#121 Cisco’s $28 Billion Splunk Acquisition: A Game-Changer in the AI Era
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AI BYTE # 📢: Cisco’s $28 Billion Splunk Acquisition: A Game-Changer in the AI Era
Cisco Systems, a name synonymous with networking equipment, has closed its largest acquisition ever, a whopping $28 billion all-cash deal for cybersecurity and analytics company, Splunk.
A Strategic Move in the AI Landscape
This acquisition, completed months ahead of schedule, is a testament to the extraordinary lengths companies are going to as they reshape their businesses around data and AI.
The integration of AI into the fabric of these combined entities is a clear indication that the current wave of business AI adoption shows no signs of slowing down.
Harnessing AI for Cybersecurity
The amalgamated entity plans to leverage AI to help customers correlate intelligence from different vendor platforms, enabling a more predictive approach to cybersecurity.
While this predictive capability has been in development for some time, the company also intends to launch additional features that utilize Generative AI. This will simplify their software and make it more accessible to individuals without technical training.
Splunk’s Role in the AI Revolution
Splunk, established in 2003, created a dashboard that allows users to search, monitor, and analyze machine-generated data. Despite requiring some technical know-how to operate, the introduction of Generative AI has significantly reduced the learning curve.
Splunk’s proprietary language, used to issue commands, can now be automatically generated using plain English, thanks to AI assistance. This means users can achieve outcomes without needing advanced knowledge.
The Power of Generative AI
Splunk’s AI stands to benefit immensely from Cisco’s vast data resources, global presence, and robust sales and marketing channels. But the applications of Generative AI extend beyond just Splunk.
It will also simplify complex tasks across Cisco’s business, such as setting a configuration screen for a company’s security policy. As Cisco’s CEO, Chuck Robbins, puts it, “We’re going to enable our customers to just use English language to describe what security capabilities they would like … and then we will translate that into a policy that they would review.”
The Future of AI in Business
The software functions as an assistant, simplifying and accelerating the deployment of security policy and other resources without replacing human operators. This acquisition, announced in September 2023 and expected to close by the end of September 2024, was completed in roughly half a year. This swift process was facilitated by the European Union’s unconditional antitrust approval last week.
Cisco’s Journey and the AI Era
Cisco, founded in 1984, rode the telecommunications boom of the 1990s and was once the most valuable company in the world, with a market cap exceeding $550 billion on March 27, 2000. Although it fell from that position when the telecom bubble burst, Cisco still had a valuation of about $199 billion as of Monday.
The AI era, which received a significant boost with the release of OpenAI’s generative AI-based ChatGTP in late 2022, shows no signs of slowing down.
As Robbins states, “I don’t think customers are retrenching.” Businesses are continually learning more about how to deploy AI, and this acquisition is a clear indication of that trend.