Cisco Continues Acquisition Spree with Meraki

We just reported that Cisco's quarterly results managed to beat Wall Street's expectations, directly supported by big bets on some fast growing Internet business trends.

 

They reported its net income increased 18% to $2.1 billion in its fiscal first quarter, which ended in October. They wasted no time in putting some of their profits to use as Cisco  is on the move again with the recent acquisition of Cloupia and now Meraki.

 

Cloupia is based in Santa Clara, Calif., and its solutions allow enterprises and service providers “to simplify the deployment and configuration of physical and virtual resources from a single management console.” Its infrastructure management software is said to enhance Cisco’s Unified Computing System and Nexus switching portfolio with a single “pane-of-glass” view into the automation of compute, network, storage, virtual machine and operating system resources.


With Meraki, a well known and rapidly growing vendor of technology for cloud based management of wireless LAN, security appliances, and mobile devices Cisco will spend $1.2 billion in cash and retention-based incentives.


The acquisition of Meraki, which is a privately-held company in San Francisco, 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, Cisco said in a statement.


Cisco is targeting Meraki's technology for secure, cloud managed networks at midmarket businesses around the world who want to manage their networks from the cloud.


Meraki was founded in 2006 by doctorate candidates from Massachusetts Institute of Technology. The three founders of the company plan to stay on as leaders of a new "Cloud Networking Group" within Cisco, to continue towards their goal of US$1 billion in annual revenue, Meraki CEO and co-founder Sanjit Biswas said in a letter to employees. 


The group will continue its development of new features, enhancements, and entirely new products without disruption, and will also work to "cloudify" other Cisco products.


Cisco approached Meraki with an acquisition offer a few weeks ago.  The initial reaction of the founders was to decline and continue with plans to take the company public, Biswas said. "After several weeks of consideration, we decided late last week that joining Cisco was the right path for Meraki, and will help us achieve our goal of having maximum impact," he added.


Besides offering an attractive price, Cisco offered Meraki's departments the opportunity to keep doing what they are doing, and preserve its culture and environment in the Cloud Networking Group set up in San Francisco, Biswas said.


Meraki this year grew revenue to $100 million, shipped another major product family, grew from 120 to 330 employees, and became cash-flow positive, he added.


The acquisition should close in the second quarter of Cisco's fiscal year 2013, subject to customary closing conditions, including regulatory review.

Enjoyed the article?

Sign-up for our free newsletter to kick off your day with the latest technology insights, or share the article with your friends and contacts on Facebook, Twitter or Google+ using the icons below.


E-mail address

Rate this blog entry:
0

Bill has been a member of the technology and publishing industries for more than 25 years and brings extensive expertise to the roles of CEO, CIO, and Executive Editor. Most recently, Bill was COO and Co-Founder of CIOZone.com and the parent company PSN Inc. Previously, Bill held the position of CTO of both Wiseads New Media and About.com.

Comments