Cisco to Acquire Cloud Networking Firm Meraki for $1.2 Billion

Cisco on Monday announced its plans to spend $1.2 billion to acquire Meraki Inc., a privately held cloud networking technology vendor that caters to midmarket customers with easy-to-deploy and manage networking gear.

San Francisco-based Meraki sells on-premise networking hardware including Wi-Fi routers, switches, and security and mobile device management solutions that can be centrally managed from the cloud. The company’s solutions help support BYOD, guest networking, application control, WAN optimization, application firewall and other advanced networking services.

Much of Meraki’s networking hardware offers out-of-the-box security, including the ability to segment wireless users, applications, and devices, a built-in stateful policy firewall, 802.1X/RADIUS support, and native Active Directory integration deliver fine-grained access control. They also offer built-in features like Network Access Control (NAC) and Air Marshal, a real-time scanning intrusion prevention system (WIPS).

The acquisition of Meraki complements and expands Cisco’s strategy to offer more software-centric solutions to simplify network management and will strengthen Cisco’s Unified Access platform, Cisco said.

“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’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 was founded by members of MIT’s Laboratory for Computer Science.

Under the terms of the agreement, Cisco said it will pay approximately $1.2 billion in cash and retention-based incentives. Subject to customary closing conditions, the acquisition is expected to close in the second quarter of Cisco’s fiscal year 2013.