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November 12, 2024
Cisco is no stranger to acquisition. Not every vendor has a dedicated page on the corporate website charting the number of buyouts, such is the breadth and depth of the purchased portfolio.
Of the 210 acquisitions to date – at an average price point of approximately $887 million in USD – the addition of Splunk is the most impactful yet at $28 billion.
But as the ink dries on the blockbuster deal of the industry, now the real work starts. In that sense, 28 billion reasons to integrate exist.
“We’re starting at the right place, which is on the product,” said Craig Bates, Vice President and Country Manager of Australia and New Zealand (A/NZ) at Splunk. “We’re looking at how we bring greater value together and we’re seeing immediate impact with our customers already.”
Since acquisition, Cisco has moved quickly to bring the combined engineering team under one leader in Tom Casey – Senior Vice President and General Manager of Products and Technology at Splunk.
Within the first 120 days, nine different integrations have been completed between AppDynamics and Splunk Observability Cloud, previously competitive IT monitoring solutions from both vendors.
This is in addition to “immediate integrations” with Talos – the threat intelligence arm of Cisco – and deeper connections in the emerging extended detection and response (XDR) space.
On security, that translates into:
On observability, that equates to:
Plus, a unified look and feel across the entire portfolio.
“There was naturally some overlap in the observability space but overall, our product portfolio is enormously complementary,” Bates added. “The majority of conversations currently with customers are about how this comes to life and how this can become valuable for businesses.
“Think of the sheer volume of data assets that Cisco brings to our platform – there’s a huge opportunity to provide visibility across entire environments whether from security, performance or availability perspectives.”
For Bates, the ability to bring network telemetry into a single platform and support that through end-to-end visibility is the most clear example of Cisco and Splunk in action.
“It’s a problem that every organisation is acutely aware of,” he noted. “The people, processes and technologies that businesses have in place today to solve those observability challenges are not adequate.”
According to Moxie Research – based on an in-depth survey of 208 IT executives in Australia in May 2024 – product consolidation ranks as a leading priority for local businesses during the next 6-12 months.
The vast majority of organisations “strongly agree” that multiple security vendor products create additional risk and exposure (85%), operational challenges (81%) and unnecessary complexity (80%).
In turn, this is causing new implementation challenges for 83% of Australian companies, escalating into increased project costs (87%) as a consequence.
“Businesses have too many tools,” Bates added. “Collectively, that costs too much money – probably even more than the organisation already thinks. And they don’t do the job, they don’t help companies take a view on anything in the business or provide the granularity required to fix problems.”
Cliched perhaps but if every business truly is a digital business – and by extension, every government agency is a digital agency – then the criticality of these problems is only heightened by a distinct lack of visibility.
“Look back four or five years ago,” Bates recalled. “Lots of tools trying to solve lots of technical problems and that issue has now shifted to the executive level with executive accountabilities. But a lack of clarity still exists.”
The bulk of Splunk’s work in the local market is anchored on addressing this specific problem statement.
“The volumes of data coming through today are just not manageable in the same traditional ways,” Bates explained.
“Across network, security and observability, the combination of these assets across Splunk and Cisco is unparalleled – irrespective of whether it’s across multi-cloud, hybrid or on-premises environments.”
The need for organisations now is to work with a vendor and partner ecosystem capable of solving such problems “holistically”.
A lot of tools and applications have grown up in insolation, seldom in sync with the wider enterprise environment and almost always at odds with customer experience. And then it proliferates into hundreds and hundreds of disparate systems housing disparate data and workloads.
“There’s a lot of evidence which shows that this acquisition is being treated very differently from the Cisco side of things,” Bates added. “We’re accelerating our roadmap through a combined portfolio and this turbo charges everything we were already doing in market.”
In short, Bates said the thesis behind the acquisition is growth and aligned to the objective of making the combined business become bigger in market.
“This isn’t about looking for huge efficiencies which we’ve seen in other acquisitions,” he outlined. “That’s what’s most exciting as we see the sum of the parts come together rather than a need to consolidate or rationalise.”
Leading through change
As Cisco powers ahead with product integration, they do so with Gary Steele as President of Go-to-Market.
Formerly CEO of Splunk, Steele is tasked with leading a unified organisation across Sales, Partner and Global Marketing teams – alongside overseeing more than 7,000 employees from Splunk.
“Culture has been something we’ve been incredibly conscious of,” Bates noted. “This is where the tone from the top becomes very important.”
Citing the presence of Chuck Robbins – CEO of Cisco – at Splunk’s annual .conf24 User Conference in Las Vegas, Bates stressed the importance of top-down leadership to maintain combined company culture.
