Cisco Leverages Splunk to Boost Security Business Amid Declining Networking Sales
In the evolving landscape of cybersecurity, one enterprise giant is making significant strides. Cisco, a name synonymous with networking, is now shifting its focus to security, leveraging Splunk’s capabilities to double its security revenue to $2 billion in the recent quarter. This strategic move comes at a time when Cisco’s core networking business is witnessing a decline, making this shift not just timely but crucial for the company’s future.
The significance of this development lies in the broader context of the cybersecurity market. As businesses increasingly digitize their operations, the demand for robust cybersecurity solutions is skyrocketing. Cisco’s strategic shift to a security-first business model, therefore, is a response to this growing demand and a testament to the company’s adaptability.
Cisco’s Strategic Shift: A Closer Look
Cisco’s recent earnings report revealed a 23% decline in networking revenue, which fell to $6.8 billion. However, the company’s total revenue was down only 6% to $13.8 billion, thanks to Splunk’s contribution. Without Splunk, Cisco’s total revenue would have seen a steeper decline of 14%.
Splunk, a software platform that turns machine data into answers, has been instrumental in driving Cisco’s security business. The company’s Q1 security business growth was primarily driven by Splunk’s threat intelligence offerings. Furthermore, Cisco and Splunk have updated data integrations across their security and networking portfolio, creating cross-selling opportunities.
In addition to leveraging Splunk’s capabilities, Cisco also acquired two security companies, DeepFactor and Robust Intelligence, during the quarter. These acquisitions further underscore Cisco’s commitment to bolstering its security business.
Analysis
The shift to a security-first business model is a significant move for Cisco. As Zeus Kerravala, founder and principal analyst at ZK Research, pointed out, “Security is the biggest needle-moving opportunity for Cisco.” The cybersecurity market is massive and fragmented, offering ample opportunities for growth. By tying networking to security and observability with Splunk, Cisco is positioning itself uniquely in this market.
Cisco’s strategic shift to a security-first business model, powered by Splunk and recent acquisitions, is a significant development in the cybersecurity market. As the company navigates the decline in its core networking business, its focus on security presents a promising path forward.
The future of cybersecurity is dynamic and filled with opportunities. As Cisco’s shift demonstrates, adaptability and strategic partnerships are key to navigating this landscape successfully.
Stay informed about the latest developments in cybersecurity. Invest in robust security solutions and regularly review your security measures. Remember, in the digital world, security is not a one-time task but an ongoing process. Stay safe, stay secure.
External Resources
1. Cisco’s Security Strategy: Leveraging Splunk for Growth