Cisco to acquire Wi-Fi vendor Meraki for $1.2 billion

The acquisition is designed to accelerate Cisco's evolution toward software-centric solutions while expanding its Cloud-based network offerings to new markets

Cisco to acquire Wi-Fi vendor Meraki for $1.2 billion

Cisco has announced its intent to acquire privately held Wi-Fi manufacturer Meraki Inc., a leader in cloud networking. Headquartered in San Francisco, California, USA, with offices in New York, London and Mexico, Meraki offers midmarket customers easy-to-deploy on-premise networking solutions that can be centrally managed from the cloud.

Meraki technology offers customers Wi-Fi, switching, security and mobile device management centrally managed from the Cloud. Meraki’s solutions support BYOD, guest networking, application control, WAN optimization, application firewall and other advanced networking services.

Cisco said that as the IT industry transforms in the mobile-cloud era, it is solving customers’ networking and business enablement challenges by delivering cloud networking and device and security services. The acquisition of Meraki complements and expands Cisco’s strategy to offer more software-centric solutions to simplify network management, help customers empower mobile workforces, and generate new revenue opportunities for partners.

Meraki’s cloud networking solutions will expand Cisco’s network offerings by providing scalable solutions for midmarket businesses. The Meraki acquisition will also strengthen Cisco’s Unified Access platform, which makes IT more responsive to business innovation by simplifying IT operations and uniting wired and wireless networks, policy and management into one integrated network infrastructure, unlike other competitive offerings. 

‘The acquisition of Meraki enables Cisco to make simple, secure, cloud managed networks available to our global customer base of mid-sized businesses and enterprises. These companies have the same IT needs as larger organizations, but without the resources to integrate complex IT solutions,’ said Rob Soderbery, senior vice president, Cisco Enterprise Networking Group. 

Meraki was founded by members of MIT’s Laboratory for Computer Science. It combines a high-velocity software development methodology with a tightly linked inside sales and channel model that will form the new Cloud Networking Group.

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.

Comment

Mark Pearce, strategic alliance director of EMEA at Wi-Fi solutions provider Enterasys Networks, commented: ‘Cisco has been extremely busy on the acquisition trail recently and it certainly has the cash reserves, but simply acquiring technology does not guarantee future success.  

‘One of the major issues following any acquisition is the effective integration of the acquired company and its personnel into the purchasing company’s R&D and general business processes. With the Meraki acquisition there is absolutely some significant product overlap and it will be interesting to see how Cisco manages this, especially with the added disruption following four other recent acquisitions.’  

Pearce continued: ‘It will also be intriguing to see how this impacts existing Meraki customers, specifically from a customer support perspective. Meraki has a similarity with my own company Enterasys, in that it prides itself on its customer support and satisfaction, its ability to respond quickly to virtually any type of request, this is in stark contrast to the way Cisco works. 

‘Being such a behemoth of a company leads to a very laborious and process driven response mechanism to customer feature requests and resolution to problems, the complete opposite to what Meraki customers experience.  

‘For Cisco this is obviously one step closer to providing cloud managed services, no doubt there will be others, it’s unlikely that the Meraki and Cisco WLAN solutions will both remain intact, but I guess only time will tell,’ said Pearce.

Written by Wireless magazine
Wireless magazine

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