Cisco nabs cloud-networking start-up Meraki for $1.2 billion

Looking to "cloudify" its software-focused products and simplify IT operations, the tech giant acquires the Wi-Fi and cloud-networking start-up.

Dara Kerr
Dara Kerr Former senior reporter
Dara Kerr was a senior reporter for CNET covering the on-demand economy and tech culture. She grew up in Colorado, went to school in New York City and can never remember how to pronounce gif.
2 min read

The three colleagues who created the cloud-networking and Wi-Fi startup Meraki at MIT's Laboratory for Computer Science six years ago were not expecting to be acquired by Cisco Systems. But the tech giant announced today its intent to buy the startup saying it plans to throw down $1.2 billion in cash, along with retention-based incentives.

"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," Cisco's Enterprise Networking Group senior vice president Rob Soderbery said in a statement. "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."

Meraki offers customers Wi-Fi, switching, security, and mobile device management that is centrally managed from the cloud. It is known for offering one of the biggest wireless mesh networks for regular hot spot users and for being the first that brought Wireless-N to the outdoors.

Cisco said that it wanted to acquire Meraki because the IT industry is increasingly moving toward the "mobile-cloud era." By adding Meraki's Wi-Fi and cloud-networking know-how to Cisco's software-focused offerings, the company believes that it will be able to simply IT operations for its customers. Cisco also pointed to the possible bonus of generating new revenue opportunities with its other partners.

The acquisition is scheduled to close in the second quarter of Cisco's fiscal year in 2013. According to TechCrunch, Meraki will continue to operate pretty much as it always has once the acquisition is complete.

"Cisco appreciates the way in which we develop innovative products: by focusing on our customers and quickly trying new ideas in both software and hardware," Meraki CEO Sanjit Biswas wrote in a letter to his employees about the acquisition, according to TechCrunch. "They'd like to see us continue to release new features and products in the years ahead, and hopefully 'cloudify' other Cisco products."