Cisco signaled it intends to reshape safe data and occasion administration (SIEM) by pulling the set off on a deal to amass Splunk for $28 billion. The all-cash settlement, introduced as we speak, requires Cisco to buy Splunk shares at $157 every, a 31% premium over the closing worth of Splunk’s inventory on Wednesday.
The deal can be Cisco’s largest up to now. Whereas rumors surfaced in early 2022 that the 2 corporations have been in acquisition talks, no deal materialized. Shortly after, Splunk tapped longtime Proofpoint CEO Gary Steele as its CEO. Steele stated he’ll be a part of Cisco after the transaction closes.
Including Splunk might considerably increase Cisco’s already formidable cybersecurity safety portfolio. “Our mixed capabilities will create an end-to-end knowledge platform to boost digital resiliency,” stated Cisco chairman and CEO Chuck Robbins throughout an investor name to announce the deal. Robbins anticipates the deal will shut within the third quarter of 2024, pending shareholder and regulatory approvals.
Though regulators worldwide have extra intensely scrutinized and infrequently nixed many massive offers not too long ago, Robbins is assured they may clear this deal. Emboldening his confidence is that the settlement does not must be accredited in China as a result of Splunk has a minimal presence there.
Whereas getting massive offers accredited by regulators within the US and Europe has additionally grow to be harder, Robbins argued that there is little overlap between the 2 corporations’ choices.
“By means of the combination of Cisco’s prolonged detection and response platform, our greatest safety insights, and Splunk safety data and occasion administration providing, we will assist our prospects transfer from menace detection and response to menace prediction and prevention,” Robbins stated.
Deal Comes as a Shock
There was little latest indication that Cisco was considering a cope with Splunk, which mande the announcement a shock to business watchers. In a LinkedIn submit, Omdia managing principal analyst Eric Parizo known as the Cisco-Splunk deal “a real bombshell transfer that may have a seismic affect on the whole enterprise cybersecurity panorama,” including it might foreshadow extra consolidation.
Parizo believes the deal will place Cisco as one of many dominant gamers in next-generation SIEM (NG-SIEM), a market that Omdia forecasts will develop to just about $4 billion in world annual income by 2027. “Splunk’s established place as a premium providing with the deep assets of Cisco’s world salesforce ought to current quick upsell alternatives,” he provides.
Forrester analyst Allie Mellen agrees the deal may very well be a major boon for Cisco’s safety efforts, however the impact on safety practitioners stays to be seen. Mellen warns that Cisco has a checkered previous with a few of its largest acquisitions.
“Cisco has lengthy been a case examine for acquisitions that do not dwell as much as their preliminary promise and endure from underinvestment and a scarcity of focus,” Mellen says. “To maintain Splunk’s large, loyal consumer base, Cisco must let Splunk ship what Splunk does finest: a versatile, highly effective SIEM and observability providing.”
Fueling Subsequent-Era SIEM
The deal comes amid a rising highlight on next-generation SIEM and organizations needing to maneuver from legacy platforms to those who help multicloud and cloud-native functions and infrastructure. It additionally comes as platform suppliers are increasing their XDR capabilities.
For instance, at this week’s CrowdStrike Fal.Con 2023 convention in Las Vegas, CrowdStrike launched the “Raptor” model of its Falcon platform, which integrates an enhanced iteration of LogScale, the corporate’s NG-SIEM providing. LogScale is the outgrowth of CrowdStrike’s $400 million acquisition of logging and occasion administration supplier Humio. Designed to ingest petabytes of third-party knowledge, CrowdStrike’s Raptor launch gives real-time occasion data natively in Falcon.
Over time, CrowdStrike CEO George Kurtz asserted SIEM will probably be subsumed into XDR. “XDR, in my view, will exchange SIEM; name it next-gen SIEM,” Kurtz stated throughout a media briefing this week. “[Customers] need the flexibility to ingest knowledge at scale … to retailer that knowledge, [and] they need the flexibility to look that knowledge and question it,” he stated. “And so they need the flexibility to take an motion, and if we put it multi function spot.”
Analysts say CrowdStrike’s targets are bold. “LogScale is a primary step towards SIEM, however is basically extra of a proprietary log administration system tailor-made for its personal options,” Parizo notes. “But when it has the bandwidth and urge for food to shortly compensate for SIEM, there are actually viable acquisition targets on the market.”
Mellen notes that almost all XDR distributors have shifted to having a SIEM or a SIEM-alternative of their portfolio. “This can be a large shift available in the market that provides CrowdStrike and different XDR distributors a possibility to make use of to their benefit,” she says.
Cisco’s acquisition of Splunk would give Cisco “each side of the coin: XDR with Cisco XDR, and a SIEM with Splunk,” she provides.
Roger Thornton, normal associate at VC agency Ballistic Ventures, believes that within the brief time period, prospects could grow to be extra open to various SIEM choices. “Prospects, notably large ones, do not prefer it when their favourite distributors get acquired,” Thornton says. “Integration all the time has an affect on help, account administration, and the senior sponsors. It’ll positively give Google Chronicle SIEM and Microsoft one thing to speak about with the Splunk put in base.”
