Splunk is shelling out more than $1 billion in cash and stock to acquire SignalFx, a provider of real-time monitoring and observability for cloud infrastructure and microservices.

Spunk said upon closing the deal, which is expected in the second half of this year, it will be a leader in observability and application performance monitoring (APM) for organizations at every stage of their cloud journey, from cloud-native applications to on-premises applications.

This will help customers deliver cost savings, increased revenue and an improved customer experience, it said.

Splunk’s Rick Fitz

Rick Fitz, Splunk‘s senior vice president and general manager of IT markets, tells us until the acquisition closes, Splunk and SignalFx will continue to operate as separate companies.

“Partners should continue to work with their existing company contacts,” he said. “We will share more with partners once the acquisition closes. Our collective goal is to maintain business continuity for our customers and partners, and to determine how best to accelerate the momentum of both companies.”

The combination of Splunk and SignalFx will give IT and developers a data platform that allows them to monitor and observe data in real time, no matter the infrastructure or data volume. This enables organizations to work across their entire data landscape, not just silos in the data center or cloud-native environments.

“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 Doug Merritt, Splunk’s president and CEO. “SignalFx will support our continued commitment to giving customers one platform that can monitor the entire enterprise application life cycle. We are also incredibly impressed by the SignalFx team and leadership, whose expertise and professionalism are a strong addition to the Splunk family.”

“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 Karthik Rau, SignalFx’s founder and CEO. “As the world continues to move toward 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. The SignalFx team is thrilled to join Splunk to help CIOs capitalize upon the modern application portfolio.”

Splunk also announced its second-quarter earnings, including $350 million in software revenue, up 46% year-over-year, and $517 million in total revenue, up 33% year-over-year.