Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Let's talk about Cisco.
Speaker 1: It's betting big on Splunk to build its AI portfolio,
Speaker 1: recently closing the acquisition of the software company and now
Speaker 1: announcing plans to invest one billion dollars in startups working
Speaker 1: on what it calls secure and reliable AI services. Cisco
Speaker 1: and Splunk unveiling its latest AI enhancements at its annual
Speaker 1: user conference in Las Vegas dot com. So let's head
Speaker 1: out there right now. Chuck Robbins, the chair and CEO
Speaker 1: of Cisco, joining us right now alongside Gary Steel, now
Speaker 1: the president of Cisco's go to market business, And let's
Speaker 1: talk about the security aspects of this, because this is
Speaker 1: really right in your wheelhouse. Chuck is right in the
Speaker 1: wheelhouse of what Splunk does, and it's what every corporate
Speaker 1: executive right now is talking about when it comes to AI.
Speaker 1: Not just how we profit off this, but how do
Speaker 1: we keep it safe?
Speaker 2: Yeah, first of all, thanks for having us, and you're
Speaker 2: you're exactly correct. I think that you know AI has
Speaker 2: introduced both a set of increased threats as the bad
Speaker 2: actors around the world actually utilize AI to create more
Speaker 2: effective attacks and to create more realistic attacks on our customers.
Speaker 2: At the same time, we can use AI and we
Speaker 2: are and we will increasingly over the coming months, quarters,
Speaker 2: and years to actually help our customers defend themselves more effectively.
Speaker 2: And we think if we do it right, we can
Speaker 2: actually give our customers a hand up against the bad
Speaker 2: actors as we look to the future, and we think
Speaker 2: this acquisition was a big aspect of actually helping us
Speaker 2: do that.
Speaker 1: Gary, talk about that here. I know this is probably
Speaker 1: more momentous for you than maybe it was for Chuck,
Speaker 1: who's kind of an old hand at this, but you're
Speaker 1: now under that umbrella here. I mean, Cisco is a behemoth.
Speaker 1: I mean, I mean the company that you kind of
Speaker 1: took over there and sort of help facilitate this deal.
Speaker 1: That was a big deal. It was a big deal
Speaker 1: for investors. It's going to be a big deal for
Speaker 1: clients at Spunk and more importantly clients at Cisco.
Speaker 2: Yeah.
Speaker 3: Absolutely, and super excited to be part of the Cisco team.
Speaker 3: What I'm most excited about, frankly, is the journey that
Speaker 3: we've been on driving amazing innovation and helping our customers
Speaker 3: leverage AI to have a better security posture. That journey
Speaker 3: just gets accelerated autder Cisco, and so I couldn't be
Speaker 3: more excited. We've got some great announcements announcements here at
Speaker 3: our user conference around AI and how we're bringing AI
Speaker 3: into the hands of the practitioner to make their lives
Speaker 3: easier and their jobs better, and all of that work
Speaker 3: that we've been doing really just gets accelerated being part
Speaker 3: of Cisco.
Speaker 4: Hey, Chuck, I'm interested that the one criticism about the
Speaker 4: deal is that it'll be diluted to Cisco earnings because
Speaker 4: of the lack of synergies. What in terms of expense synergies.
Speaker 4: Why is that?
Speaker 2: Well, first of all, we've all we said from the
Speaker 2: very beginning that this deal was based on revenue synergies
Speaker 2: and not call synergies. And when you spend twenty eight
Speaker 2: billion dollars, I think you want to be a little careful.
Speaker 2: We close this deal probably six months earlier than we
Speaker 2: actually expected to, so we're easing into this. We're actually
Speaker 2: going to spend the next twelve months really focused on
Speaker 2: the integration, focused on continuing the innovation that the Splunk
Speaker 2: team is delivering, that the Cisco team is delivering. We've
Speaker 2: already announced several integrations. We announced them at RSA, we
Speaker 2: announced them at Cisco Live last week, We're announceding them
Speaker 2: at dot COF this week. And our view is that
Speaker 2: we are going to continue to accelerate the value that
Speaker 2: our customers are going to see from this acquisition, and
Speaker 2: we think that's more important. There will be cost synergies, Okay,
Speaker 2: we just start't focused on those in the very near term.
Speaker 4: Okay, So you're just not there yet, Chuck. Is that
Speaker 4: is that what I'm reading from you?
Speaker 2: That's that's one way of putting it. Okay, very good, There,
Speaker 2: we'll get there.
Speaker 4: Well, you'll get there. You're not there yet.
Speaker 3: Gary.
Speaker 4: What can you do with Cisco that you couldn't do
Speaker 4: as a standalone company. What is the opportunity that now
Speaker 4: this splunk can be provided.
Speaker 3: Yeah, it goes to a few things. One is we
Speaker 3: get the visibility all the way through the network. So
Speaker 3: as you think about helping companies improve their security posture
Speaker 3: or being able to take that network data that's rich
Speaker 3: to bring into our environments to ultimately identify lateral movement
Speaker 3: in networks, critical to help customers protect themselves against threat actors,
Speaker 3: and more broadly, we think about digital resilience as a
Speaker 3: critical mission that we've been on. So how do you
Speaker 3: keep systems up and running from a security perspective and
Speaker 3: an operational perspective That invisibility is something that no other
Speaker 3: company in the world can deliver, and Splunk plus Cisco
Speaker 3: is a really unique combination where we can deliver tremendous
Speaker 3: value to customers as a result.
Speaker 1: Chuck, I am curious here about what's next. I mean,
Speaker 1: we talk about this idea of the integration of Splunk
Speaker 1: and I know this is a big deal. It's going
Speaker 1: to take some time to really integrate it in there,
Speaker 1: but there's got to be something else on the horizon.
Speaker 1: Is there anything else that you're considering.
Speaker 2: Well, we're continuing to look at anything that can help
Speaker 2: bring greater value to our customers. I mean we you know,
Speaker 2: we've had this M and A strategy for years that
Speaker 2: focused around strategic fit, financial balance, and cultural alignment. And
Speaker 2: when you find those three things and there's great value
Speaker 2: that we can deliver for our customers, then we're interested
Speaker 2: and you can think about other opportunities and security. Although
Speaker 2: I will say that our internal team at both Cisco
Speaker 2: and the team at s Plunk have been innovating over
Speaker 2: the last eighteen to twenty four months at a pace
Speaker 2: that we had in prior so. But you think about security,
Speaker 2: you think about some of the emerging AI stuff that's
Speaker 2: going on, You think about observability. Anything that helps us
Speaker 2: deliver greater insights from all the data that our customers
Speaker 2: are trying to navigate would be areas that we would
Speaker 2: focus on, both organically as well as inorganically.