Potential Cisco-Splunk Deal ‘Massive’ for Software, Security Focus: Partners

‘That Cisco could be making the move for one of the most reputable names in the SIEM space could take them to another level,’ one Cisco and Splunk partner tells CRN.

A Cisco-Splunk tie-up would close gaps in Cisco’s security portfolio and complement its growing observability business, according to solution providers.

The two companies made news on Friday when a report surfaced that alleged Cisco had made an offer for Splunk worth more than $20 billion. The deal would be Cisco’s largest price tag to date for any technology acquisition.

“It actually got me excited,” said Kent MacDonald, senior vice president of strategic alliances at solution provider Long View Systems, a longtime Cisco partner. “I think as Cisco makes software more significant, it’s a great addition to that journey. It would take a known brand in the security and data management and really accelerate the path Cisco is on.”

Cisco needs to do something “dramatic’ on its software journey, MacDonald said. “An acquisition like Splunk would give Cisco a very different profile than where they have traditionally been.”

Splunk, like Cisco, has been shifting its business from selling on-premises software with traditional license pricing to cloud-based software sold on a subscription basis.

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Faisal Bhutto, president of cloud and cybersecurity for Cisco and Splunk partner Computex Technology Solutions, called Cisco’s potential purchase of Splunk “massive news.”

Security infrastructures have become increasingly complex, and partners and IT teams are having to stitch together best of breed solutions that all require custom integrations, Bhutto said. “This really could fill in the bigger gaps Cisco has around creating a complete portfolio of security services,” he said.

Cisco’s fellow tech giants are making moves in the security and automation space, and they aren’t leaving any gaps open, Bhutto said. Google in January announced it acquired security orchestration, automation, and response (SOAR) vendor Siemplify. Microsoft has become a more formidable security player with Sentinel, it’s cloud-native security information and event manager (SIEM) offering.

“That Cisco could be making the move for one of the most reputable names in the SIEM space could take them to another level,” he added.

One security-focused solution provider that spoke to CRN under the condition of anonymity said that Cisco’s security portfolio lacks security information and event manager (SIEM) technology and Splunk is a leader in this market. “This is something they should be doing. Splunk would make their story really compelling,” the partner said.

Cisco has positioned itself as a company with the strongest overall portfolio, rather than carving itself out as a leader in a specific security technology, the partner said. “This would clearly be a portfolio move for them,” the partner said of the reported Splunk acquisition. “Cisco has struggled with market perception where they’re still viewed as an infrastructure company that has security, not a security company that also has infrastructure.”

In addition to security, Splunk also has a large IT management software and data analytics business and an observability suite of software that puts it in the same market as Cisco’s AppDynamics and ThousandEyes businesses. Splunk’s technology could complement Cisco’s observability business, the partner said.

Long View Systems is a Cisco Gold partner that sees Splunk in many of its customer accounts because of its market dominance.

“I really see the value in connecting the individual technologies,” MacDonald said. “One of the big upsides to what the Splunk acquisition would bring is the ability to bring those multiple technologies together from a customer experience.”

Cisco is slated to announce its Q2 2022 earnings on Wednesday.

Reports of the potential Cisco-Splunk deal sent Splunk’s stock soaring in after-hours trading on Friday evening. The stock was up 9.13 percent at the close of the market on Monday.