Cisco's game-changing acquisition of Splunk

Cisco Systems is set to acquire cybersecurity firm Splunk in a monumental $28 billion deal. This move aims to bolster Cisco's software business and take advantage of the surging demand for artificial intelligence.

By joining forces with Splunk, Cisco hopes to decrease its reliance on its struggling networking equipment business. This sector has faced challenges due to supply chain issues and a slowdown in demand during the post-pandemic period.

Cisco CEO Chuck Robbins expressed confidence in the deal, highlighting the importance of security and observability to customers. These areas are essential for combating threats and are unlikely to see budget cuts.

Over the years, Cisco, under Robbins' leadership, has made efforts to shift away from hardware and focus on software and services through various acquisitions.

Splunk is renowned for its expertise in data observability, assisting companies in monitoring their systems for cybersecurity risks and other dangers. The company follows a subscription-based pricing model.

This acquisition is the largest in Cisco's nearly 40-year history, surpassing previous notable purchases such as NDS and AppDynamics Inc.

While some analysts raise concerns about potential antitrust scrutiny due to overlapping security businesses, Cisco remains unconcerned about significant regulatory obstacles.

- CyberBeat