Cisco Systems, Inc. - Special Call - SEHK:4333

SEHK:4333

Ahmed Sami Badri, the Head of Investor Relations at Cisco Systems, Inc., made the following statements during the special call:

1. Introduction and Opening Remarks:

   • Ahmed introduced himself as the Head of Cisco Investor Relations and thanked everyone for joining the session.
   • He mentioned that Gary Steele, the President of Go-to-Market, would be presenting and that Cisco had recently acquired Splunk, with the deal closing on March 18, 2024.

2. Safe Harbor Statements:

   • Ahmed read some safe harbor statements, mentioning that the presentation contained forward-looking statements about future events and financial performance.
   • He noted that actual events or results might differ materially from the projections or statements.

3. Transition to Tech Talk:

   • Ahmed handed over the presentation to Gary Steele for the tech talk.

4. Questions and Answers Session:

   • After Gary's presentation, Ahmed thanked him and proceeded to ask several questions based on the presentation.

5. Questions Asked by Ahmed:

   • Product Excitement: Ahmed asked Gary about what he was most excited about from a product perspective now that Splunk is part of Cisco.
   • SIEM, SOAR, and XDR Simplification: Ahmed requested Gary to simplify the concepts of SIEM, SOAR, and XDR and explain how they fit together.
   • Positioning of Splunk Relative to Competitors: Ahmed asked about how Splunk positions itself relative to competitors, especially regarding being a heavyweight solution rather than a feature offering, and who the typical buyer is within an organization.
   • Full-Fidelity Ingestion at Scale: Ahmed inquired about the concept of full-fidelity ingestion at scale without sampling and why it is important.
   • Scale of Data Ingestion: Ahmed asked for clarification on the scale of data ingestion, referring to the petabyte reference mentioned earlier.
   • Integration of ThousandEyes: Ahmed asked how ThousandEyes would be integrated into Splunk's products.
   • Deployment Options: Ahmed sought information on Splunk's deployment options, including hybrid cloud environments, separate contracts, and federated search.
   • Pricing Model:
     • Workload-Based Pricing: Ahmed asked Gary to explain Splunk's workload-based pricing model.
     • Impact of AI on Splunk Processing Language (SPL): Ahmed asked about the potential impact of AI and large language models on SPL.
   • Competitive Environment: Ahmed questioned how the competitive environment is changing and how Splunk is defending its turf against competitors.
   • Ingest vs Workload-Based Pricing: Ahmed asked about the number of customers on ingest pricing versus workload-based pricing and the unit of measure for workload-based pricing.
   • Value to Service Providers: Ahmed inquired about how Splunk can add value to service providers.
   • Enhancement of Splunk Portfolio with Cisco Data: Ahmed asked about the timeline for enhancing the Splunk portfolio with data from Cisco and whether it would enable new products or enhance existing ones.
   • Data Privacy Issues: Ahmed asked about potential data privacy issues with new Cisco and Splunk customers leveraging data access across networks.
   • Integration of AppDynamics: Ahmed asked about how Splunk would integrate AppDynamics into its product.

6. Closing Remarks:

   • Ahmed thanked Gary and the Splunk team for the presentation and invited attendees to the Cisco Investor Day in June.

   • He provided details about the upcoming Cisco Investor Day and encouraged attendees to join.

   • Ahmed thanked everyone for tuning in and closed the session.

Gary L. Steele, President of Go-to-Market, provided extensive insights during the special call. Here’s a detailed summary of his statements:

Introduction

• Gary expressed excitement about participating in the call and discussed Splunk’s focus on building a safer and more resilient digital world.

Splunk's Focus

• Splunk helps large and complex organizations maintain the security and uptime of their digital systems.
• Resilience is challenging due to the rapid expansion of digital footprints, especially post-pandemic.
• Organizations use digital systems for customer interactions and revenue generation.
• Visibility is crucial for understanding the digital footprint and ensuring security and uptime.

Splunk’s Differentiation

• Splunk excels in collecting machine data, structured and unstructured, and driving analytics to understand security and application characteristics.
• Splunk’s visibility across digital footprints helps organizations decide on security and resilience strategies.
• Splunk addresses the challenge of determining whether an application issue is security-related or a technical failure.
• Splunk integrates security and observability on a single platform, enhancing organizational resilience.

