Cisco snaps up Splunk in $28bn application observability deal

Cisco has announced its intention to acquire IT firm Splunk for $28bn, in a deal the company hopes will bolster its security and application resilience portfolio.

Splunk offers cloud monitoring, observability and incident management among its product areas. For Cisco, these offer the potential to sit alongside its portfolio of AppDynamics tools, which it acquired in 2017.

Cisco and Splunk said the acquisition builds on Splunk’s heritage of helping organisations enhance their digital resilience, and will accelerate Cisco’s strategy to securely connect everything to make anything possible. They claimed Splunk’s security capabilities complement Cisco’s existing portfolio, and that together they will provide leading security analytics and coverage from devices to applications to clouds.

The acquisition is positioned to prepare IT departments for hyper-connected business, where every organisation relies on data to run their business and make mission-critical decisions every day. The challenges include tackling an expanded threat surface and supporting multiple cloud environments. Cisco and Splunk believe hyper-connectivity creates a level of complexity unlike anything organisations have faced. By joining forces, they hope to offer IT leaders a better way to manage, protect and unlock data’s true value and stay digitally resilient.

Splunk is positioned as a leader in Gartner’s latest Magic Quadrant report on application performance monitoring and observability, while Cisco is rated as a challenger.

Gartner defines the application performance monitoring (APM) and observability market as software that enables the observation and analysis of application health, performance and user experience. The targeted roles are IT operations, site reliability engineers, cloud and platform teams, application developers, and product owners.

Gartner said Splunk’s roadmap includes AI-directed end-to-end full-stack observability for hybrid environments, integration across observability and security, and visibility and control into metrics platform usage and costs. Cisco’s APM and observability roadmap is centred on its full-stack observability.

According to Cisco and Splunk, the two product families offer complementary capabilities that provide observability across hybrid and multi-cloud environments, enabling customers to deliver smooth application experiences that power their digital businesses.

“We’re excited to bring Cisco and Splunk together,” said Chuck Robbins, chair and CEO of Cisco. “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 organisations of all sizes more secure and resilient.”

Upon close of the acquisition, Splunk president and CEO Gary Steele will join Cisco’s executive leadership team reporting to Robbins.

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