Cisco Systems Inc Announces Intent to Acquire AppDynamics Inc Conference Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Jim Suva - Citigroup - Analyst : The teaching and overview this highly appreciated, thanks so much. I have one question. A lot of what you talked about was the customers are asking for visibility into the apps, and what is going on. It seems like also, and correct me if I'm wrong, isn't the load balancer part of the gateway to the bridge going into that? If so, can you address the products or concerns, or why wouldn't Cisco also go into this area? Or maybe you are in it, and we are just not that aware of it. But the load-balancing seems like a bit of the gateway into the visibility, into the apps along with this, or correct me, if technology has changed.

Question: Jim Suva - Citigroup - Analyst : Thank you so much.

Question: Ashwin Kesireddy - JPMorgan - Analyst : Thanks you for taking my question. This is Ashwin on behalf of Rod. David, can you tell us if most of the business you are seeing today is being driven by companies or enterprises that are planning to migrate to public cloud? And would love to get your view on the growth of your business, and traditional data center environments. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 25, 2017 / 6:00PM, CSCO.OQ - Cisco Systems Inc Announces Intent to Acquire AppDynamics Inc

Question: Simona Jankowski - Goldman Sachs - Analyst : I heard your comments about how being a part of Cisco can help accelerate AppDynamics' trajectory, but looking at it from the other perspective, how does having AppDynamics in house help Cisco sell more of its own product?

Question: Simona Jankowski - Goldman Sachs - Analyst : Thank you. And AppDynamics uses direct sales. To what extent do you anticipate being able to leverage your channel, given that it's got a bit of a different focus?

Question: Ari Levy - Lakeview Investment Group - Analyst : David, curious, I think that many from the tech recording perspective are interested in the IPO for many reasons. The first tech IPO of the year, first in several months. And interested in seeing how the street, how investors would respond to the high cash burn, but high growth model that Silicon Valley has largely been moving away from in favor of cash flow production and profits. So I would be interested in hearing what kind of feedback you were getting along the road show, and what was most illustrative. And also, if you could talk a little bit about how the deal come about. That would be really interesting.

Question: Vijay Bhagavath - Deutsche Bank - Analyst : I think the deal is clearly a positive for Cisco and also for AppDynamics. My question is how would Cisco monetize AppDynamics? And also think about the delivery and distribution model. If you assume to be true that Cisco would primarily monetize AppDynamics through the recurring revenue model. Any thoughts on transitioning the software portfolio itself into a native cloud SaaS software delivery distribution model, versus, if this is correct, it's more of a hybrid on-premise SaaS model?

Question: Dennis Drogseth - Enterprise Management - Analyst : This is quite an exciting story. We are following it eagerly here at Enterprise Management. One thing I've seen a long history of, including in the past times with Cisco, over 10 years ago, and certainly some of my own history. I worked at Cabletron and watched Spectrum move forward in that environment. There is a dichotomy, even with cloud, between software sales and infrastructure sales. And I guess the core question here is to what degree is Cisco committed to developing a software business that is independent of its hardware business, which is, I believe, also essential for these opportunities to flourish?

Question: Dennis Drogseth - Enterprise Management - Analyst : I will underscore that the dynamics and the sales process, especially for this type of software is radically different. I think that a great complement for Tetration, by the way. I am cheering you on, but it is a qualitatively big step, I think, still, even given your history.

Question: James Faucette - Morgan Stanley - Analyst : I just wanted to ask a follow-up question to perhaps even the comment that was just made. Can you expand a little bit about how you see AppDynamics fitting into Cisco's new Tetration offering, and you talked about from a monitoring standpoint, how AppDynamics can help complement what Cisco now has on offer? What about similarly, from a security perspective? Thank you very much.

Question: Mark Moskowitz - Barclays Capital - Analyst : I want to get a sense here in terms of, as we get appreciation for purchase price, how you catalog this Company? Is it more of a big data analytics company evolving into SaaS, or has it already arrived at being a SaaS model, because we're confused there. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 25, 2017 / 6:00PM, CSCO.OQ - Cisco Systems Inc Announces Intent to Acquire AppDynamics Inc As far as revenue augmentation, how long should we think about this in terms of it really being a beneficiary of the Cisco platform? In terms of, when can you get a 4 or 5 or 10-bagger in terms of revenue augmentation? Thank you.

Question: Mitch Pleats - - Analyst : I have one, circling back on value proposition both from a cost perspective and a revenue perspective. I understand that applications will essentially drive the upside for a lot of these companies. But what is the one minor that you use to sell the product to a buyer, either for cost savings opportunity or for revenue upside, when you use the AppDynamics solution?

Question: Jonathan Tertis - - Analyst : Three questions. My sense was that AppDynamics was really great for applications that I control as the enterprise. What do I use for monitoring of third-party applications? Is question number one. To David, to what extent were you complementing and/or competing with Splunk? I see on Cisco's website they have got Google, 3,000-plus references to Splunk on Cisco's website, but about 30 references to AppDynamics. So clearly Splunk is an important partner for Cisco. Third, to what extent do you expect to get most of the revenue synergies through direct sales of AppDynamics, versus combining AppDynamics with the sale of data center infrastructure, security infrastructure, or campus infrastructure?

Question: Jonathan Tertis - - Analyst : We own the stock so we get more.

Question: Jonathan Tertis - - Analyst : Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 25, 2017 / 6:00PM, CSCO.OQ - Cisco Systems Inc Announces Intent to Acquire AppDynamics Inc

Question: Dan Shey - ABI Research - Analyst : What I'm really curious about, and this has mentioned a few times is the relationship, or I should say the value of AppDynamics to a growing focus in this new technology area called Internet of Things, IoT. Like it has mentioned a few times. I was wondering if you can maybe provide a more concrete example of how AppDynamics will help you in the IoT business? Is it just the data center? Or will it also be closer to the edge, maybe putting AppDynamics on the gateway or something like that? If you could provide some concrete example, even more of a smart factory or whatever use case it might be, that might helpful if we understand that relationship and what the opportunity is for the combination of your two companies. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 25, 2017 / 6:00PM, CSCO.OQ - Cisco Systems Inc Announces Intent to Acquire AppDynamics Inc

Question: Simon Leopold - Raymond James & Associates, Inc. - Analyst : I wanted to go back to the topic of the sales synergies, but see if you could answer it from the perspective of the customers. One of the things that I suspect is that AppDynamics contacts or point of contact at the enterprise buying software might be a different individual and decision-maker than Cisco usually is selling to. While Cisco likely has the enterprise relationship, maybe not at the individual level. Can you elaborate on this aspect?