Product Line

• Splunk offers a unified platform with domain-specific applications for security and observability.
• Splunk has a broad developer community that builds applications on top of the Splunk platform.
• Splunk’s platform allows organizations to see more and drive better results from vast sets of data.
• Splunk provides best-in-class applications for security and observability.
• Splunk uses artificial intelligence (AI), particularly machine learning, to drive outcomes.

Data Management

• Splunk supports data residing in multiple clouds (AWS, Azure, GCP) and on-premise environments.
• Splunk allows customers to leave their data where it is most cost-effective and strategically beneficial.
• Splunk provides analytics across multicloud and hybrid environments, offering customers flexibility and visibility.

Regulatory Compliance

• Splunk helps customers navigate the complexity of data residency and retention regulations.
• Splunk provides the flexibility needed for compliance with global privacy laws.

Data Overlap

• Splunk addresses the issue of data overlap in security and observability, reducing costs associated with collecting the same data twice.

Market Recognition

• Splunk has been recognized as a leader by Gartner in both security and observability.

Security Operations Center (SOC)

• Splunk powers SOC operations, enabling faster incident detection, investigation, and response.
• Splunk reduces alert noise and improves response times using orchestration and automation.
• Splunk continues to innovate and extend its leadership in the security operations center market.
• Splunk integrates AI into workflows to improve SOC efficiency.

Product Capabilities

• Splunk offers detailed threat analysis, orchestration and automation (SOAR), and user behavior analytics (UBA).
• Splunk integrates data from various sources, including competitors, enhancing its capabilities.

Integration with Cisco

• Cisco adds user, cloud, and breach protection to Splunk’s unified threat detection, investigation, and response (TDIR) capabilities.
• Cisco’s Talos threat research enhances Splunk’s threat intelligence.
• The combination with Cisco accelerates Splunk’s AI efforts.
• Cisco’s data enriches Splunk’s analytics, improving outcomes.

Splunk + Cisco

• The combination delivers one-of-a-kind customer value focused on digital resilience.
• Unifying security and observability helps customers overcome complex problems and optimize investments.

Product Perspective

• Minimal product overlap between Splunk and Cisco enables quick integration and delivery of customer value.
• Splunk’s security and observability offerings are strengthened by Cisco’s capabilities.
• AI efforts are accelerated through the partnership.

Acronyms Simplified

• Explained XDR (Extended Detection and Response), SIEM (Security Information and Event Management), and SOAR (Security Orchestration, Automation, and Response) and how they fit together.

Competitive Positioning

• Splunk is foundational in the security operations center and is sold to the Chief Information Security Officer (CISO).
• Splunk is critical for regulatory compliance, such as the SEC’s 4-day breach reporting requirement.
• Full-fidelity ingestion at scale without sampling is a key differentiator, allowing Splunk to handle high-scale applications.

Deployment Options

• Splunk meets customers where they are in their cloud journey, supporting on-premise, cloud, and hybrid environments.
• Federated search enables access to third-party data sources without centralizing data.

Pricing

• Workload-based pricing ties Splunk’s pricing model directly to the value delivered.
• Transition from ingest-based pricing to workload-based pricing is ongoing.

AI Vision

• Leveraging Cisco’s datasets will drive better outcomes in security and observability.
• Focused on domain-specific AI outcomes and human-in-the-loop philosophy.

Competitive Environment

• Pricing model changes address customer concerns about ingest-based pricing.
• Federated and distributed model provides cost control and strategic data placement options.
• Edge processing capabilities preprocess data, reducing storage costs.

Enhancing Splunk Portfolio

• Data integration with Cisco is underway, with incremental enhancements to be announced.
• Initial focus is on enhancing existing product lines, with potential for new products over time.

Data Privacy

• Splunk respects customer data privacy and only uses data with explicit customer permission.

Integrating AppDynamics

• AppDynamics brings best-in-class traditional application monitoring to Splunk.
• Integration will involve placing AppDynamics on the Splunk platform, integrating log data.

Growth Opportunities

• Short-term focus is on demonstrating value through incremental deliveries.
• Long-term vision includes innovation and new capabilities, driving consistent and durable growth.

Gary’s statements highlighted the strategic alignment and synergies between Splunk and Cisco, emphasizing the value of the partnership for customers and the future growth prospects.