Cisco signaled it intends to reshape safe info and occasion administration (SIEM) by pulling the set off on a deal to accumulate Splunk for $28 billion. The all-cash settlement, announced immediately, requires Cisco to buy Splunk shares at $157 every, a 31% premium over the closing value of Splunk’s inventory on Wednesday.
The deal can be Cisco’s largest thus far. Whereas rumors surfaced in early 2022 that the 2 firms had 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 enhance Cisco’s already formidable cybersecurity safety portfolio. “Our mixed capabilities will create an end-to-end knowledge platform to reinforce 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 sometimes nixed many massive offers lately, Robbins is assured they may clear this deal. Emboldening his confidence is that the settlement does not need to 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 develop into tougher, Robbins argued that there is little overlap between the 2 firms’ choices.
“By means of the mixing of Cisco’s prolonged detection and response platform, our greatest safety insights, and Splunk safety info and occasion administration providing, we can assist our clients 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 take care of Splunk, which mande the announcement a shock to trade watchers. In a LinkedIn put up, Omdia managing principal analyst Eric Parizo referred to as the Cisco-Splunk deal “a real bombshell transfer that may have a seismic impression on the whole enterprise cybersecurity panorama,” including it could 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 rapid upsell alternatives,” he provides.
Forrester analyst Allie Mellen agrees the deal could possibly be a big 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 undergo from underinvestment and a scarcity of focus,” Mellen says. “To maintain Splunk’s huge, 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 people 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 supplies real-time occasion info natively in Falcon.
Over time, CrowdStrike CEO George Kurtz asserted SIEM shall be subsumed into XDR. “XDR, in my view, will substitute 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. “They usually need the flexibility to take an motion, and if we put it multi functional 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 rapidly make amends for SIEM, there are definitely 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 huge shift out there 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 “either side of the coin: XDR with Cisco XDR, and a SIEM with Splunk,” she provides.
Roger Thornton, basic associate at VC agency Ballistic Ventures, believes that within the brief time period, clients could develop into extra open to different SIEM choices. “Clients, significantly massive ones, do not prefer it when their favourite distributors get acquired,” Thornton says. “Integration at all times has an impression on help, account administration, and the senior sponsors. It’ll undoubtedly give Google Chronicle SIEM and Microsoft one thing to speak about with the Splunk put in base.”