Cisco to acquire Meraki for $1.2bn

Payday for Google as Cisco establishes cloud networks division

Cisco has acquired cloud rival Meraki.

Meraki attracted much attention in around 2006, thanks to Google investing in the then-startup and its products that made it possible to dole out a few megabytes of free WiFi from its access points. That functionality was popular among early adopters who liked the idea of free WiFi and were willing to share their own connections with passing strangers.

Google stumped up some cash to make that happen, as in pre-iPhone 2006 it made sense to make it as easy as possible to get online.

Meraki has since added many other enterprise networking products and now offers switches, security appliances and WiFi kit, all managed through a web-based interface and some cloudy goodness said to make network admins' lives simpler and happier.

Tech Crunch reports Cisco will pay $US1.2bn, all in cash, to get its hands on the company.

Meraki has posted an FAQ about the transaction, including a letter from CEO Sanjit Biswas in which he says Cisco wants the company to become "a new 'Cloud Networking Group'," and that he and other Meraki founders intend to stay aboard and plan to turn the group into a billion-a-year concern.

Biswas also reveals that Cisco decided to strike before Meraki could go public. Meraki did not immediately accept the offer, instead pausing to consider if it was the best path to take for its technologies and people.

The company decided it was after being assured Cisco would "like to see us continue to release new features and products in the years ahead, and hopefully 'cloudify' other Cisco products." The networking giant also promised Meraki's "highly integrated and customer experience focused" modus operandi would be preserved after an acquisition.

Cisco's Romanski confirmed the intended acquisition in a saccharine blog post that proclaimed "Meraki built a unique cloud-based business from the ground up that addresses the broader networking shift towards cloud" and added the deal represents "another example of Cisco’s focus on accelerating our adoption of software based business models."

The acquisition is Cisco's second cloudy purchase inside a week: last Friday it hoovered up Cloupia, a maker of cloud management software. CEO John Chambers also recently said the company will soon make small telephony cells, in part to help its WiFi business. ®