Splunk acquires cloud-monitoring company SignalFx for $1.05B

Splunk is boosting its cloud monitoring capabilities with its deal to buy SignalFx. (Pixabay)

Data processing and analytics vendor Splunk announced it's buying cloud monitoring company SignalFx for about $1.05 billion. Splunk will pay about 60% of the total in cash and the rest in common stock in a deal that is expected to close in the second half of fiscal 2020 once the customary closing conditions are met.

Privately-held SignalFX provides real-time monitoring and metrics for cloud, microservices, and applications. SignalFx, which came out of stealth mode four years ago, had raised a total of $178.5 million in funding, according to Crunchbase. According to its website, SignalFx's customers include NBCUniversal, Yelp, Kayak, and Shutterfly.

By combining the capabilities of both companies, Splunk said it intends to provide developers and IT leaders a data platform that can monitor and observe data in real time regardless of the infrastructure or data volume. In its press release, Splunk said the deal would enable it become a leader in "observability and APM for organizations at every stage of their cloud journey, from cloud-native apps to homegrown on-premises applications."

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Splunk, which is publicly traded, also said the deal will give it a larger presence in the cloud space for enterprises that are migrating to cloud-native technologies such as microservices and containers, and orchestrated environments like Kubernetes and Docker.

“Data fuels the modern business, and the acquisition of SignalFx squarely puts Splunk in position as a leader in monitoring and observability at massive scale,” said Splunk President and CEO Doug Merritt, in a statement. “SignalFx will support our continued commitment to giving customers one platform that can monitor the entire enterprise application lifecycle. We are also incredibly impressed by the SignalFx team and leadership, whose expertise and professionalism are a strong addition to the Splunk family.”

In its press release, Splunk cited research from Gartner that said more than 75% of global organization would be running containerized applications in production by 2022, compared to fewer than 30% that are doing so today.

“By joining Splunk, we will create a powerful monitoring platform - one ready to support CIOs whether they have fully embraced cloud or have existing applications in the data center,” said SignalFx Founder and CEO Karthik Rau, in a statement. “As the world continues to move towards complex, cloud-first architectures, Splunk and SignalFx is the new approach needed to monitor and observe cloud-native infrastructure and applications in real time, whether via logs, metrics or tracing."