Cisco Systems → Splunk
Cisco paid about $28bn for Splunk to turn a networking-equipment maker into one of the world's largest software companies; security revenue rose 59% in the first full year with Splunk, but two years on Cisco's growth was coming from AI networking instead.
An all-cash purchase at $157 a share, Cisco's largest, adding observability and security analytics.
- Value
- $28B
- Announced
- September 2023
- Completed
- March 2024
- Sector
- Technology
- Deal type
- acquisition
- Acquirer
- Cisco Systems (United States)
- Target
- Splunk (United States)
Why it mattered
Splunk, based in San Francisco, sold software that indexes and analyses machine-generated data, used for security monitoring and for observability — watching the health of systems and applications. Cisco's reason for buying it, as announced on 21 September 2023, was to "accelerate Cisco's business transformation to more recurring revenue" and to combine the network with Splunk's security and observability software, moving customers "from threat detection and response to threat prediction and prevention".
The terms were simple: $157 a share in cash, about $28bn of equity value, which Cisco said would be cash-flow positive and gross-margin accretive in the first full year and would add to non-GAAP earnings per share in the second. Splunk's chief executive, Gary Steele, who called Cisco a long-time partner, would join its executive leadership team, reporting to chair and chief executive Chuck Robbins. The European Commission cleared the deal unconditionally in March 2024, and Cisco completed it on 18 March 2024, calling itself "one of the largest software companies globally".
What it left behind
Cisco was cutting staff in the same period: more than 4,000 jobs, 5% of the workforce, announced in February 2024 amid weaker telecom demand, and a further 7% in August 2024 as it consolidated its networking, security and collaboration teams. Steele was promoted within Cisco in May 2024, Cisco's own observability products, including AppDynamics, were moved into Splunk, and in October 2024 Cisco moved its main headquarters into Splunk's former office on Santana Row in San Jose. In the year to July 2025, the first full year with Splunk, Cisco's security revenue rose 59% to $8.1bn and observability revenue 26% to $1.1bn. In the year to July 2026 security grew 2% and observability 4%, while networking grew 22% to $34.7bn, helped by about $4bn of AI-infrastructure revenue from hyperscalers. Buying a business resets the size of a division in a single year; lifting its growth rate afterwards is a separate and slower task.