Cisco's $28 billion acquisition of Splunk marks a significant development in the tech market landscape.
In 2020, Splunk was a dominant force in the security information and event management (SIEM) sector, with shares hitting an all-time high.
By 2022, Splunk faced challenges in transitioning to a cloud-based service, resulting in financial losses and a 50% drop in share price.
Talks of a Cisco-Splunk acquisition emerged in 2022 but were initially dismissed due to Splunk's high market capitalization.
Cisco's acquisition at $157 per share represents a 30% increase from Splunk's previous day's share price.
The acquisition provides Cisco with a significant boost, propelling its transition to annual recurring revenue (ARR) by nearly $4 billion.
However, integrating Splunk into Cisco's existing portfolio poses challenges, including concerns about additional licensing costs and product alignment.
The fate of Splunk's SIEM offering is a focal point of discussion, as the market evolves with the emergence of cloud-native solutions and open-source alternatives.
Splunk shareholders have welcomed the acquisition, leading to a surge in Splunk's stock value, reflecting confidence in the potential of the deal.