“We had Chuck on stage wearing a Splunk t-shirt talking to our entire community and being at pains to say that part of the reason for the acquisition was the culture of Splunk,” he recalled.
“That’s based around our platform and there’s a real desire to ensure we preserve that as it’s part of who we are going forward. Having that global clarity helps demonstrate this further with our local teams also.”
Cultural preservation is everything for both the acquirer and the acquired. Why spend $28 billion on a unique culture to destroy said culture within a heartbeat of closing the deal?
“Our teams are excited about the opportunity because the cultural alignment is strong between Cisco and Splunk,” Bates shared. “It’s full steam ahead and we’re proud to be part of something special.”
Bates was quick to add an air of pragmatism however, emphasising that acquisitions of this size and scale take time locally, regionally and globally. Plus, information isn’t always widely available for immediate digestion.
Hence the importance of leaders capable of providing consistent and clear communication throughout the entire process. Company cultures depends on it.
“But it doesn’t change your principles as a leader,” Bates stated. “My principles are really clear about creating the sort of place that I want to work in and that I want to be part of creating at Splunk.
“How can we have an environment where everybody can turn up to work and just flat out be themselves and in doing so, are able to do the most impactful work that they possibly can.”
Bates cited the mountains of research on this very topic, notably in relation to individuals feeling a pressure to show up in a specific way or fit into a certain model.
“My sense is when people don’t have to do that – and can feel really comfortable being who they are – they can instead put their energy into making a positive impact,” he added.
Whether that’s through collaboration with teammates or customers, the domino effect is an environment that evolves into a “really great place to work” with a “very rewarding” experience.
“Then you have a much more successful business because of it,” Bates said. “That’s at my core as a leader in terms of my principles and purpose.”
Despite acknowledging that such personal traits seldom change, Bates accepted that leaders must continually be cognisant of setting clear objectives and goals within the team.
“Over communicating, being clear on the different steps that are happening for the team – this is what we need to do,” he shared. “This comes back to our number one job as a team around being customer and partner obsessed. That’s written up in our plan and we continue to be focused on that every single day.”
Cynically speaking, all leaders advocate the importance and value of culture. For many, it’s a stock-standard response to almost any question on team dynamics and internal strategy.
While top-down commitment is crucial, Bates as a leader is one person – a mere cog in the corporate wheel.
“That’s why I was conscious to say that’s the sort of place that I want to be part of,” Bates clarified. “And that’s the sort of culture that I want to be able to contribute to and help shape.
“Because this isn’t something that’s up to me, it’s the organisation as a whole. That’s why having a great team of leaders that are very clear on how we show up is so important, moment by moment.”
That could be as simple as calling out bad behaviour or exposing toxic conditions, building an environment in which people support each other and forever reinforcing those foundational values.
“When you drift from those principles or values, that’s when you encounter incongruence in the way that’s showing up within teams,” Bates noted.
Creating company clarity
Despite such sizeable change taking place internally and externally, the need for business as usual is paramount as market dynamics play out. Hence the importance of a leader like Bates to create clarity.
“You can argue that’s job number one for any leader,” he stated. “It’s important anyways but especially so today and we’ll keep on over communicating and ensuring our teams come along the journey with us.”
For example, Simon Davies as Senior Vice President (SVP) and General Manager of Asia Pacific at Splunk runs fortnightly in timezone calls for any employee within the regional business to engage with the executive leadership team on particular topics.
Toni Pavlovich – formerly Chief Customer Officer (CCO) at Splunk and now SVP of Customer and Partner Success at Cisco – was a recent speaker.
“There’s no change in the approach just a conscious commitment to be as clear as possible,” Bates said. “Because in the absence of that, that’s when the uncertainty comes in at a human level.
“We’re bringing the teams together through our office spaces in Australia but we understand that’s a very personal thing. How you go to work and how you engage daily is very personal so we continue to be mindful of that.”
Almost daily conversations with Ben Dawson – Vice President of A/NZ at Cisco – is also helping to smooth the transition between both teams locally. For Bates, this is also playing out in the field.
“We’re already jointly working with customers and that’s a reflection of how similar our cultures are,” he said. “Yes, a set of guidelines and directions on engagement exists but teams are just picking up the phone and getting together.
“Accounts are working through how we make things better for customers and show up in a consistent manner. We have dozens and dozens of engagements in this space already.”
In looking ahead, ongoing work exists around bringing the core operations of the business together to ensure customers can procure solutions on one set of commercial paper.
“Our job is to help our customers be successful with our product because they have so many challenges today,” Bates added.
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