By Steven Rosenbush
Cisco Systems closed its $28 billion all-cash acquisition of cybersecurity and analytics company Splunk on Monday.
The deal, the largest in Cisco's history, was completed months earlier than projected and reflects the extraordinary effort many companies are undertaking as they remake their businesses around data and artificial intelligence.
Cisco Chief Executive Chuck Robbins and former Splunk CEO Gary Steele -- now an executive vice president at Cisco -- said in an interview that AI will be deeply woven into the combined companies, and that they saw no hint that the current wave of business AI adoption was going to slow down or reverse course.
The combined company will use AI to help customers draw correlations among intelligence coming from different vendor platforms, so that they can take a more predictive approach to cybersecurity. While that predictive capability has been developing for some time, the company also plans to launch more capabilities that make use of generative AI to simplify their software and make it easier for people without technical training to operate the tools.
Splunk, launched in 2003, developed a dashboard that allows users to search, monitor and analyze machine-generated data. It takes training to use it and generative AI helps reduce the learning curve, according to Steele. "Splunk has its own proprietary language, the way in which you issue commands, and you have to be reasonably technical to do that," Steele said.
"With the AI assistance that we've launched, you can use English language to automatically generate that proprietary language. You can get outcomes without having all the advanced knowledge," Steele said.
Splunk's AI will benefit from Cisco's massive amounts of data, not to mention its global presence and sales and marketing channels, Steele said.
Generative AI will have other applications across Cisco's business, such as simplifying the complex task of setting a configuration screen for a company's security policy, according to Robbins. "It's very technical. 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," Robbins said.
The software would function as an assistant, simplifying and speeding up the deployment of security policy and other resources without replacing human operators, according to Robbins.
When the deal was announced in September 2023, the companies said they expected it to close by the end of September 2024. The process was completed in roughly half a year. Last week, the European Union gave the deal unconditional antitrust approval, after regulators found it wouldn't pose barriers to competition.
Networking equipment pioneer Cisco, founded in 1984, rode the telecommunications boom of the 1990s. It was for a time the most valuable company in the world. Cisco had a market cap in excess of $550 billion on March 27, 2000. It tumbled from that position as the telecom bubble popped. Cisco had a valuation of about $199 billion on Monday.
There is no sign that the AI era, which got a big boost with the release of OpenAI's generative AI-based ChatGTP in late 2022, is slowing down, according to Robbins.
"I don't think customers are retrenching," Robbins said. It's true that businesses are learning more about how to deploy AI, including considerations and risks, he said. But most companies are too wary of falling behind the competition to slow down their adoption of AI, he said.
The rise of AI will tend to favor large, data-rich companies over smaller upstarts, according to Robbins. "This is a revolution that actually favors incumbents with large datasets and that's unique. A lot of times in the past, the big technology waves have allowed smaller companies to compete and disrupt markets. That's still a risk, but large companies with large datasets that use AI effectively are going to increase their competitive differentiation," Robbins said.
Write to Steven Rosenbush at steven.rosenbush@wsj.com
(END) Dow Jones Newswires
March 18, 2024 17:15 ET (21:15 GMT)
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