Splunk To Acquire Cloud App Monitoring Vendor SignalFx In $1 Billion Deal

The acquisition will expand Splunk’s real-time data monitoring capabilities for cloud IT operations and application performance management tasks.

Data capture and processing software vendor Splunk has struck a deal to acquire SignalFx, a developer of software used to monitor cloud infrastructure, applications and microservices, in a move that boosts Splunk’s IT operations management capabilities.

Splunk is paying approximately $1.05 billion to acquire San Mateo, Calif.-based SignalFx, about 60 percent in cash and 40 percent in Splunk stock. The companies expect to complete the acquisition by the end of Splunk’s fiscal 2020, which ends Jan. 31, 2020, subject to regulatory and other closing conditions.

About 40 percent of Splunk software implementations are for IT operations monitoring and management tasks. Another 40 percent of Splunk implementations are for security tasks, with the balance used for business analytics, the Internet of Things and other applications) The addition of SignalFx’s Software-as-a-Service real-time monitoring and metrics software are expected to further Spunk’s capabilities in the IT operations management and application performance management areas.

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“Data fuels the modern business, and the acquisition of SignalFx squarely puts Splunk in position as a leader in monitoring and observability at massive scale,” said Splunk President and CEO Doug Merritt (pictured) in a statement. “SignalFx will support our continued commitment to giving customers one platform that can monitor the entire enterprise application life cycle.

Merritt also said SignalFx’s management and employees are “a strong addition” to Splunk.

Last year Splunk bought VictorOps, a provider of DevOps incident management tools. Also in 2018 the company debuted Spunk Insights for Infrastructure, which uses metrics and log data to monitor complex IT infrastructure environments.

The addition of SignalFx to Splunk will create a data platform that IT management and developers can use to monitor and observe cloud-native infrastructure and applications, said Karthik Rau, SignalFx founder and CEO, in a statement. That includes data generated by cloud-native technologies such as SaaS applications, containers, microservices, serverless functions and orchestrated environments like Docker and Kubernetes.

Splunk disclosed the SignalFx acquisition deal just prior to the announcement of the financial results for its fiscal 2020 second quarter, ended July 31. Splunk reported that revenue in the quarter grew 33 percent year over year to $516.6 million from $388.3 million one year earlier. The company reported a loss of $100.9 million for the quarter compared with a $103.5 million loss one year before.