Cisco Acquires Meraki For $1.2 Billion In Cash

Cisco will be acquiring San Francisco-based Meraki Inc. Meraki, a 330 employee startup, provides customers with cloud-based software for managing networking solutions such as Wi-Fi, security devices and mobile devices. Meraki’s acquisition enables Cisco to expand its market penetration in the midmarket segment with respect to cloud-based management of networking as well as security and mobile devices. The acquisition empowers Cisco to offer its midmarket customers the cloud-based networking management infrastructure they require even though those same customers lack the resources to implement more complex networking management solutions.

The move is widely regarded by analysts as an acquisition not only of cloud-based networking software, but also of cloud-based infrastructure management software more generally. Gartner’s Mark Fabbi, for example, remarked:

It’s pretty clear Cisco bought Meraki because of their ability to manage cloud infrastructure and Meraki has proven that the model works and is robust. I would expect that it will become the platform for Cisco to offer different delivery and management models to a much broader product and customer set.

Meraki will become of the “Cloud Networking Group” at Cisco, which strongly suggests a grander vision for its future than cloud-based Wi-FI management alone. Cisco will acquire Meraki for $1.2 billion in cash and employee-retention incentives. The acquisition is expected to close in the second quarter of 2013.

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