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Cisco has announced the acquisition of Splunk for a staggering $28 billion. This move demonstrates how quickly technology markets can evolve and reshape company fortunes.
The acquisition of Splunk, a market leader in security information and event management (SIEM) in 2020, is significant due to its significant position. Splunk's stock surged due to increased cybersecurity investments post-COVID-19, while its share price fell significantly due to a challenging virtualized transition by 2022.
Splunk, a leading SIEM market player, experienced a surge in stock in 2020 due to increased cybersecurity investments, but faced challenges in the virtualized transition, causing a significant share price decline by 2022.
In 2022, Splunk restructured its management and appointed tech veteran Gary Steele to lead a successful turnaround, stabilizing the company and restoring its share price.
Due to Splunk's high market capitalization, Cisco's 2022 interest was initially stopped by CEO Chuck Robbins, but a decline in Splunk's value led to the current acquisition.
Cisco's deal with Splunk, despite being financially prudent, presents integration challenges due to Splunk's reputation for expensive SIEM solutions.
Cisco's acquisition of Splunk raises concerns about its fit into its existing data observability platforms, as the SIEM market evolves with cloud-native startups and automation demand.
Cisco's ARR surges to $30 million, but must address Splunk's cloud capabilities and SIEM positioning to compete with Datadog and other tech leaders.
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