Cisco was once something of a synonym for network technology. The US company, once the most valuable in the world, laid the technical foundations with network devices and software on which companies like Google and Facebook could build. Those glory days may be over, but Cisco is still a large company with 80,000 employees – looking to expand its network technology business. Cisco strategy chief Liz Centoni said this to the SZ in the spring.
Now they have obviously found a suitable partner. Splunk, founded in 2003 and with around 8,000 employees, has developed a kind of universal data hog. The system can gain insights from unstructured data. It is used, for example, to detect anomalies in the operation of machines. The construction machinery manufacturer Caterpillar is one of the customers. The San Francisco company’s software can also be used to monitor data centers.
Cisco has offered to pay $157 per share, which would result in a valuation of $28 billion. The boards of both companies welcomed the deal. Cisco expects this to accelerate the company’s transformation towards recurring revenue. Cisco is following the trend of offering services more and more as subscriptions, instead of selling network devices as before and then only making money through service contracts.
The combined forces of the two companies will drive the next generation of AI-powered security, says Cisco CEO Chuck Robbins. The previous Splunk boss Gary Steele was also impressed by the deal in a statement. He is expected to join Cisco’s board of directors after the deal is completed.