Needham says Splunk will not solve growth challenges at Cisco

Needham says Cisco’s (CSCO) acquisition of Splunk (SPLK) will not solve its growth challenges. The acquisition will generate synergies with App Dynamics and with Cisco’s network telemetry data analytics, but Cisco has a poor track record on realizing acquisition synergies, the analyst tells investors in a research note. Cisco’s Security business, despite numerous acquisitions, is still mainly not cloud-native or micro-services-based, and Cisco is losing share in Security, says Needham. The firm thinks Splunk’s growth will decelerate over the next several years. It sees the deal as a merger of two legacy players in a category where new competition is emerging from strong platform security names. Needham keeps a Hold rating on Cisco.