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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Let's talk about Cisco.

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Speaker 1: It's betting big on Splunk to build its AI portfolio,

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Speaker 1: recently closing the acquisition of the software company and now

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Speaker 1: announcing plans to invest one billion dollars in startups working

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Speaker 1: on what it calls secure and reliable AI services. Cisco

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Speaker 1: and Splunk unveiling its latest AI enhancements at its annual

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Speaker 1: user conference in Las Vegas dot com. So let's head

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Speaker 1: out there right now. Chuck Robbins, the chair and CEO

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Speaker 1: of Cisco, joining us right now alongside Gary Steel, now

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Speaker 1: the president of Cisco's go to market business, And let's

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Speaker 1: talk about the security aspects of this, because this is

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Speaker 1: really right in your wheelhouse. Chuck is right in the

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Speaker 1: wheelhouse of what Splunk does, and it's what every corporate

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Speaker 1: executive right now is talking about when it comes to AI.

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Speaker 1: Not just how we profit off this, but how do

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Speaker 1: we keep it safe?

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Speaker 2: Yeah, first of all, thanks for having us, and you're

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Speaker 2: you're exactly correct. I think that you know AI has

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Speaker 2: introduced both a set of increased threats as the bad

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Speaker 2: actors around the world actually utilize AI to create more

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Speaker 2: effective attacks and to create more realistic attacks on our customers.

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Speaker 2: At the same time, we can use AI and we

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Speaker 2: are and we will increasingly over the coming months, quarters,

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Speaker 2: and years to actually help our customers defend themselves more effectively.

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Speaker 2: And we think if we do it right, we can

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Speaker 2: actually give our customers a hand up against the bad

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Speaker 2: actors as we look to the future, and we think

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Speaker 2: this acquisition was a big aspect of actually helping us

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Speaker 2: do that.

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Speaker 1: Gary, talk about that here. I know this is probably

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Speaker 1: more momentous for you than maybe it was for Chuck,

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Speaker 1: who's kind of an old hand at this, but you're

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Speaker 1: now under that umbrella here. I mean, Cisco is a behemoth.

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Speaker 1: I mean, I mean the company that you kind of

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Speaker 1: took over there and sort of help facilitate this deal.

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Speaker 1: That was a big deal. It was a big deal

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Speaker 1: for investors. It's going to be a big deal for

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Speaker 1: clients at Spunk and more importantly clients at Cisco.

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Speaker 2: Yeah.

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Speaker 3: Absolutely, and super excited to be part of the Cisco team.

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Speaker 3: What I'm most excited about, frankly, is the journey that

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Speaker 3: we've been on driving amazing innovation and helping our customers

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Speaker 3: leverage AI to have a better security posture. That journey

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Speaker 3: just gets accelerated autder Cisco, and so I couldn't be

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Speaker 3: more excited. We've got some great announcements announcements here at

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Speaker 3: our user conference around AI and how we're bringing AI

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Speaker 3: into the hands of the practitioner to make their lives

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Speaker 3: easier and their jobs better, and all of that work

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Speaker 3: that we've been doing really just gets accelerated being part

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Speaker 3: of Cisco.

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Speaker 4: Hey, Chuck, I'm interested that the one criticism about the

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Speaker 4: deal is that it'll be diluted to Cisco earnings because

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Speaker 4: of the lack of synergies. What in terms of expense synergies.

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Speaker 4: Why is that?

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Speaker 2: Well, first of all, we've all we said from the

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Speaker 2: very beginning that this deal was based on revenue synergies

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Speaker 2: and not call synergies. And when you spend twenty eight

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Speaker 2: billion dollars, I think you want to be a little careful.

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Speaker 2: We close this deal probably six months earlier than we

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Speaker 2: actually expected to, so we're easing into this. We're actually

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Speaker 2: going to spend the next twelve months really focused on

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Speaker 2: the integration, focused on continuing the innovation that the Splunk

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Speaker 2: team is delivering, that the Cisco team is delivering. We've

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Speaker 2: already announced several integrations. We announced them at RSA, we

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Speaker 2: announced them at Cisco Live last week, We're announceding them

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Speaker 2: at dot COF this week. And our view is that

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Speaker 2: we are going to continue to accelerate the value that

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Speaker 2: our customers are going to see from this acquisition, and

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Speaker 2: we think that's more important. There will be cost synergies, Okay,

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Speaker 2: we just start't focused on those in the very near term.

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Speaker 4: Okay, So you're just not there yet, Chuck. Is that

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Speaker 4: is that what I'm reading from you?

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Speaker 2: That's that's one way of putting it. Okay, very good, There,

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Speaker 2: we'll get there.

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Speaker 4: Well, you'll get there. You're not there yet.

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Speaker 3: Gary.

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Speaker 4: What can you do with Cisco that you couldn't do

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Speaker 4: as a standalone company. What is the opportunity that now

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Speaker 4: this splunk can be provided.

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Speaker 3: Yeah, it goes to a few things. One is we

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Speaker 3: get the visibility all the way through the network. So

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Speaker 3: as you think about helping companies improve their security posture

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Speaker 3: or being able to take that network data that's rich

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Speaker 3: to bring into our environments to ultimately identify lateral movement

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Speaker 3: in networks, critical to help customers protect themselves against threat actors,

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Speaker 3: and more broadly, we think about digital resilience as a

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Speaker 3: critical mission that we've been on. So how do you

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Speaker 3: keep systems up and running from a security perspective and

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Speaker 3: an operational perspective That invisibility is something that no other

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Speaker 3: company in the world can deliver, and Splunk plus Cisco

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Speaker 3: is a really unique combination where we can deliver tremendous

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Speaker 3: value to customers as a result.

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Speaker 1: Chuck, I am curious here about what's next. I mean,

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Speaker 1: we talk about this idea of the integration of Splunk

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Speaker 1: and I know this is a big deal. It's going

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Speaker 1: to take some time to really integrate it in there,

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Speaker 1: but there's got to be something else on the horizon.

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Speaker 1: Is there anything else that you're considering.

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Speaker 2: Well, we're continuing to look at anything that can help

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Speaker 2: bring greater value to our customers. I mean we you know,

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Speaker 2: we've had this M and A strategy for years that

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Speaker 2: focused around strategic fit, financial balance, and cultural alignment. And

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Speaker 2: when you find those three things and there's great value

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Speaker 2: that we can deliver for our customers, then we're interested

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Speaker 2: and you can think about other opportunities and security. Although

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Speaker 2: I will say that our internal team at both Cisco

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Speaker 2: and the team at s Plunk have been innovating over

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Speaker 2: the last eighteen to twenty four months at a pace

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Speaker 2: that we had in prior so. But you think about security,

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Speaker 2: you think about some of the emerging AI stuff that's

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Speaker 2: going on, You think about observability. Anything that helps us

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Speaker 2: deliver greater insights from all the data that our customers

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Speaker 2: are trying to navigate would be areas that we would

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Speaker 2: focus on, both organically as well as inorganically.