Cisco Splurges $USD28-Billion into SIEM Deal to Acquire Splunk.

A popular saying, advises that having money or a source of income is best preserved by either increasing investments or diversifying your portfolio. Cisco is putting that into action by investing $USD-28 billion, in a SIEM (Security Information and Event Management) deal, to acquire Splunk.

 

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The acquisition enables business organizations improve their security team’s ability to detect, respond, predict, and prevent threats. Image-source: Fixitgearware

 

Although the deal was first predicted in article written by CNN, sometime in 2022, sealing this acquisition certainly, would be cisco’s biggest acquisition so far. Last week, Cisco published on its official newsroom, about the intent of acquiring Splunk titled:

“Cisco to acquire Splunk, to help make organizations more secure and resilient in an AI-Powered World.”

The purpose of the acquisition is to assist business organizations and improve their security team’s ability to detect, respond, predict, and prevent threats. Cisco did not also leave the benefits they are set to achieve as well as a business. They emphasized that:

“Combined, Cisco and Splunk will become one of the world’s largest software companies and will accelerate Cisco’s business transformation to more recurring revenue. Expected to be cash flow positive and gross margin accretive in first fiscal year post close, and non-GAAP EPS accretive in year 2. Will accelerate revenue growth and gross margin expansion.”

It is no doubt that these two great business entities coming together for a common goal, certainly will provide a good environment workspace, with great values, strong cultures, and of course powerful team on board.  Cisco said:

“The combination of these two innovative leaders makes them well positioned to lead in security and observability in the Age of AI.”

It was officially disclosed on September 21st 2023 on NASDAQ, by the cybersecurity and observability leader that both companies (Cisco & Splunk) have come to a reaching agreement of the acquisition, with Cisco offering a buy offer at $USD157 per share in cash, amounting to a total sum of $USD28-billion in equity value.  This will certainly involve the merging organization’s CEO.  In an article insinuates:

“Upon close of the acquisition Splunk President and CEO Gary Steele will join Cisco’s Executive Leadership Team reporting to Chair and CEO Chuck Robbins.”

Certainly, these two power-house Splunk known for its heritage in assisting business enterprises in enhancing their digital security and pliability, and Cisco strategy in connecting everything; certainly, with the power of AI, would improve security and observability, enabling organizations to be more secure and pliable.

 The CEO and Chairperson of Cisco Chuck Robbins gave a positive affirmation in which he said:

“We’re excited to bring Cisco and Splunk together. Our combined capabilities will drive the next generation of AI-enabled security and observability, from threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”

With no doubt we are certain that both organizations are excited about the merge as President and CEO of Splunk Gary Steele gave his own correspondence saying:

“Uniting with Cisco represents the next phase of Splunk’s growth journey, accelerating our mission to help organizations worldwide become more resilient, while delivering immediate and compelling value to our shareholders.”

In addition, He said:

“Together, we will form a global security and observability leader that harnesses the power of data and AI to deliver excellent customer outcomes and transform the industry. We’re thrilled to join forces with a long-time and trusted partner that shares our passion for innovation and world-class customer experience, and we expect our community of Splunk employees will benefit from even greater opportunities as we bring together two respected and purpose-driven organizations.”

The advancement of technology in our world today, as resulted to a lot of data in motion, and these data are relied upon by organizations for business purposes or even critical decisions. It is no doubt that the use of AI to make things accelerated certainly expands attack surface and multiple cloud environment.

This level of advancement introduces a new modern issue, which is the level of complexity, that has never been experienced before.  Security concerns, and the need for organizations to adopt a better way of beefing their security, managing, protect, unlock data’s true value and stay digitally resilient is certainly on the rise.  With the use of AI, the unlocking of data true values, security and observability becomes a possibility for business enterprises, in turn promoting next generation SIEM tools.

Splunk offering security capabilities and Cisco’s existing portfolio, will yield a leading security analytics that covers both from endpoint devices to applications, and to clouds. Both companies will facilitate observability across hybrid and multi-cloud environments enabling the company’s customers to deliver seamless application experience that powers their digital business. 

 

A Deal Out of the Blue:

Rumors, had it that an ongoing deal was in the pipeline between cisco and Splunk. Which made an out of the blue entry for everyone in the industry. The managing principal analyst of omdia Eric Parizo, is of the opinion that the deal came as a surprise to everyone, with a seismic impact in the entire cybersecurity industry.

Parizo said:

“Splunk’s established position as a premium offering with the deep resources of Cisco’s global salesforce should present immediate upsell opportunities.”

A market prediction by omdia indicates that the SIEM technology with AI, will be yielding a total Global annual revenue of $USD 4-billion, by the year 2027 (4-years from now).

Allie Mellen an analyst from Forrester admits the deal certainly would be of significance in cisco effort in security, however the effect on security practitioners is unpredictable yet.

Mellen stated:

“To keep Splunk’s massive, loyal user base, Cisco needs to let Splunk deliver what Splunk does best: A flexible, powerful SIEM and observability offering.”

The demand for next generation SIEM by organizations running shifting their services to legacy platforms and those who support multicloud, cloud-native applications, and infrastructures is notable. Also comes the necessity of platform provides expanding their XDR capabilities as well.

This can be noted in the CrowdStrike FalCon 2023 conference which held in Las Vegas, sometime last week.  CrowdStrike released the “Raptor” version of its Falcon Platform, which is said to integrate a modified addition of LogScale, which the companies next generation of SIEM.

CEO of CrowdStrike George Kurtz in a media briefing last week, insinuates that asserted SIEM will be subsumed into XDR. He said:

“XDR, in my opinion, will replace SIEM; call it next-gen SIEM. Customers want the ability to ingest data at scale…to store that data, and they want the ability to search that data and query it, and they want the ability to take an action and if we put it all in one spot.”

CrowdStrike Analysts are also of the opinion that the organization’s goal is ambitious. Parizo is of the opinion which notes that:

“LogScale is a first step towards SIEM, but is essentially more of a proprietary log management system tailored for its own solutions. But if it has bandwidth and appetite to quickly catch up on SIEM, there are certainly viable acquisition targets out there.”

The move by XDR vendors have shifted to having a SIEM or SIEM alternative in their portfolio Mellen stated. She is of the opinion that:

“This is a massive shift in the market that gives CrowdStrike and other XDR vendors an opportunity to use to their advantage. The acquisition of Splunk by Cisco, would give Cisco both sides of the coin: XDR with Cisco XDR, and a SIEM with Splunk.”

 

 

 

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