Cisco's bought a machine learning startup to bolster AppDynamics, the company it bought for $3.7 billion on the eve of its IPO (CSCO)

Cisco CEO Chuck Robbins

Cisco is acquiring machine learning startup Perspica.
Perspica will be combined with AppDynamics, an application performance monitoring company that Cisco acquired in January for $3.7 billion.
The hope is that Perspica's AI will help AppDynamics work faster and better across the complex IT setups that are common at most companies today.

Cisco on Thursday announced its intent to acquire a machine learning and data startup called Perspica. The San Jose-based Perspica team will join the existing crew at AppDynamics and the products will ultimately be merged into one.

Cisco didn't say how much it paid for Perspica but the startup had raised $8.5 million, according to Crunchbase.

Cisco sent ripples through the enterprise market in January when it acquired AppDynamics in January at the premium price of $3.7 billion — the night before the startup was set to hold its initial public offering (IPO).

AppDynamics does application performance monitoring — Silicon Valley speak for a program that makes sure a website or cloud software is running well for customers.

Perspica's specialty is machine learning and data science, which Cisco plans to use to make AppDynamic's existing monitoring system better and faster. The goal is to use artificial intelligence to catch problems quicker.

"Ultimately, it will enable us to deliver our vision for the future of performance that is infinitely scalable and ridiculously fast to keep pace with developments in the enterprise," wrote Bhaskar Sunkara, chief technology officer and senior vice president of product management at AppDynamics.

Both acquisitions are part of an overall strategic shift at Cisco, led by CEO Chuck Robbins, to move the company away from dependence on its hardware business, and into the software space.

"There's been a lot of opinion out in the world that infrastructure companies like Cisco have to move away from hardware, and they're embracing that strategy," said Greg Young, a research vice president at Gartner. "For large established companies like Cisco, we see them having trouble being agile. So bringing in startups around hot areas like AI is a good sign."

Perspica, incidentally, is Cisco's 200th acquisition ever, and its seventh in 2017. (It's very first acquisition was of the switching company Crescendo Communications in 1993.)

This is also not Cisco's first foray into artificial intelligence.

In May, Cisco acquired MindMeld, a platform for developing human-like conversational interfaces across applications. The company also announced a new set of switches and software in June which it claims can detect malware in encrypted files — a problem previously thought to be unsolvable. The switches and software use machine learning to search through data for telltale signs of malicious software.

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