Cisco ponies up $1.2 billion to beef up BYOD credentials
Cisco (NASDAQ: CSCO) is paying $1.2 billion in cash and retention bonuses for Meraki, a cloud-based provider of mobile device management, mobile device security and Wi-Fi connectivity, to boost its BYOD credentials.
Meraki's products support BYOD, guest networking, application control, WAN optimization, application firewalls and other networking services.
"Meraki built a unique cloud-based business from the ground up that addresses the broader networking shift towards cloud, not just within wireless. Meraki created a massively scalable architecture that offers easy to deploy, secure, and manage networks," wrote Hilton Romanski, Cisco's vice president of corporate business development.
Romanski said that Meraki is supporting 20,000 customers and hundreds of thousands of devices on its cloud platform.
"The Meraki acquisition is another example of Cisco's focus on accelerating our adoption of software based business models. In fact, Cisco's last seven acquisitions (Cloupia, vCider, ThinkSmart, Virtuata, Truviso, ClearAccess and NDS) have all been software companies," he wrote.
The San Francisco-based firm was started in 2006 by members of MIT's Laboratory for Computer Science, as a municipal Wi-Fi company.
Admitting that social media had beaten the companies to the punch, Meraki Chief Executive Officer Sanjit Biswas told employees in a letter that the Cisco acquisition would be a positive development for employees.
Biswas explained that when the company was first approached by Cisco a few weeks ago, the initial reaction was to decline the offer and continue with plans to take the company public.
"It turns out the Cisco team also understood how important our team, culture and environment are to us, and came prepared as part of their offer ... 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 said.
Biswas said that he and the firm's two other founders, John Bicket and Hans Robertson, plan to stay on as leaders of Cisco's new Cloud Networking Group and work toward their goal of reaching $1 billion in annual revenue.
The acquisition is expected to close in the second quarter of Cisco's 2013 fiscal year, subject to closing conditions and regulatory review.