IIT graduate Indian techie sells his startup to Cisco for Rs 25,000 croreIn a development that marks one of the biggest acquisitions for American Cisco Systems, Jyoti Bansal, an Indian techie has sold his startup to the multinational technology conglomerate for a whopping $3.7 billion (over Rs 25,000 crore).
In a development that marks one of the biggest acquisitions for American Cisco Systems, Jyoti Bansal, an Indian techie has sold his startup to the multinational technology conglomerate for a whopping $3.7 billion (over Rs 25,000 crore).
According to reports, AppDynamics, which has over 900 employees, develops software to help companies monitor their mobile apps and websites for bugs and fix them before customers drop off.
“Applications have become the lifeblood of a company’s success. The combination of Cisco and AppDynamics will allow us to provide end to end visibility and intelligence from the network through to the application,” Cisco internet of things and business group general manager Rowan Trollope said in a release.
The acquisition of AppDynamics came as the San Francisco-based startup was on the cusp of going public with an initial offering of stock.
Jyoti, an IIT Delhi graduate, had founded the company eight years ago in the US. He now owns 14 per cent of the company, after having diluted his stake to many venture funds over the years. As per the deal, he will get around USD 520million (approx Rs 3,400 crore).
After competing graduation in 1999, Bansal move to Cupertino on an H-1B visa to work for a startup. He had to wait for almost eight years before he got his green card. In 2005, Bansal joined Wily Technology as an architect. CA (Computer Associates) bought the company in 2006, and two years later, Bansal left CA to start AppDynamics.
"I waited seven years for my employment-based green card and I wanted to leave my job and start a new company but couldn't," he told Forbes in a 2016 interview.
Cisco corporate business development vice president Rob Salvagno said that the deal will help the company to generate more business in future.
“As companies across industries are expanding their digital infrastructure, IT departments are faced with vast amounts of complex, siloed data. AppDynamics helps many of the world’s largest enterprises translate this data into business insights,” Salvagno said in a blog post.
The deal was expected to close by the end of September, he informed.
Cisco had last year announced it was trimming its global workforce by seven percent as it shifts its focus from networking hardware to software and services.
The plan to eliminate 5,500 positions came as part of a corporate restructuring aimed at reducing expenses in ‘lower growth areas’ and investing in Cisco priorities such as security, cloud computing, data centers, and the internet of things, executives said at the time.
Faced with a slowdown in its traditional products such as routers for telecom networks, Cisco has been trying for several years to reorient to fast growing sectors. The company also seeks to increase revenue from ongoing subscriptions for services or software, as compared to sales of equipment.
Cisco built its fortune on hardware for private data centers, but businesses are increasingly turning to “super-clouds” such as Amazon Web Services and Microsoft Azure which rent processing muscle as needed.
Switches and routers remain a big chunk of Cisco’s business. Northern California-based Cisco has had waves of job cuts from 2011 through 2014, eliminating a total of more than 17,000 positions.