Cisco made $20bn takeover bid for Splunk

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(Image credit: Shutterstock / Ken Wolter)

Networking giant Cisco has reportedly made an offer to buy out the data and software analytics company Splunk

A report in the Wall Street Journal citing people familiar with the matter claims Cisco offered a sum of $20 billion, which would be roughly three times bigger than its previous record-breaking deal, $7 billion for Scientific Atlanta, back in 2005.

At the moment, it’s “just” an offer, and the two companies aren’t actively negotiating a deal, the report added.

Rising value

The WSJ hints that Splunk isn’t doing all that great, and that it might see a way out in such an acquisition. It reminds that the company’s shares “rose sharply” in the early days of the pandemic, but “almost fallen in half” since then. 

News of the deal sent the shares up by 17% to hit $114.51 on NASDAQ at press time, down 2.76% on the daily open.

And while the report suggests Splunk might take the deal to save its skin, for Cisco - it suggests this would be another step deeper into the software woods. 

Cisco and Splunk are already partners on data security, but lately, Cisco has been pivoting more towards software and recurring revenue, and less on its core business - selling routers and network switches.

What’s more, in September 2021, Cisco said it would revamp how it reports on software, to better present the growth of this business segment. Of all of its revenue for 2021, software made up almost a third (30%) according to WSJ, with the company allegedly striving towards 50% for revenue from subscriptions by 2025.

The company’s reported revenue for 2021 was $49.8 billion, up 1% compared to the year before, while net income was down 6% year-on-year, with $10.6 billion. 

TechRadar Pro has contacted both Splunk and Cisco for comment.

Sead Fadilpašić

Sead is a seasoned freelance journalist based in Sarajevo, Bosnia and Herzegovina. He writes about IT (cloud, IoT, 5G, VPN) and cybersecurity (ransomware, data breaches, laws and regulations). In his career, spanning more than a decade, he’s written for numerous media outlets, including Al Jazeera Balkans. He’s also held several modules on content writing for Represent Communications.