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November 20, 2012

Cisco to Buy Meraki for $1.2B

Cisco Systems has announced its intent to purchase Meraki for about $1.2 billion, in a bid to boost its cloud computing services.

Cisco is to pay $1.2 billion in cash and retention-based incentives in the second quarter of 2013 to purchase the privately-owned company, founded in 2006 by members of MIT’s Laboratory for Computer Science. The acquisition is subject to regulatory review.

Meraki is known for serving mid-sized companies that cannot afford to run their own networking and security services.

The acquisition of Meraki will expand Cisco’s cloud networking offerings, allowing networks to be powered through the Internet.

“As the IT industry transforms in the mobile-cloud era, Cisco is solving customers’ networking and business enablement challenges by delivering cloud networking and device and security services,” a company statement reads.

“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.”

The purchase will also strengthen Cisco’s Unified Access platform, the statement says, which, in turn, will simplify IT operations by uniting wired and wireless networks, policy and management into one integrated network infrastructure.

“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,” says Rob Soderbery, senior vice-president, Cisco Enterprise Networking Group.

“These companies have the same IT needs as larger organizations, but without the resources to integrate complex IT solutions. Meraki’s solution was built from the ground up optimized for cloud, with tremendous scale, and is already in use by thousands of customers to manage hundreds of thousands of devices.”

Headquartered in San Francisco, Calif., with offices in New York, London and Mexico, Meraki technology offers customers Wi-Fi, switching, security and mobile device management centrally managed from the cloud. Meraki solutions support BYOD, guest networking, application control, WAN optimization, application firewall and other advanced networking services.

Cisco has announced eight acquisitions since February, the most recent being a $130-million deal last week for Cloupia, a provider of cloud services technology.