• Cisco is buying Splunk for $28bn
• Cato Networks raises $238m
• Broadcom faces rejection by Google

In today’s industry news roundup: Cisco is flexing its security muscle with the $28bn acquisition of cybersecurity and observability specialist Splunk; SASE specialist Cato Networks has raised $238m in what might be a pre-IPO round of funding; Broadcom faces the chop at Google unless it agrees a new price for its AI chips; and more!

Cisco is throwing its weight, and its wallet, behind its security services and applications strategy with the acquisition of Splunk for $157 per share in cash, which values the cybersecurity and observability specialist at $28bn. According to Cisco, the combination of the two companies will “help move organisations from threat detection and response to threat prediction and prevention.” Cisco’s CEO and chairman, Chuck Robbins, noted: “Our combined capabilities will drive the next generation of AI-enabled security and observability. From threat detection and response to threat prediction and prevention, we will help make organisations of all sizes more secure and resilient.” Gary Steele, Splunk’s president and CEO who will join Cisco’s executive leadership team, noted: “Together, we will form a global security and observability leader that harnesses the power of data and AI to deliver excellent customer outcomes and transform the industry. We’re thrilled to join forces with a long-time and trusted partner that shares our passion for innovation and world-class customer experience.” In its most recent financial quarter, which ended 31 July, Splunk’s revenues totalled almost $911m, up by 14% year on year, while its operating losses shrank to $68.5m from $190m a year earlier. Splunk’s share price was up by 21% to $144.66 in early Thursday trading on the Nasdaq. Read more. 

Sticking with the security and financial themes… Secure access service edge (SASE) specialist Cato Networks has raised $238m, taking its total funding to $773m and giving it a valuation of more than $3bn. The round was led by LightSpeed Venture Partners with the participation of Adams Street Partners, Softbank Vision Fund 2, Sixty Degree Capital, and Singtel Innov8. “This funding round reflects investor confidence in Cato’s leadership in the single-vendor SASE market,” noted Cato’s CEO and co-founder Shlomo Kramer. “Cato’s SASE platform uniquely enables organisations of all sizes to optimally secure their businesses without the cost, complexity, and risk of owning and maintaining a pile of point solutions.” The company will use the funds to ramp up its marketing efforts, expand the partner ecosystem that offers managed Cato SASE services, and grow the engineering and product team. The SASE sector has grown enormously in recent years and was worth $2bn during the second quarter of this year, according to research house Dell’Oro Group. With that fresh funding in the bank and an increasing valuation, it’s possible that Cato might be the next major technology IPO, according to this Futuriom report.  

Tough times for US-based chipmaker Broadcom… The Information has reported that Google executives have been in discussions over dropping Broadcom as a supplier of AI chips as early as 2027 in favour of designing its own chips. The move is being considered by the tech giant in a bid to save billions of dollars after it committed hefty investments to AI developments. According to the report, the company has tasked itself with moving away from using Broadcom as a supplier following a prolonged deadlock between the two parties over the price Broadcom was charging for its tensor processing units (TPUs).

And in further bad news for Broadcom… South Korea’s Fair Trade Commission has reportedly hit the US chipmaker with a fine of 19.1bn Korean won ($14.2m) for allegedly forcing Samsung to sign an unfair long-term supply contract. As per the regulator’s findings, in 2020 Broadcom demanded that Samsung sign a deal that forced the vendor to buy its telecom components for three years, abusing its market position and using unfair tactics, such as suspending its supply and technical support, according to the Korea Herald. It was also found that Samsung had been persuaded to purchase Broadcom’s radio frequency front end (RFFE), as well as components related to Wi-Fi and Bluetooth.

US private equity firm KKR (Kohlberg Kravis Roberts) and Italy’s Treasury are reportedly set to ask for more time to finalise a joint bid for Telecom Italia (TIM)’s fixed access and international networks division, NetCo. The current deadline for the offer is the end of September, but the pair are looking to extend the timeframe, according to a Reuters report. It added that the Italian minister of economy and finance, Giancarlo Giorgetti, intends to meet with the CEO of Vivendi, TIM’s biggest investor, to discuss the deal. The proposed delay of a few weeks is set to be reviewed by TIM’s directors at a meeting on 27 September. In August, the Italian government agreed to KKR’s bid to jointly take over NetCo’s assets with the Treasury for around €23bn ($24.5bn) – see What’s up with… Telecom Italia and KKR, Verizon, Huawei.

Telia has used the annual Global Goals Week, which drives awareness of the UN’s sustainable development goals (SDGs), to reiterate its conviction that data can ‘supercharge’ climate action. In a statement, the Swedish telco highlighted how its data insights and internet of things (IoT) solutions are already helping to minimise the environmental impact of the transportation sector which, on an industry-by-industry basis, contributed the second-largest share of carbon dioxide emissions globally in 2022. According to Telia, it supplies WSP, an urban and transport planning consultancy company, with movement data that is used to create “a more sustainable public transport system and, in turn, a better society”. Using its Crowd Insights data model, the operator provides anonymous and aggregated data from the mobile network to display movement patterns in society, which can be used to create new solutions. For example, it can allow city planners and environmental strategists to measure emissions from various modes of transport and prioritise the most effective actions for emission reductions. “I really hope telecom operators can play a larger role to help companies and societies become more sustainable. For this to happen, many different data sources are needed, and true insights only come when domain expertise is applied as well. Telcos could help facilitate and scale this,” said Kristofer Ågren, head of product for data insights and IoT at Telia. Learn more.

Qualcomm has entered a new business niche, launching what it dubs a 10G Fiber Gateway Platform with Wi-Fi technology, which pledges to unlock “a new era of home connectivity” and enable 10Gbit/s to and through the home. It claims the solution addresses a challenge in today’s broadband systems (where the access network from the service provider to the premises and Wi-Fi within the building are managed separately) by offering “a unified data flow management architecture, from cloud to device”. The company also announced that UK operator EE and US cable operator Charter Communications have sealed deals to use Qualcomm's new hardware in its broadband customer premises equipment (CPE), which will feature the next generation of Wi-Fi, the Wi-Fi 7.

The wearable device market has experienced a resurgence – at least that’s what the latest figures from two analyst companies suggest. IDC has estimated that global shipments of wearable devices in the second quarter of 2023 saw a year-on-year increase of 8.5%, to 116.3 million units. While Canalys has calculated that shipments of wearable bands (one segment of the total wearable devices market) totalled 44 million units globally, up 6% compared to the same period a year ago. “The wearables market is coming back to life, driven by increasing consumer demand in various aspects of daily life,” explained Jack Leathem, research author at Canalys, adding that the heightened demand has led to vendors being able to address specific customer needs. IDC explained in its report that the growth in wearable devices followed two quarters of decline, but that this came “at the expense of overall market value as average selling prices (ASPs) fell due to increased competition and discounting by retailers seeking to reduce excess inventory.” What is surprising is that while consumers typically think of popular brands produced by Apple, Samsung and Fitbit when it comes to wearables, growth is actually being driven by “numerous smaller companies that may not have the global aspirations [of] the market leaders, [and] instead focus on specific geographies, such as China and India, with fully featured devices that meet price expectations,” argued Ramon Llamas, research director with IDC’s wearables team. IDC is bullish about the market performance for 2023, and has forecast a 5.6% increase in shipments of wearables to 520 million units in the period. It highlighted hearables, such as headphones or earbuds, as the top category of wearable devices, followed by smartwatches.

- The staff, TelecomTV