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Cisco To Buy Meraki for $1.2 Billion

Acquisition accelerates Cisco’s evolution toward Software-Defined Networking and expands its cloud-based network offerings

Late Sunday Cisco said it’s going to buys Meraki, a privately held cloud networking start-up, for $1.2 billion in cash and retention-based incentives.

Seems social media upset the announcement plans, which were set for Monday morning, when there’ll still be a conference call.

The acquisition is supposed to accelerate Cisco’s evolution toward software- defined networking and expand its cloud-based network offerings to new markets.

The start-up, which raised $80 million from Google and Sequoia, was founded in 2006 by members of MIT’s Laboratory for Computer Science and combines a high-velocity software development methodology with a tightly linked inside sales and channel model that will form a new Cloud Networking Group at Cisco under Meraki CEO Sanjit Biswas.

Cisco approached Meraki a few weeks ago and it initially rejected the overture to pursue a planned IPO then decided a few days ago that it would hit a billion in annual revenues faster under Cisco’s wing. It’s currently got a $100 million bookings run rate, positive cash flow and 330 employees.

Meraki services the mid-market with on-premise networking solutions that can be centrally managed from the cloud. It’s also supposed to strengthen Cisco’s Unified Access platform.

Cisco Enterprise Networking Group senior vice-president Rob Soderbery said in a statement that mid-market “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.”

It offers Wi-Fi, switching, security and mobile device management centrally managed from the cloud and supports BYOD, guest networking, application control, WAN optimization and application firewalls.

The acquisition is expected to close by the end of January.

Meraki is headquartered in San Francisco – where it will stay – with offices in New York, London and Mexico.

Last week Cisco arranged to buy cloud automation house Cloupia for $125 million.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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