(MT Newswires) -- Cisco has just completed its acquisition of Splunk for $28 billion, marking the largest deal in its history. The two software giants are joining forces with the aim of strengthening and accelerating the adoption of artificial intelligence among their customers. Chuck Robbins, CEO of Cisco, and Gary Steele, ex-CEO of Splunk, pointed to the speed of regulatory approval for the merger, explained by the lack of overlap in their product offerings and the importance of cybersecurity to governments.
Gary Steele, appointed CEO of Splunk in 2022, initiated discussions with Robbins after their meeting in Davos. Negotiations were conducted prudently, with a focus on the interests of Splunk's shareholders. No other offer has been considered outside Cisco, according to Steele.
Splunk's integration with Cisco aims to strengthen the areas of observability and cybersecurity, using AI for real-time threat detection and response. The union is expected to improve customers' ability to manage complex technology infrastructures and counter increasingly sophisticated malicious actors.
Cisco, which is transforming its business model to focus on recurring revenues, sees Splunk as an asset in achieving this objective. The merger has enabled Cisco to achieve 50% recurring revenue, add $4.2 billion in ARR (annual recurring revenue) and surpass $20 billion in software sales.
Management assures that the integration of Splunk will not result in additional staff reductions, as the deal is based on revenue synergies rather than cost savings. Product innovations resulting from the integration are expected in the coming months, although details have yet to be announced.
Despite the large size of the acquisition and the generally unfavourable statistics on the success of major mergers, management is optimistic. Their confidence is based on detailed planning, strong involvement of the engineering teams, and the cultural and strategic fit between the two companies as they seek to create significant value for customers and maintain positive momentum.
