Cisco announced a $28 billion, an all cash deal, to acquire Splunk, making it the largest acquisition to date for Cisco. Some recent and notable acquisitions include AppDynamics — a full-stack application performance management and IT operations analytics company that gave Cisco an enterprise tool for managing application performance and software, and ThousandEyes — a network intelligence company that gives visibility not just for the entire SD-WAN fabric but end-to-end, hop-by-hop visibility of the entire underlay.

In today’s hyper-connected world, where data is central and ever growing, organisations count on it to run their operations smoothly and make important decisions everyday. The challenges that businesses are thinking creatively about are adoption of GenAI, attack surface and the threat landscape, and multi cloud environment among others. These decisions are unlike any organisation has faced before. With this and several other acquisitions, Cisco plans to address these challenges and provide observability across hybrid and multi cloud environments enabling customers to power their digital businesses.

The risk of data breach and theft of PII is massive. Cybersecurity Ventures reported in 2023 that the total cost of cyber crimes is predicted to hit more than $10 trillion by 2025.

This is keeping CIOs and CISOs awake at night. Gartner’s survey indicates that InfoSec will attract most investments in the years ahead.

Source: Gartner CIO survey of top 2400 CIOs globally

So, why are Cisco and Splunk a strong strategic fit and compelling for customers and partners?

In terms of Security, Splunk’s security capabilities complement Cisco’s existing security portfolio. They will be able to help customers move from threat detection and response to threat prediction and prevention.

Next, Observability. Cisco’s complementary capabilities will offer observability for the full IT stack, from the application to the network across hybrid and multi cloud environments.

Lastly, AI. Cisco will use Splunk data to build security and observability-focused large language models (LLM) for generative AI use. They will take telemetry and enhance existing LLM that already contains tons of Cisco and Splunk content. By doing so, Cisco can create generative AI tools that can help customers use the vendor’s technologies to better manage, and secure a modern hybrid infrastructure. Together, they have taken orders worth $0.5 billion for building AI infrastructure.

With this acquisition, they have now become one of the largest software companies. Cisco and Splunk together deliver an end-to-end enterprise-grade full stack observability platform and deliver greater innovation across AI, security and observability.