CEO Chuck Robbins On Cisco Splunk’s AI Advantage And Why HPE-Juniper Misses The Security Mark
“With the Splunk acquisition, we just improved our position in the security world, so for customers who want to run platform-based secure networking infrastructure, we're going to have the right answer. I bet if you ask the customer: 'If you had to prioritize security, or some AI driven dashboard’ they’re going to choose security all day long. And I think that's the differentiation that we have,” Cisco CEO Chuck Robbins said in an exclusive interview with CRN after the $28 billion Splunk deal closed this week.
Cisco CEO Chuck Robbins' says now that Cisco this week closed its $28 billion acquisition of Splunk, it has a big data AI advantage that no competitor can match.
As Cisco moves forward with the integration of the Splunk acquisition, said Robbins in an exclusive interview with CRN the day the deal closed, the AI “insights and recommendations” benefits of capturing data from customers who are providing telemetry back to Cisco is going to become clearer and clearer. “We can do that again at a scale no other competitor can do,” he said. “And when you have that kind of data with customers you can get better information, better recommendations and better insights. And I think that’s the big differentiator.”
With the Splunk acquisition comes big plans around AI, cybersecurity, observability, and creating new, innovative products, services, and capabilities for customers and partners.
Now that Splunk is officially part of Cisco, the real integration work can begin. To start, Cisco’s Talos threat intelligence will be integrated into Splunk to improve threat detection and to facilitate a faster incident response. Cisco plans on combining both companies’ AI assistants for security for a single user experience when analyzing issues and performing tasks across the combined portfolio. The company also plans to feed its cloud, network, and endpoint analytics into Splunk’s security information and event management (SIEM) and security orchestration, automation, and response (SOAR) tools.
At the same time, competition in the AI space looms with Hewlett Packard Enterprise’s pending acquisition of Juniper Networks for its prominent Mist AI engine. Cisco finds itself competing on both the networking and security fronts.
Robbins spoke about Cisco’s Splunk integration strategy, his vision for the creation of an AI platform, and how Cisco- Splunk, will be able to out-AI its rivals across security and networking.
Here's what Robbins had to say.
What's Cisco's AI vision?
There are effectively three big pillars for us. Number one is to provide infrastructure for both web-scale [companies] and enterprises to run their AI, whether it's a large language model or advanced AI workloads in the enterprise.
The second pillar, I think, is around the transition of the interfaces to our products to be more natural language [based]. So, whether it's a Cisco security policy engine, ultimately creating an overall Cisco assistant for our customers, but starting with security and collaboration, and full stack and networking, and ultimately unifying that into one. We're obviously using AI -- all sorts of AI -- in the portfolio.
The third is, I think, a critical thing that we will do is help our customers use AI against the massive data set that they will have between what Splunk brings and the data that we can provide and layer into that -- the richness of that data from the traditional Cisco infrastructure that they see and using AI to understand application performance more effectively to defend against and remediate threats.
You have Splunk's data platform, and we inject countless information into that -- we inject all of the infrastructure stuff. If you run AI against that data set, you may be able to see four different independent things that are going on. Independently, they may look harmless, but when they're all happening at the same time, that's a problem. So, that's the big benefit that we think our customers are going to see when we bring these two assets together.
Now that the deal is closed, how critical is Splunk to Cisco's AI story?
It's hugely critical because we needed a large data platform. AI is going to benefit the incumbents with the data sets. In the past, sometimes new technologies would enable startups to compete more effectively, and they'll be some of that, particularly in the AI space. But from an industry perspective, if you're in healthcare, financial services or you're in manufacturing, the companies that have the biggest data sets and apply AI effectively are going to be the ones who create a competitive moat, so having Splunk and giving us that data platform for our customers is hugely important.
How is Cisco, now with Splunk, going to out-AI its competitors?
There's a web-scale infrastructure play, there's utilization of [AI] across our portfolio, which I think every tech company will need to do [and] there's the enterprise infrastructure play.
I think the NVIDIA partnership that we have put together is going to create integrated technology capabilities that will allow enterprises to seamlessly deploy workloads and I think that's going to be a massive differentiator for us.
The other piece, I think, is the data. If you think about what's most important to our customers today, cybersecurity is at the top of the list. Understanding if they're having application issues that are affecting their customer interface or customer experience -- they need to figure those things out quickly. This platform actually gives it to them -- the most important things our customers are trying to solve and at a scale that I don't think anyone else can.
HPE, with its pending Juniper Networks deal, has said that it's disrupting the networking status quo with a modern AI driven networking fabric. HPE CEO Antonio Neri said that what Cisco is doing with Splunk is "totally different." What is Cisco's response?
I think at the end of the day, customers care about high performance, secure network infrastructure. That's what they care about. And we're applying AI to networking data as well. So I think that the thing that's missing there (with HPE Juniper) is security.
With the Splunk acquisition, we just improved our position in the security world, so for customers who want to run platform-based secure networking infrastructure, we're going to have the right answer. I bet if you ask the customer: 'If you had to prioritize security, or some AI driven dashboard’ they’re going to choose security all day long. And I think that's the differentiation that we have.
How can Cisco partners position themselves with Cisco against the presumably strong AI story that a combined HPE/Juniper Networks will have?
There are no different capabilities than [those that] exist today. I think it's going to take a while to get the deal done. They're going to have product overlap issues they're going to have to rationalize. So, I don't think it changes how we compete. I think it [the deal] will probably present opportunity for us in the near term. And I think [for] our customers, as we continue to deliver on the platform strategy that Jonathan [Davidson, executive vice president and general manager, Cisco Networking] has laid out, it's going to become clearer and clearer the amount of data that's coming out of the infrastructure that we deliver to our customers and as those customers are providing telemetry back, and we're able to actually run AI on it and provide insights and recommendations and things to our customers -- we can do that, again, at a scale that no other competitor can do. And when you have that kind of data, your customers are going to get better information, better recommendations and better insights. I think that's the big differentiator.
