Cisco closes $28B acquisition of Splunk

In today's rapidly evolving digital landscape, it's imperative for organisations to both connect and safeguard every facet of their operations. This encompasses linking their people, places, applications, data, and devices, all the while shielding their digital footprint against cybersecurity threats, downtime, and other pivotal business risks.

By integrating the full potential of the network with leading security and observability solutions, Cisco aims to provide a comprehensive, real-time overview of the digital landscape. This initiative is geared towards enabling teams to proactively secure critical infrastructure, avert outages, and enhance network experiences.

Chuck Robbins, Chair and CEO of Cisco, expressed his enthusiasm about the acquisition: “We are thrilled to officially welcome Splunk to Cisco. As one of the world’s largest software companies, we will revolutionise the way our customers leverage data to connect and protect every aspect of their organisation as we help power and protect the AI revolution.”

Echoing this sentiment, Gary Steele, Executive Vice President, General Manager, Splunk, remarked: “Uniting Splunk and Cisco will bring tremendous value to our joint customers worldwide. The combination of Cisco and Splunk will provide truly comprehensive visibility and insights across an organisation’s entire digital footprint, delivering an unprecedented level of resilience through the most extensive and powerful security and observability product portfolio on the market.”

Powering and protecting the AI revolution with Cisco

The advent of AI is transforming technology adoption at an unparalleled rate. Harnessing the right data at a vast scale is crucial for unlocking AI's potential benefits, pushing organisations towards achieving outcomes previously deemed unattainable. Cisco's acquisition of Splunk empowers it to offer the necessary infrastructure, data, security, and observability platforms required to efficiently manage and monitor AI applications in real-time.

Stephen Elliot, Group Vice President, I&O, Cloud Operations, and DevOps at IDC, highlighted the transformative nature of this acquisition: “Cisco and Splunk is a transformative combination that will allow customers to do things that weren’t possible before. With the close, Cisco has created a unique set of solutions for networking, security, and operations executives in the market. When you add that to their channel and AI investments, customers should be considering the higher levels of business value that can now be unlocked.”

Julie Sweet, Chair and CEO of Accenture, also shared her congratulations, underscoring the promising opportunities this merger brings: “Accenture congratulates Cisco on the acquisition of Splunk. We have enjoyed long-term partnerships with both companies and look forward to the opportunities this collaboration presents to our clients in the future."

The synergistic benefits for customers, partners, and developers

The amalgamation of Cisco and Splunk promises to deliver:

Enhanced security through a comprehensive solution that spans threat prevention, detection, investigation, and response across any organisation size, leveraging insights from Cloud, network, and endpoint traffic.

Superior observability with a full-stack solution that ensures exceptional digital experiences across multi-Cloud hybrid environments.

Advanced networking through secure, resilient, and optimally tuned network infrastructure.

Empowered AI capabilities, thanks to Cisco’s networking suite combined with superior security, full-stack observability, and an extensive data platform, enabling customers to fully leverage AI.

Improved economics, as Cisco and Splunk's unified platform approach allows customers to streamline their solutions, improving outcomes while reducing costs.

Furthermore, Cisco and Splunk’s merger brings together vast global communities of developers and partners with deep experience in extending security, observability, and data platform capabilities. This collaboration paves the way for creating new revenue opportunities through high-value services and the deployment of innovative applications and AI-driven solutions.

In the coming months, Cisco will unveil new product innovations following Splunk’s integration. These advancements will be featured at Cisco Live from 2nd to 4th June 2024 and at .conf24 from 11th to 14th June 2024.

Transaction overview

Under the agreement terms, Cisco acquired Splunk at $157 per share in cash, totalling an equity value of approximately $28 billion. The acquisition is expected to positively impact Cisco's cash flow (excluding certain acquisition-related items) and contribute to non-GAAP gross margin in fiscal year 2025 and non-GAAP EPS in fiscal year 2026, propelling Cisco towards accelerated revenue growth and non-GAAP gross margin expansion.