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Cisco to acquire Splunk for $29bn

In a deal that proves that Observability is now big business, Cisco are set to complete the acquisition of Splunk for $29bn - a figure which represents a 30% premium of the then price of Splunk shares. To industry insiders the deal was no surprise - Splunk have invested very heavily in moving to a cloud provisioning model. That took a serious hit on their bottom line. At the same time, Splunk's move to an Annual Recurring Revenue model made it an attractive propostion for Cisco - who are also keen to follow this model.

As the sector has grown we have seen a number of acquisitions in recent times. Grafana acquired Pyroscope and have now released their continuous profiling product as Grafana Pyroscope. Similarly, DataDog snapped up Timber Technologies for their Vector data pipeline technology.

Cisco and Splunk executives have heavily played up the strategic importance of Splunk's SIEM business as a driver for the deal. As corporates struggle to deal with data overload and an an ever-increasing aray of security threats, the bet is that Splunk's advanced analytics capabilities will represent a compelling value proposition.

There is no doubt that SIEM represents a major challenge to many businesses - both from a technological point of view as well as an economic one. As observability specialists know onl;y too well, ingestion and storage fees can be a significant hit on IT budgets. There is clearly an economic advantage in achieving convergence between SIEM and Observability workloads - however, from an organisational point of view these concerns tend to be organisationally silo-ed and therefore create cost duplications. It will be interesting to see how other big players in end-to-end observability respond to this development.

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