Cisco says it will acquire cloud networking company Meraki for $1.2 billion in cash. Meraki focuses on mid-market customers, offering networking solutions that can be centrally managed from the cloud. When the acquisition is complete, Meraki will form Cisco’s new cloud networking group, led by Meraki CEO Sanjit Biswas.
Cisco noted that the acquisition of Meraki complements and expands its strategy to offer more software-centric solutions to simplify network management, help customers empower mobile workforces and generate new revenue opportunities for partners. Last week Cisco unveiled a new Wi-Fi location platform meant to help businesses monetize their Wi-Fi networks by making real-time offers to customers. Meraki’s expertise in cloud-controlled Wi-Fi will complement this offering.
Cloud networking and device and security services have been identified by Cisco as solutions for customers’ networking and business enablement challenges as the IT industry transforms in the mobile-cloud era. With Meraki, Cisco aims to expand its network offerings by providing scalable solutions for midmarket businesses. The company said the acquisition will also strengthen it’s unified access platform.
Headquartered in San Francisco, Meraki was formed in 2006 by PhD candidates from the Massachusetts Institute of Technology and was funded by Sequoia Capital and Google. Meraki offers a cloud managed product family including wireless local area networks, Ethernet switches, security appliances and mobile device management, adding the benefits of the cloud to edge and branch networks.
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During the third quarter, Meraki said it captured more than 3,000 new customers in more than 60 countries. The company was planning an initial public offering when Cisco made the founders an offer they couldn’t refuse.
Rob Soderbery, SVP of Cisco Enterprise Networking Group, noted the acquisition of Meraki enables Cisco to make simple, secure, cloud managed networks available to its global customer base of mid-sized businesses and enterprises. These businesses often have the same IT needs as larger organizations, but lack the resources to integrate complex IT solutions.
Under the terms of the agreement, Cisco will pay approximately $1.2 billion in cash and retention-based incentives to acquire the entire business and operations of Meraki. The acquisition is expected to close in the second quarter of Cisco’s fiscal year 2013, subject to customary closing conditions, including regulatory review.
Last week, Cisco announced its intent to acquire Cloupia to extends Cisco’s data center portfolio with software that enables management of converged infrastructure solutions. The Santa Clara, Calif.-based software company automates converged data center infrastructure – allowing enterprises and service providers to simplify the deployment and configuration of physical and virtual resources from a single management console.