Networking, cloud and cybersecurity company Cisco is purchasing software visibility firm Splunk for $28 billion, the companies announced Thursday.
The cash purchase will be for $157 per share, was unanimously approved by both Cisco and Splunk boards, and the move will see Splunk President and CEO Gary Steele join Cisco’s leadership team, according to a Cisco release.
The deal will add another prominent cybersecurity company to Cisco’s portfolio. In the past eight months alone, the company has acquired email and AI cybersecurity firm Armorblox, cloud security firm Lightspin and network security business Valtix.
“We’re excited to bring Cisco and Splunk together. Our combined capabilities will drive the next generation of AI-enabled security and observability,” Chuck Robbins, chair and CEO of Cisco, said in a statement. “From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”
Cisco characterized the acquisition as a marriage between two businesses with “complimentary capabilities in AI, security and observability” and one that could better leverage their combined data while allowing for new investments in software, innovation and scale.
Outside observers noted that while the move does make sense from a market perspective, Cisco has a spotty track record when it comes to smoothly integrating acquisitions in the security space.
Roger Thornton, a partner at Ballistic Ventures, a cybersecurity venture capital firm, said the move could help Cisco better compete with industry rivals like Palo Alto Networks, but also called the move surprising, noting that Splunk might be difficult for Cisco to “digest” compared to other acquisition targets.
“It will be great for Cisco if they can retain the team as it expands their capabilities and cements their transition from a hardware vendor to a software company,” Thornton said.
Allie Mellen, an analyst at tech market research firm Forrester, said the acquisition positions Cisco to offer both extended detection and response (XDR) as well as security information and event management (SIEM) products to the market. However, she also expressed concerns that Splunk may struggle to thrive under Cisco’s leadership.
“Cisco has long been a case study for acquisitions that don’t live up to their initial promise and suffer from underinvestment and a lack of focus,” Mellen said. “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.”
Cisco said it did not expect the acquisition to affect pre-existing stock buyback or dividend programs.
