Splunk On-Prem to Cloud Migration — Migration Advisory & Implementation
Cisco is actively accelerating Splunk's transition from on-premises perpetual licenses to cloud subscriptions, a shift that is 'creating a drag on revenue growth' expected to 'continue in the second half of fiscal year 2026.' This migration affects a substantial installed base — Splunk added 500 new logos in H1 FY26 alone and is on track for 1,000 for the year. The cloud transition requires migration planning, data architecture redesign, security reconfiguration, and operational model changes for each customer. Professional services firms can capture both advisory work (helping Cisco plan the transition) and implementation work (helping Cisco's enterprise customers migrate their Splunk deployments to cloud).
CEO and CFO both explicitly discussed the Splunk on-prem to cloud transition as a major ongoing initiative. It was raised in multiple analyst questions. Revenue headwind confirmed for H2 FY26, indicating the transition is accelerating. 500 new logos in H1 with 1,000 target for the year.
Cloud migrations are a core professional services engagement. Splunk's large enterprise customer base will need migration support. However, Splunk has its own professional services and partner ecosystem, so competition for this work is moderate.
Important for Cisco's recurring revenue trajectory and ARR growth (currently $31B, only 3% growth). Successfully accelerating this transition is strategically critical but it's a defined migration program, not a multi-decade transformation.
Revenue headwind explicitly expected to continue through H2 FY26, implying urgency to accelerate migrations. Patterson noted software growth should improve in FY27, meaning this needs to be substantially completed or well underway.
No specific migration budget mentioned, but the strategic commitment is clear — Cisco described it as a positive transition despite revenue headwinds. Cloud subscriptions 'enable greater adoption, expansion and faster delivery of innovation.' Implicit willingness to invest.
Cloud migration advisory and implementation is a core offering for every major professional services firm. Splunk-specific expertise (SIEM, observability, security operations) adds specialization value.
Migration program across the Splunk installed base could be $5M-$15M for a lead SI partner. Individual customer migrations are smaller ($200K-$1M) but aggregated across the base, this is a meaningful program.
Charles Robbins
Decision Maker
Mark Patterson
Budget Holder
Splunk cloud transition is actively creating revenue headwinds through H2 FY26. Patterson indicated software growth should improve in FY27, creating a deadline for meaningful migration progress. 500 new logos in H1 and growing installed base amplify the migration backlog. Every quarter of delay extends the revenue drag.
Transcript evidence: 'continued acceleration to cloud subscriptions and fewer on-premise deals. While this shift is creating a drag on revenue growth, which we expect to continue in the second half of fiscal year 2026.' Patterson: 'as you get into FY27, we think that software growth will improve as well.' Splunk '500 new logos for the first half of fiscal year 2026 and is on track to add 1,000 new logos for the year.' Total subscription revenue was $7.8B (51% of total revenue), and total ARR of $31B growing only 3% — accelerating cloud migrations is critical to improving these metrics.
$5M - $15M
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Sector: Technology | Industry: Communication Equipment | Employees: 86200 | Price: $77.65 Cisco Systems, Inc. designs, develops, and sells technologies that help to power, secure, and draw insights from the internet in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and China. The company offers data center switching; network security, identity and access management, and secure access service edge; threat intelligence, detection, and response solutions; interconnects pub...
**Operator:** Welcome to Cisco's Second Quarter Fiscal Year 2026 Financial Results Conference Call. At the request of Cisco, today's conference is being recorded. If you have any objections, you may disconnect. Now I would like to introduce Sami Badri, Head of Investor Relations. Sir, you may begin. **Ahmed Sami Badri:** Good afternoon, everyone. This is Sami Badri, Cisco's Head of Investor Relations. I'm joined by Chuck Robbins, our Chair and CEO; and Mark Patterson, our CFO. Cisco's earnings ...
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