# Cisco’s Splunk Grab Buys Them Enterprise Software Growing Room, But Does it Seal the Deal in AI-Enabled Cybersecurity?

By Francis Cianfrocca · Published 2023-10-04 · Updated 2026-03-12 · Engineering & Construction on MarketScale
Canonical: https://www.marketscale.com/industries/engineering-and-construction/ciscos-splunk-acquisition

> A $28 billion bet signals major portfolio ambitions, yet industry observers question whether the integration truly closes the gap in AI-driven threat detection

## Key points

- A $28 billion bet signals major portfolio ambitions, yet industry observers question whether the integration truly closes the gap in AI-driven threat detection

Block Field

[Cisco's](https://www.cisco.com/site/us/en/index.html) play for [Splunk](https://www.splunk.com/) is a step forward in the enterprise software space, but will this acquisition give them what they need in terms of advanced AI capabilities?

The network equipment giant **Cisco** will acquire enterprise software company **Splunk Inc.** for $28 billion, marking a significant stride in its cybersecurity endeavors and shifting from its core hardware focus. Touted by **Cisco** [CEO Chuck Robbins](https://blogs.cisco.com/news/cisco-and-splunk-driving-the-next-generation-of-ai-enabled-security-and-observability), this move aims to propel the company into the next era of AI-enabled security. The deal closed at [$157 per share](https://newsroom.cisco.com/c/r/newsroom/en/us/a/y2023/m09/cisco-to-acquire-splunk-to-help-make-organizations-more-secure-and-resilient-in-an-ai-powered-world.html), a 31% premium over Splunk's recent closing price. This acquisition symbolizes transitioning from threat detection to prediction, leveraging AI to bolster security infrastructures.

> This acquisition symbolizes transitioning from threat detection to prediction, leveraging AI to bolster security infrastructures.

In the wake of this enterprise software acquisition, a plethora of inquiries arose. How will **Cisco** integrate AI-enabled security technologies with its existing products and services? What are the unique [cybersecurity](https://marketscale.com/industries/business-services/gsx-2023-johnson-controls-cybersecurity-architecture/) risks in today’s networking and cloud solutions landscape? As **Cisco** endeavors to infuse AI-enabled solutions into its product suite, how might its cloud and networking ecosystem evolve to reap the benefits of AI support? These are pivotal considerations that will shape the trajectory of **Cisco**'s enterprise software venture into a new realm of AI-driven cybersecurity, and experts are poised to delve into the implications of these strategic moves.

[**Francis Cianfrocca**](https://www.linkedin.com/in/francis-cianfrocca-5a24b7/), CEO of [**InsightCyber Incorporated**](https://www.insightcyber.com/), an AI intelligence company, believes **Cisco**'s acquisition of **Splunk** is a move in the right direction. Still, Splunk's expensive storage costs may require additional considerations.

### Francis' Thoughts

“I was really impressed with the deal that **Chuck Robbins** pulled off, and it may not have been obvious to a lot of people for **Splunk** to link up with **Cisco**. It certainly, as you said, is very much the biggest deal they've ever done in financial terms. I remember **Webex** 10 or so years ago was $3 or $4 billion.

They've been buying, **Cisco** has been buying a lot of technology companies, much smaller deals, but this is the first one that is very large. It's very accretive, and the financial matching between the two companies is very close. Again, I don't think a lot of people anticipated it. Some were surprised, but when you look really closely at it, it's almost like **Cisco** couldn't have bought anyone else. They paid about 10% of market cap, $27, $28 billion, to acquire about 10% more top-line revenue, so that fits perfectly. They were really clever and executed well because there's no real overlap between **Cisco**'s existing businesses and **Splunk**, so they're not going to get antitrust problems. The deal's going to be easy to close. They did a lot of things right here, but again, it was a classic creative acquisition of a mature company by another mature company.

> There's no real overlap between Cisco's existing businesses and Splunk, so they're not going to get antitrust problems.
> *— Francis Cianfrocca, CEO at InsightCyber Incorporated*

The real objective for **Cisco** and the benefit to them is they get a big additional footprint in enterprise software, which is one of their core business focuses. The other main ones, of course, are networking equipment and compute hardware, so software is a big thing. As you said, they're trying to make it bigger because that's where they can get some growth. Now, I think a lot of people are going to ask, how are they going to integrate these technologies, and what does it mean to have AI being added to **Cisco**'s portfolio? I think that **Splunk** itself, all by itself, is a platform, very widely used one, but it doesn't have a whole lot of groundbreaking or advanced AI baked into the platform.

Rather, what you see is a lot of third parties, maybe 10,000 or more third parties, put their own analytics onto **Splunk** and make those available to **Splunk** customers. That's the smart thing for **Cisco** because they now have this added footprint where they can continue to entice third parties to add advanced capabilities, including really nice AI, into a platform that a lot of customers are already using. I don't think **Cisco** is going to make any substantial changes fundamentally to the technology platform.

They are going to integrate it with their sales model, and hats off to **Cisco**. I've always admired them for being unbelievably good at sales management and financial management. I don't put them at the top of the pile as a technology company, and a lot of people will disagree with me on that, but **Chuck Robbins** is a tremendously capable sales leader, and the way they manage finance, gross margins, unbelievably good, world-class, and so I think that that's going to create some friction for their users because buying from **Splunk** is different from buying from **Cisco**, will be in a year or two once they've got all the sales level integration done.

That's going to occasion some changes; some things are going to change in the world, possibly creating some opportunities for other vendors. Being someone who is in the cybersecurity business, and particularly with an AI focus, we look very closely at this deal, and I see it, again, great deal for **Cisco**, all right? They're very congruent with their business strategy, as I see it, right? I don't work for **Cisco**, but I think they're doing a great thing for themselves. Good deal. It does represent sort of a closure in the cybersecurity business where we're seeing a lot of traditional cybersecurity practice models coming to an end, and some new things are starting up. And let me explain specifically the problems that people have with **Splunk**.

It's a great company. Look what they've done. They just sold for $28 billion. You can't criticize that, okay? But from a technical point of view, the issues with that model are very, very expensive. It's basically a big data lake in the sky, and you throw all kinds of data from all of your systems and firewalls, et cetera, into **Splunk**, and what do you end up with? A lot of data. The problem is that they charge an exorbitant amount of money to store it, and they have some competitors. There's a genre, all right, a sub-segment of the market called Next Generation SIEM seeks to bend the cost curve. That's how they compete against **Splunk**, but the real problem is all of that data doesn't really tell you how to become more secure.

You spend a lot of money to license **Splunk**, but then you spend a lot of money on consultants and local management and experts to query the data, and I think that there is a new era coming with the SIEM category of products, **Splunk** being one, where artificial intelligence is going to be used in very different, novel ways to take all the data that **Splunk** aggregates and figure out how to ask the right questions so that users can become a whole lot more secure, get more insights that that are actionable of the form of, hey, you've got a major threat happening right here. It's ransomware. It's not going to hit you for three more months, but trust me; you want to look at these particular machines in this particular location and clean them out before you get in real trouble. That would be a whole new level of usefulness for the **Splunk** category of products. **Cisco** and **Splunk** they got a great thing going. I'm not sure they're the ones to innovate in that way. Other companies will probably do that, but that's the direction.”

Tags: AI-enabled cybersecurity, Cisco, cybersecurity, enterprise software, Francis Cianfrocca, InsightCyber Incorporated, Splunk, Splunk acquisition

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