software for tracing solutions across modern container-based applications and serverless environments. It employs 60 people, with clients including Deloitte and Toyota.
Epsagon's rapid acquisition comes as traditional CPU and network metrics fail to give DevOps teams the insight needed into application performance. With heavy reliance on managed services, microservice hosts are also often not accessible for deploying an automated monitoring agent, as Epsagon notes, and numerous companies have emerged to help organisations tracing high volumes of asynchronous requests across many distributed components of modern apps.
Cisco's Liz Centoni said: "Applications have become part of our everyday life and are the primary way we interact with products and services today. Increasing consumer demand for a seamless digital experience with each application interaction... means businesses must ensure that every component of their application – third-party or otherwise – runs smoothly."
She added: "To accelerate application development lifecycles, businesses are adopting cloud-native technologies, microservices and containerized components on a large scale while leveraging an extensive web of traditional components, third-party services and application programming interfaces. This has led to a significant increase in complexity in IT environments. Multiple teams are involved in figuring out how to monitor the performance, optimization and security of every digital experience, by examining each component, such as application services, networks, infrastructure, cloud and databases, and understanding the insights gathered and their impact to customers’ digital experiences. Traditional domain-centric monitoring tools address only some of these needs..."
See also: DataStax's team on rethinking their data stack strategy
The acquisition comes as Cisco continues to buy its way into tools that can support clients as they shift to microservices architectures and other modern application architectures. (Epsagon was built with the aim of offering payload visibility, and end-to-end observability within microservice environments via an agentless and largely automated SaaS offering that gives visibility across containers, VMs, serverless, FaaS.)
Analysts have speculated that Cisco could next move to CI/CD acquisitions and "potentially other IT ops tools like Splunk and Sumo Logic."
Cisco CEO Chuck Robbins admitted in the company's most recent earnings call that moving to support "next-generation infrastructure solutions, as well as cloud-enabled delivery models and innovation... will require a significant investment cycle".
The company has moved aggressively towards recurring SaaS revenue over its traditional hardware solutions in recent years, with the result that it now has what Robbins described as "one of the largest software businesses in the industry with an annual run rate well over $14 billion."
