The High Cost of Splunk: Log Management and SIEM Tool Expenses

Splunk, a popular log management and SIEM tool, can become quite expensive as you add more data or enable new features. Ingesting all your data should be achievable without breaking the bank or leaving your organization vulnerable to cybercrime. Just like purchasing a car, essential components like tires, a steering wheel, and side mirrors shouldn't be unaffordable.

Splunk's Cloud Operation Financials: Unimpressive Margins

When Splunk started reporting its cloud operation financials in 2020, it revealed disappointing results. The company's margins averaged only 54%, leaving investors unimpressed. In comparison, the cloud operating margins of competitors like Elastic, DataDog, and Sumo Logic are significantly higher. Splunk's margins of 75% are not considered strong, especially when revenue is distributed to other cloud vendors like AWS and Azure.

The Real Challenge: Who Pays for the Extra Fees?

Instead of focusing on improving internal operations, Splunk acquires companies to enhance its feature sets and appear as a technical innovator. However, this strategy causes customers to bear the burden of extra fees. In the most recent Q4, Splunk's proportion of R&D expenses to total revenues dropped to 28%, as opposed to 44% in Q1. Although Splunk aims to report 80%+ ARR growth through acquisitions, its GAAP cloud revenue growth in Q4 was only 72%, a significant decline from 81% in Q1.

Splunk's Strategy: Acquisitions over Internal Improvement

Splunk's approach to acquisitions, rather than improving internal operations, has consequences. All SIEM vendors horizontally shift the data load by adding more expensive resources to combat outdated architectures that cannot scale on a single instance. This process, known as horizontal scaling, results in what's known as the SIEM and Cloud Tax.

The SIEM and Cloud Tax: A Heavy Burden

This tax is an additional cost that customers must bear, but it can be eliminated. LogZilla, a Manager of Managers solution, can be deployed in front of your existing SIEM log tool to reduce the volume of machine data sent downstream by about 70% without losing any data. By doing so, the SIEM and Cloud Tax is permanently removed.

Removing Taxes and Fees with LogZilla

At a 50% deduplication rate, Splunk could increase its cloud operating margins to the 75%-80% range, comparable to its primary competitors, and eliminate the ingestion tax. With 70% deduplication, Splunk's cloud margins could increase by about 32%, resulting in lower prices for customers.

LogZilla's Unlimited Pricing Plan: A Better Alternative

LogZilla's Unlimited Pricing Plan offers 10 TB/day on a single 1U server, ensuring that you can send all your machine data, not just the data you can afford. This plan eliminates the SIEM tax for good, leading to a higher ROI and faster payback for your organization.

Achieving Significant ROI with LogZilla

By using LogZilla, your organization can generate an ROI of greater than 40% and achieve payback in less than 90 days. The more data you send per day, the higher the ROI, and the faster the payback.

Schedule a LogZilla Demo Today

Ready to see if LogZilla is the right fit for your organization? Schedule your 15-minute demo now and witness how LogZilla  can revolutionize your log management experience.

Real-World Use Cases:

  1. Banking: Enhanced security and compliance by deploying LogZilla as a Manager of Managers.
  2. Federal Government: Streamlined log analysis and reduced infrastructure costs with LogZilla.
  3. Healthcare: Strengthened cybersecurity and protected sensitive patient data using LogZilla.
  4. Retail: Optimized log management and accelerated threat detection with LogZilla.

April 13, 2021

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