The big news recently is that Cisco announced its intent to acquire Splunk.
My first impression is there are some great synergies among these two companies and their capabilities. In fact, my colleague Paul Nashawaty has been advocating for this move for some time now.
What makes the move so surprising is that Cisco had established a pattern of acquiring smaller companies, such as Accedian or SamKnows. But this $28 billion deal is much more than that.
For Splunk, the go-to-market benefits are huge. Two-thirds of its business is in North America, and only one-third is international, so being part of Cisco will open significant opportunities for growth in international markets. For Cisco, the move presents an opportunity to strengthen its full-stack observability, security and AI offerings.
While the two vendors have some overlap in capabilities, they should clear that up quickly; established Cisco products, such as AppDynamics, ThousandEyes and Security Cloud, should play significant roles in an integrated offering. Splunk's ability to ingest, correlate and provide actionable information -- using the Splunk AI engine -- will greatly improve with all the network, security and application data coming from Cisco offerings.
The deal is expected to close by the end of the third quarter of 2024, so there's plenty of time to speculate on what will happen post-acquisition.
Why the Cisco-Splunk acquisition matters
IT environments have become highly distributed, with applications in private data centers, multiple public clouds and edge locations. These environments, with larger attack surfaces, are at greater risk and they're increasingly complex and difficult to manage effectively. The amount of data from these disparate locations and different technologies is overwhelming, making it virtually impossible to manage manually. Operations teams need full-stack offerings that use AI and automation to drive operational efficiency, mitigate risk and ensure optimal performance or experiences.
Once fully integrated, the combination of Cisco and Splunk technologies will provide comprehensive end-to-end visibility across technology stacks and locations, including hybrid workers and service provider networks. The combination will also create an AI platform capable of ingesting all that disparate data to deliver actionable insights in real time. This will enable IT operations teams to move from being reactive to proactive for issues related to security, applications and networking.
Enterprise Strategy Group is a division of TechTarget. Its analysts have business relationships with technology vendors.