Cisco Systems Inc. today completed its $28 billion purchase of Splunk, the largest acquisition in the networking giant’s four-decade history.

Rumors that a takeover was on the table first emerged in early 2022. Cisco officially inked the deal about 18 months later, in September 2023, at a price of $157 per Splunk share. The all-cash transaction valued the software maker at a 31% premium to its last unaffected stock price.

Splunk provides a popular data analytics platform that companies use to collect the information generated by their technology infrastructure. The software can analyze that information to detect cyberattacks, as well as find clues about the cause of technical issues such as outages. Splunk’s platform is used by more than 15,000 organizations including most of the Fortune 100.

Over the years, the company expanded its focus to several adjacent areas. It sells a tool called Attack Analyzer that enables cybersecurity teams to open malware in an isolated sandbox and study how it works. Another offering, Splunk SOAR, can automatically detect and respond to cyberattacks.

Cisco offers its own set of cybersecurity products. In a blog post today, Cisco Chief Executive Officer Chuck Robbins and Splunk general manager Gary Steele detailed that the companies’ breach prevention technologies will be combined following the transaction.

One core pillar of the plan is the networking giant’s Talos business unit. It collects threat intelligence such as information about malicious domains and vulnerabilities that hackers use to launch cyberattacks. According to Cisco, the data Talos collects will become available in Splunk’s analytics platform to give companies a more complete picture of the cybersecurity risks they face.

Cisco plans to take a similar approach with the data its breach prevention tools collect in customer environments. “We intend to enable Splunk’s market leading SIEM and SOAR platform to utilize cloud, network, and endpoint analytics available from Cisco’s security portfolio, enabling new ways for customers to detect, investigate, and respond to threats that can only be identified via lateral movement in the network,” Robbins and Steele detailed in today’s blog post.

Artificial intelligence is another priority of the technology integration effort. Both Cisco and Splunk provide AI features in their respective cybersecurity products to help administrators more quickly analyze potential issues. Those features will be combined to provide a common user interface.

“We will drive new innovations with a unified data platform that integrates application, fraud, network, multi-cloud, security, user, and other data sources to address cyber, technical, and business risks throughout the entire portfolio,” Robbins and Steele detailed.

Splunk was actively involved in the open-source ecosystem prior to the acquisition. One of its most significant contributions is a tool for connecting OpenTelemetry and eBPF, two open-source technologies that are widely used in the enterprise to monitor applications. Cisco said that it will continue making “extensive” contributions to OpenTelemetry, eBPF and other open-source projects following the acquisition.

The company projected last September Splunk will increase its annual recurring revenues by about $4 billion. Cisco estimates the acquisition will become accreditive to its adjusted gross margin in its 2025 fiscal year and to adjusted earnings per share the year after that.

Photo: Cisco