What a $28 Billion Deal Indicates about the Future of Observability

Observability hit the headlines again after Cisco’s intention to acquire Splunk was announced. The $28 billion deal is Cisco’s largest ever purchase and is the second largest tech acquisition of 2023 so far. This agreement marks a big strategic change for Cisco as it continues its move from hardware to software.

But there’s a bigger story here that should interest every IT decision maker: the imperative of observability is both a very real and complex problem to solve, and Cisco, like many others, are making attempts to solve it.

Why Cisco bought Splunk

Observability has its roots in the mid-20th century tracking of satellites, rockets, and aircraft. These new technologies were monitored via telemetry, the remote collection of data. As devices and networks have grown more and more complex, telemetry has become more sophisticated, and in the 1990s, the term “observability” began to be used to describe the data-driven measurement of an IT network’s state. Since then, the rise of cloud-based networks, mobility, and hybrid work patterns has seen its importance soar further still.

Splunk specializes in logging, security information, and event management (SIEM) and machine data analytics. It has carved out a significant market with customers, including Coca-Cola and Intel, as well as Cisco itself. The deal aims for Cisco to diversify away from its networking equipment business, which has been slowing. This year has seen Cisco make a key shift in its monitoring solutions by moving resources from AppDesign to ThousandEyes, and Splunk is an important acquisition for them. According to Cisco, the acquisition strengthens its security and observability capabilities, which are two of the most important areas for its customers.

What the deal means for observability

The deal comes at an exciting time for observability. In July, web analytics company New Relic was taken private in a $6 billion deal. Meanwhile, in September, Riverbed announced additions to their suite that enable users to track energy efficiency across networks.

Generative AI is going mainstream, and observers noted that Cisco’s acquisition announcement used the word AI a whopping eight times. Yet while the deal may be on-trend, how successful it is in the long run remains to be seen. The details have been approved by both boards, but there are still regulatory hurdles that need to be crossed. Perhaps a bigger problem is how Cisco manages the overlap between its products and sales channels – and whether that distraction impedes their ability to execute.

The future of observability

Other shifts in the industry continue. Alongside the rise of AI, thought leaders have a new favorite acronym. MELT (Metrics, Events, Logs, and Traces) sums up the resources that can be combined to give a holistic view of a digital ecosystem. Some experts are seeing traces beginning to overtake logs in importance. Grafana’s open-source eBPF solution enables the tracing of applications without instrumentation. Meanwhile, the OpenTelemetry (OTEL) framework is increasingly used across the industry and can enhance infrastructure, application, and end-user monitoring. At Riverbed, we believe all telemetry sources are important to see the full picture.

The future of observability arguably belongs to whoever can bring all these telemetry streams of data together best and present the results in a way that is consistent and shareable. While individual models have their uses, a mature unified observability solution offers a view of the entire digital ecosystem as one cohesive vehicle. Although many claim to do this, few actually do.

This is a specialty of Riverbed, whose observability suite has transformed the world’s largest organizations and how they deliver applications and services to both their customers and digital workforce. By bringing data together and using AI-powered automation, Riverbed IQ can aid problem-solving, empower decision-making, and keep users productive. It also supports NetProfiler, NetIM and Riverbed’s real-time digital experience management via Aternity. Riverbed’s open observability suite offers a richness that sets it apart from the rest.