Cisco announced Thursday afternoon that it was buying network-monitoring company ThousandEyes. Earlier on Thursday, Bloomberg reported that Cisco would pay close to $1 billion to buy ThousandEyes, but Cisco didn't disclose the financial terms.
With ThousandEyes, Cisco will add more reoccurring software and service revenues to its bottom line as it transitions away from relying on just the sale of hardware.
The deal will also increase Cisco's relationships with cloud providers such as Amazon Web Services (AWS), Microsoft Azure and Google Cloud. San Francisco-based ThousandEyes' network intelligence infrastructure-as-a-service agents work across the regions that AWS, Microsoft Azure and Google Cloud serve. ThousandEyes monitors vantage points across the cloud providers' regions in order to help them make better data driven decisions.
ThousandEyes' cloud agents are external vantage points that are distributed globally across its points of presence, while its enterprise agents are software-based and can be installed on networks, data centers and branch offices.
Increased network visibility is especially important as customers migrate toward multi-cloud environments. Multi-cloud usage is being driven by infrastructure-as-a-service, software-as-a-service and platform-as-a-service use cases. In addition, the dynamic nature of the cloud makes it even harder to proactively monitor networks.
ThousandEyes' enterprise agents can also be deployed on Cisco ISR and ASR Routers in order to optimize WAN from a single vantage point. Cisco has been a customer of ThousandEyes since 2013.
ThousandEyes' endpoint agents are browser-based plug-ins that can installed on end users' laptops and desktops. By running tests through the cloud between cloud agents and enterprise agents, IT teams can use endpoint agents to monitor and measure performance between the cloud regions as well as inter-cloud performance.
Traditional monitoring vendors monitored internal networks, were point-to-point, or worked primarily with Cisco gear.
Having more insight into enterprise and cloud providers' architectures has taken on added importance over the past several months during the COVID-19 pandemic, which has reduced the ability for enterprise IT teams to predict, visualize and control operational behavior.
ThousandEyes was founded by CEO Mohit Lad and CTO Ricardo Oliveira in 2010 and launched three years later. Its investors include Salesforce Ventures and Sequoia Capital, while Comcast, GitHub and Lyft are among its customers. ThousandEyes, which Crunchbase characterized as an "emerging unicorn," has raised $110 million in financing to date.
Cisco will add ThousandEyes’ capabilities across its core enterprise networking and cloud sectors, and AppDynamics portfolios to provide improved visibility across the enterprise, internet and the cloud networks. Once it passes customary closing conditions, the acquisition is expected to close before the end of Cisco’s fiscal first quarter in 2021. ThousandEyes will join Cisco's newly-formed networking services business unit, reporting to Todd Nightingale.
“I’m excited to welcome the ThousandEyes team to Cisco,” said Nightingale, SVP and general manager, Cisco enterprise networking and cloud. “The combination of Cisco and ThousandEyes will enable deeper and broader visibility to pin-point 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.”
As part of the Networking Services business unit, ThousandEyes's Lad will take on the role of general manager of ThousandEyes while Oliveira will "continue to drive ThousandEyes product vision and innovation strategy," according to Cisco.