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Cisco’s march to the cloud continues. It has announced it will acquire privately held US cloud company Meraki for US$1.2 billion. It will also acquire Cloupia, another cloud vendor, for US$125 million.

Meraki is a cloud networking specialist based in San Francisco. It offers midmarket customers cloud networking services. Cisco says the acquisition will strengthen its Unified Access platform. It also says Cloupia's infrastructure management software will simplify management of its Unified Computing System (UCS) and Nexus switching products with a single view of compute, network, storage and operating system resources.

“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,” said Rob Soderbery, senior vice president of Cisco’s Enterprise Networking Group.

“The acquisition of Meraki complements and expands our strategy to offer more software-centric solutions to simplify network management, help customers empower mobile workforces, and generate new revenue opportunities for partners. 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 organisations, but without the resources to integrate complex IT solutions. Meraki’s solution was built from the ground up optimised for cloud, with tremendous scale, and is already in use by thousands of customers to manage hundreds of thousands of devices.”

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 optimisation, application firewall and other networking services.

Meraki was founded by members of MIT’s Laboratory for Computer Science. It claims to combine a “high-velocity software development methodology with a tightly linked inside sales and channel model” that will form Cisco’s new Cloud Networking Group.

Under the terms of the agreement, Cisco will pay approximately US$1.2 billion in cash and “retention-based incentives” to acquire the entire business and operations of Meraki. The acquisition is expected to close in the second quarter of Cisco’s fiscal year 2013, subject to regulatory review. The acquisition of Cloupia, which is also based in California, is expected to be finalised at the same time.

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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire and editor of sister publication CommsWire. He is also founder and Research Director of Connection Research, a market research and analysis firm specialising in the convergence of sustainable, digital and environmental technologies. He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.

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