AI drives a wave of consolidation in the cyber security market with a trio of landmark transactions

With Cisco’s recent acquisition of Splunk (completed on 18 March 2024), Palo Alto’s acquisition of IBM’s QRadar assets (announced on 15 May 2024) and the merger of LogRhythm and Exabeam (also announced on 15 May 2024), Joe Austin, Director and lead of Arrowpoint Advisory’s Cyber Security practice, considers these three landmark deals that signal growing consolidation in the cyber security market, accelerated by the adoption of AI.

This current wave of consolidation is being driven by a growing and complex cyber security landscape. Digital transformation, cloud adoption and the prevalence of AI have created more attack surfaces and more sophisticated threats than ever before.

Customers are now demanding one-stop shop platforms that provide a single, comprehensive solution to their cyber security needs. For many customers, this is a response to finding themselves with muddled suite of individual cyber security software tools taken on over time as cyber threats have evolved and cyber security budgets have increased.

In response, cyber security product and service vendors are consolidating and integrating their technologies to offer more complete, end-to-end cyber security solutions. The ultimate aim is a unified SOC platform that combines SIEM, SOAR and XDR capabilities.

While some vendors are pursuing this aim organically, others are looking to inorganic M&A to quickly achieve immediate results, as shown by the trio of recent landmark transactions:

• Cisco’s acquisition of Splunk was designed with AI in mind – with Cisco hoping to benefit from increasing AI adoption through Splunk’s AI capabilities. As well as AI, security and observability were seen as key additional capabilities required to complete Cisco’s cyber security platform proposition.
• Palo Alto’s acquisition of IBM’s QRadar assets will see its next-generation SOC platform, Cortex XSIAM, beefed up by QRadar’s sophisticated threat detection capabilities to make a more complete unified solution. As expected, AI was a key topic and the transaction was part of a wider partnership between Palo Alto and IBM to deliver AI-powered security outcomes for clients.
• The merger of LogRhythm and Exabeam brought AI into the spotlight again. In this case, given the heritage of both companies in the SIEM market, the whole is considered more than the sum of its parts and complementary strengths will be leveraged to deliver more comprehensive, AI-driven security operations.

To discuss this article further and Arrowpoint Advisory’s work in the cyber security sector, please get in touch with Joe Austin using the details below.

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