(By Balaseshan) Cisco Systems Inc. (NASDAQ: CSCO) is strengthening its cloud-based network offerings with its intent to buy privately-held Meraki Inc. for about $1.2 billion in cash and retention-based incentives.
Meraki's cloud networking solutions will expand Cisco's network offerings by providing scalable solutions for midmarket businesses. Meraki was founded by members of MIT's Laboratory for Computer Science.
The Meraki acquisition will also strengthen Cisco's Unified Access platform, which makes IT more responsive to business innovation by simplifying IT operations and uniting wired and wireless networks, policy and management into one integrated network infrastructure, unlike other competitive offerings.
[Related -EMC Corporation (EMC): Are You Ready For The Next Internet Boom?]
Headquartered in San Francisco, California, with offices in New York, London and Mexico, Meraki offers midmarket customers easy-to-deploy on-premise networking solutions that can be centrally managed from the cloud.
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. Meraki combines a high-velocity software development methodology with a tightly linked inside sales and channel model that will form the new Cloud Networking Group.
The acquisition of Meraki complements and expands Cisco's strategy to offer more software-centric solutions to simplify network management, help customers empower mobile workforces, and generate new revenue opportunities for partners.
[Related -Cisco Systems, Inc. (CSCO) Q1 FY 2014 Earnings Preview: November Quarter Rewards, Except When…]
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 optimization, application firewall and other advanced networking services.
The acquisition is expected to close in the second quarter of Cisco's fiscal 2013.
CSCO closed Friday's regular session at $17.99. The stock has been trading between $14.96 and $21.30 for the past 52 weeks.