Cisco's Splunk Acquisition Gets Mostly Thumbs-Ups in Canalys Poll
The polls likely reflect ongoing concerns from Splunk partners.
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In the overall channel poll, respondents in APAC and EMEA are closely aligned, so a quarter of them see the Splunk acquisition as an excellent move and giving Cisco a massive competitive advantage, said Canalys' Alastair Edwards.
"Twenty-six percent say it's a good move; it will strengthen Cisco," he said. "APAC and EMEA are fairly well-aligned for all of these. EMEA partners say that they're slightly less positive, 11% are saying there's some benefits, but these will be small in the short term. It's roughly the same actually for LATAM and that's quite a fairly consistent move. So the best thing is really to get a global view ... and it's a pretty strong endorsement of the move."
Few North America respondents participated in the overall channel poll because Canalys is still in the process of strengthening its footprint in the region.
The largely positive response to the overall channel poll reflects a few things, Edwards said.
"There is generally a sense that Cisco's move will be highly beneficial to Cisco and ... give a boost to their strategy to become more software and services, and subscription-oriented," he said. "I think there's another angle, in that it gives Cisco another important software platform for MSPs, because MSPs have been a segment of the channel that Cisco has been keen to develop and has been investing in. I think that absolutely gives them a stronger proposition in that space."
Among those criticizing the acquisition, "particularly if they've invested heavily in Splunk, and they built their platform on Splunk or they built the business on Splunk, there may be a concern among some partners who are not Cisco partners in particular about what this means with Splunk being absorbed into a larger organization," Edwards said.
"But on the whole, I think this shows that there is a general sense that this is a good move for Cisco and it's positive for the channel," he said.
Splunk has a couple of distributors that are not Cisco distributors, Edwards said. For example, Arrow Electronics is a big Splunk distributor and is currently not a Cisco distributor.
"So there's a question there about what this will mean for Arrow and a potential partnership with Cisco," he said. "There will be some questions for partners that have built and invested with Splunk, and how they're facing being adopted into the Cisco ecosystem. That can have implications for their business. So there are a number of different angles to this."
This is a reflection of what partners are likely to see from their customers in terms of the adoption of Splunk, Edwards said.
"There have been some questions about Splunk's future and performance, that kind of thing," he said. "So in some respects, being part of a large, global organization with a history and experience of integrating these kind of companies, is it potentially a positive? I'm sure Splunk would have become an acquisition target by others, and as part of Cisco, it finds a home that potentially accelerates Cisco's strategy."
A challenge for Cisco remains extending its reach into cybersecurity, Edwards said.
"It obviously has a cybersecurity portfolio; it's a major cybersecurity player," he said. "But I think Splunk really gives them a new leverage and a new set of technologies in the cybersecurity space that it didn't have. So that may be an angle that is kind of attractive to partners."
Cisco partners can be frustrated by the lack of differentiation against some of the specialists who are making greater headway in cybersecurity, such as Fortinet and Palo Alto Networks, Edwards said.
"So there may be ... some Cisco security partners that are very excited about this because it really strengthens Cisco in certain parts of the SecOps space where they don't necessarily have such a good play," he said. "You've got the MSPs who are looking at Splunk as a platform, and then you've got the security partners who work with Cisco who are really interested in what this will mean for strengthening Cisco's security portfolio. Those are two areas that Cisco is very keen to invest in and drive future growth. So I think that will be part of the reason why partners are interested in this move and see it as a positive."
A potentially big concern for Splunk partners is the prospect of the business moving under Cisco, which plays at a very specific point in the customer environment, at the network and cybersecurity levels, and "when you start to get up into the application layer, that's not where Cisco typically plays," Edwards said.
"And so there may be some concerns about to what extent Cisco will maintain the core value and be able to integrate effectively with a company like Splunk, which is quite a diversification or Cisco from that point of view," he said. "They have moved into ... more application observability technologies, but in terms of the Splunk proposition, it's an area that they haven't historically had a big play in. So I think there will be some concerns from some partners around that. There will be Cisco partners that maybe don't currently have a Splunk engagement that are kind of excited by the opportunity that this brings them. But are they even the right partners for Cisco to take Splunk to market? There's a big question there.
"And then the partners that are working with Splunk today that are not Cisco partners or even those that may have a Cisco relationship, there may be some concerns about to what extent Cisco will be able to manage that acquisition effectively and maintain the value that the company brings," Edwards noted.
The polls reflect early sentiment and were taken not long after the acquisition was announced, Edwards said. It doesn't reflect a detailed view by partner type.
"We do this with other vendors as well," he said. "For example, we did a similar thing with Broadcom acquiring VMware. And I think the sentiment was definitely not as positive on that. We want to gauge that sentiment and the changes in sentiment over time. I think people don't know at this point what will happen from a partner perspective with VMware and we'll be running a survey again or a set of quick polls after that closes to get a sense of sentiment from the channel on VMware. And similarly, we'll do the same thing with this."
The polls reflect early sentiment and were taken not long after the acquisition was announced, Edwards said. It doesn't reflect a detailed view by partner type.
"We do this with other vendors as well," he said. "For example, we did a similar thing with Broadcom acquiring VMware. And I think the sentiment was definitely not as positive on that. We want to gauge that sentiment and the changes in sentiment over time. I think people don't know at this point what will happen from a partner perspective with VMware and we'll be running a survey again or a set of quick polls after that closes to get a sense of sentiment from the channel on VMware. And similarly, we'll do the same thing with this."
A new Canalys poll shows the overall channel viewing Cisco's Splunk acquisition in a positive light, while just 17% say it's a terrible move.
In a separate Canalys poll, Cisco partners are generally positive about the Splunk acquisition and what it could mean for them. As for those reacting less positively, that could create challenges for Cisco.
More than 280 respondents participated in the overall channel poll, which took place online from Sept. 29-Oct. 24. Surveys are conducted regularly via Candefero, the online channel partner community created and run by Canalys. Candefero has thousands of members worldwide, and includes resellers, SIs, MSPs, distributors and retailers.
Splunk Acquisition Reactions Vary
When asked, "What's your view of Cisco's planned acquisition of Splunk?" the responses included:
Twenty-three percent said it's an "excellent move" and it gives Cisco a massive competitive advantage.
Twenty-six percent said it's a "good move" and it strengthens Cisco in key growth areas.
Fourteen percent said there are "some benefits, but these will be small in the short term."
Seventeen percent said it's a "terrible move" and Splunk's value will be "lost in Cisco."
Nineteen percent said they don't know or it's too early to say.
Alastair Edwards, chief analyst with Canalys, said the overall channel poll is a "pretty strong endorsement" of the acquisition.
"But these are not just Cisco-only partners," he said. "These are partners that would be already selling Splunk and that would be maybe selling Cisco, but may also be selling competitive products and vendors."
Scroll through our slideshow above for more on the Canalys polls.
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