Cisco will buy ThousandEyes, a network intelligence company. Neither will name the purchase price because ThousandEyes is privately held, but reports put the deal’s value at $1 billion.

The San Diego-based software vendor’s products visualize the user experience across networks and applications. Mohit Lad and Ricardo Oliveira founded ThousandEyes in 2010. Today, the company has 400 employees and close to 100 Fortune 500 customers.

“The ThousandEyes platform will be integrated across Cisco’s enterprise cloud and AppDynamics portfolio to provide real-time visibility across enterprise and cloud networks,” Derek Idemoto, senior vice president of Cisco corporate development and Cisco Investments, said in briefing.  “Acquisitions such as this one, and investments, are a consistent and core part of Cisco’s innovation strategy.”

The essence of the acquisition is this: The combination of Cisco’s expertise in network and application performance, andThousandEyes’ visibility into the internet will give customers an end-to-end view of digital application and service delivery. In addition, common tooling and sharing data sets for application and network health will help remove silos and give IT teams real-time visibility into application performance and degradation issues, the company said.

Unique Value Proposition

Cisco’s Todd Nightingale

“ThousandEyes’ network intelligence platform focuses on the user experience and network performance. The platform gathers data from various points throughout the public Internet – from within data centers, colocation centers, campuses, branches and on end-user devices – to identify dependencies that impact service delivery. This enables businesses to see, understand and improve all our users’ digital experiences,” Todd Nightingale, Cisco senior vice president and general manager, enterprise networking and cloud, wrote in a blog.

Nightingale talked about ThousandEyes’ unique value proposition. That is providing true internet intelligence and application experience intelligence.

“It gives both of these things in such an amazing package,” Nightingale said in a briefing. “And, it ties Cisco’s networking portfolio and our AppDynamics portfolio together. It will help drive network-as-a-service [services] from Cisco for years to come.”

The vision for ThousandEyes is based on the idea of the internet as the central nervous system for the user experience. Think of giving users a Google Maps view of the internet.

Channel Partners Cross Paths

The two vendors have crossed paths over the past couple of years and have even partnered, Nightingale said. Customers have asked ThousandEyes about collaboration with application performance monitoring vendors such as AppDynamics, Lad, ThousandEyes co-founder and CEO said. And, Cisco is a ThousandEyes customer.

“We meet in the channel all the time,” said Nightingale. “Our customers are also ThousandEyes customers.”

ThousandEyes’ Mohit Lad

Lad talks more about meeting in the channel.

“We meet in the channel quite a lot. We meet partners who are taking a bigger technology stack together. And, when they do that, they’re telling us the importance of doing more work with Cisco,” said Lad. “So, when a partner of yours [Cisco] and a partner of ours bring these two together for the customer, why not do it directly together as well?”

Kevin Rhone, practice director, channel acceleration at ESG notes that Cisco’s move is consistent with other moves as of late that focus on software and services that complement the vendor’s core networking/hardware business.

“ESG partner research in Q1 of this year has validated that Cisco’s partner base is continuing to transition well, adding more security products and managed security services to their portfolios,” he said. “So, the planned acquisition is positive in terms of maintaining the mindshare and wallet share of their partner base.”

Expect the acquisition to close by the end of October. ThousandEyes will join Cisco’s newly formed networking services business unit, which Nightingale runs. Lad will be general manager of ThousandEyes and Oliveira will be drive the company’s product vision and strategy.