It was recently revealed that Symantec was considering an acquisition of Splunk, which would have cost at least US$9.5 billion based on Splunk’s current market value. Splunk’s share price has risen almost 16% since the start of August and did not pull back when Symantec walked away

The following information does not take into account your personal objectives, financial situation or needs. You should consider if the relevant investment is appropriate having regard to your own objectives, financial situation and needs.

 

Data security is driving corporate interest

Splunk was founded in 2003 to essentially gather data from multiple sources (such as websites, servers, networks, applications and mobile devices) within an organisation and allow the organisation to efficiently store, search and analyse the data when required. It sounds relatively pedestrian now but 14 years ago, no such technology existed to gather all the data in one central place. Splunk was one of the first companies to do this, which allowed it to raise up US$50 million in venture capital before it listed in 2012.

As Splunk began to process more and more data for its clients, it gradually realised that an organisation’s IT security team place significant value on the data being held in one central repository. Splunk’s technology made the IT security’s team jobs easier in terms of forensics, incident investigations and fraud assessments through real time reporting.

As such, IT security teams have been large drivers of Splunk’s growth – user engagement for data gathering and analysis was high amongst IT security teams versus other parts of an organisation and Splunk capitalised on this.

Today, its security event and information management (SIEM) business generates US$350 million in sales or about 40% of Splunk’s overall sales, having averaged over 80% revenue growth per annum between 2014 and 2017.

 

At the time of writing, the AtlasTrend Big Data Big Fund own shares in Splunk. For the full article and find out why we think Splunk remains a strong strategic acquisition target for the larger data and IT security players, join AtlasTrend today. Sign up for a free 30 day trial. Cancel anytime.

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About Kevin Hua

Kevin Hua is a Co-Founder of AtlasTrend, an online investment platform that makes it easy for anyone to learn and invest in trends transforming our world. Kevin has over 19 years experience in financial markets including as Senior Portfolio Manager at Atrium Investment Management and Stark Investments.