Splunk's $SPLK valuations are now an issue. Read this prescient article posted on May 26 here. $SPLK, Splunk Inc. / H1 ...A few things worth noting. 1) Who acquires Splunk? Cisco decided to “pass” a year ago when the valuation was less $12 Billion. Today, its 50% higher. Only hardware vendors like Cisco or perhaps Dell would be interested since a Splunk deployment requires a LOT of hardware. A Cisco white paper indicates that a customer requires 14 beefy Cisco UCS servers to process 2 TB of data per day. If you speak with other customers, you quickly understand that this hardware specification is extremely low – as in, that deployment requires 10x more server hardware. 2) Business model: The business model is focused on the volume of data indexed and stored per day. In other words, it sure sounds like a great business model since everyone knows that more data is being used every day. The open source competition is not relevant since their per server performance is just as mediocre. In other words, you need to spend a lot of money on server hardware and professional services in both cases. Everyone tells the customer to simply buy more hardware to improve performance. That reply just doesn’t work in the medium of longer term. 3) Customers: They just aren’t as happy as the marketing suggests. A) Networks have problems. Engineers spend many hours, and often days, looking for the source of the problems. They are very reactive rather than proactive. The software and user interface is not nearly as easy to use as the marketing material will tell you. In addition, training someone to use Splunk costs a lot of money, and those people leave shortly after being trained in order to capitalize on their credentials. B) Find and speak with the Directors of data centers. Once a company signs onto Splunk, they know the cost will be very high, and they have tied their careers to that choice. No one wants to admit a mistake. However, they are looking for anything that can make that deployment less expensive and more efficient - even as they appear to be buying more since there doesn’t seem to be a clear alternative. Summary: The valuation has clearly become an issue as top line growth is showing signs of rolling over. In addition, there also appears to be lot of tension and concern among customers. It would be extremely valuable to speak with them.From User Trumpington...Sell Splunk. Don't chase the dip. This is not a value play.