Will the strategy center on creating a Cisco-owned Splunk AI platform, or spreading AI across Cisco's various business units?
I think you'll see AI spread across all the portfolios, and I think you'll see an AI platform on top of our security assets and observability assets. You have both the observability cloud combined with AppDynamics to give customers greater visibility into what's happening with their applications, etc. And then if you think about the extended detection and response [XDR] platform that we launched, you look at the Talos threat intelligence that we have, if we inject that information into [Splunk's] SIEM platform for our customers, which we've never done before, with the Talos threat intel in there, and then you have the XDR platform interfacing with the SIEM platform to correlate threats rapidly, you'll have a powerful capability that nobody else has.
What can partners expect in terms of product innovations across the portfolio with the integration of Splunk?
I think we'll start to see some of that at RSA [and] the majority of it will come in June at Cisco Live and then .conf, which is [Splunk’s] conference. They’re back to back in [Las] Vegas. But you know, the thing that we're focused on -- while we're going to have a really big announcements and will do big things together -- we also think it's important for us to show early wins for customers … We're going to try to iterate and create value for customers from the smaller things we can do. We'll have bigger stuff along the way as well, but we don't want people to get so transfixed on something so big that we miss opportunities to be helping customers today. That's going to be our strategy.
How will Splunk coming in help increase Cisco's recurring revenue?
[Splunk] finished their year at $4.2 billion in [annual recurring revenue] ARR, growing in the mid-teens, so, add that to our ARR -- We're approaching $29 billion, which is a meaningful number. Cisco standalone last quarter, we achieved 50 percent of our revenue coming from recurring offers, which is what we wanted to have happen by 2025. So, bringing Splunk in will probably ensure that that number stays above that level. I think it comes at a time where we have been all that connected to this increase in our overall software business and we have in excess of $20 billion in software revenue right now, so it's a big contributor.
Cisco has recently announced layoffs, a C-suite reshuffle and now has closed its biggest acquisition to date. What else is the company doing to drive AI growth?
We're spending a lot of time externally with, whether it's the venture community, or others that have portfolios of companies that understand what's happening with the next wave. There's a lot a lot of time spent on that.
We're spending time with a lot of the (AI) model companies to understand where they're headed and how they're evolving. We're just trying to move fast. The thing I would say is, if you look back at the original cloud transition, I think Cisco was ill-prepared for that and didn't handle it very well. In this case, I think we're super well positioned. We're already delivering [AI] assistants [in] our portfolio. We've got AI infrastructure underneath GPUs in the web-scale players and we're building … next generation capabilities. We've got the Nvidia partnership that we're working on and then we've got the whole Splunk acquisition. So, I think if you look back at the cloud [situation] versus where we are today, we're in an incredible position to seize the opportunity ahead of us.
How can partners build out their AI practices? Are there products they should be selling?
If partners want to be deploying solutions that have AI built into them so they're introducing that in their customer base, we have it across full stack observability. The Splunk platform has all sorts of workflow AI that they're doing today. Our collab[oration] portfolio is loaded with it, our security portfolio has so many and will have more as we make announcements that we're delivering on.
In general, I think the partner community needs to really pay attention to the security portfolio, particularly with Splunk coming, I think that's going to move very fast and I think that the capabilities that we, with our partners, should be able to take to our customers in this world of fear and a rapidly evolving threat landscape, I think that's probably the most important thing. Our partners should really pay attention to and understand: What is the innovation that Cisco has been building over the last year and a half? because there's been a lot of positive reception in the marketplace, but I think partners would be well-suited to understand that, and then we're going to tell the story about what we're going to do with Splunk over the next few months and I think that's going to be a big thing for them to pay attention to as well.
Is Cisco pursuing other technology partnerships related to AI?
I think you'll see us partner with other GPU providers as they come to market, so let's say stay tuned on that. We're looking at partnerships with other AI software companies. I think you're actually going to see an increasing amount of collaboration between security competitors. Splunk has all sorts of partnerships with the security competitors that we have today. We announced integrations with some of our competitors [with our] XDR platform. I've talked to some of my peers within very focused security companies and we all realize that if we're going to effectively deal with the bad actors, particularly with AI in their in their toolkit, we're going to have to share threat intelligence more real time than we have in the past. I think some of those partnerships are going to be needed and very much unexpected, probably, in the industry.
Is Cisco becoming a bigger security company than perhaps even its core networking business?
From a dollars perspective, I don't know that that will be the case anytime soon. But I think [security and networking] are both super important. While many customers take for granted the underlying infrastructure, the infrastructure is core, and the security of the infrastructure is core, and we think one of the big differentiators we have with our customers is secure infrastructure. That's a big part of this for us. And they're coming together. You can't have security without a network, and so [the two are] intertwined. But I will say that we have put a ton of focus on security in the last two years and I think the teams have reestablished a very rapid pace of innovation and some really great new products, and you're going to see more. I think it's super important to our customers and they need us to do this really well.
Will 2024 be the year of AI?
It's certainly the beginning, but I think 2025 will be the year of AI. I think we're going to be preparing this year, and we're going to see pilots and proof of concepts. You're going to see enterprise architecture began to evolve as to what the architecture is going to look like to accommodate a lot of these applications, but I think 2025 is going to be when it really explodes.