Cisco Into Cloud Networking

DFN: Seems like a logical extension for Cisco.

Cisco to buy cloud networking company Meraki in $1.2B deal
Silicon Valley / San Jose Business Journal by Cromwell Schubarth, Senior Technology Reporter
Date: Monday, November 19, 2012, 3:50am PST – Last Modified: Monday, November 19, 2012, 6:13am PST

Cisco Systems will pay $1.2 billion to buy cloud networking company Meraki, led by CEO Sanjit Biswas.

Cisco Systems Inc. is beefing up its dominant networking equipment market lead by buying Meraki Inc. for about $1.2B.
Cisco said in a release that the cloud-based networking company will operate as a new cloud networking unit. It is one of the few hardware companies based in San Francisco.
Its Wi-Fi routers are used to control access to networks by large numbers of devices through a single dashboard, a growing need in the face of the trend in which employees are bringing their own tablets, smartphones and laptops to work.
CEO Sanjit Biswas said in a letter to employees that Cisco’s agreement to let the company remain in the city was a major factor in the sale. The company began in Mountain View to be near early investor Google Inc., but Biswas told the San Francisco Business Times in a profile (subscription required) that it moved to San Francisco because so many of the engineers wanted to live in the city.
News of the deal leaked out via Twitter and Google Alerts Sunday, Biswas said, so the deal was unveiled Sunday instead of on Monday as had been planned.
Meraki was founded founded in 2006 by Biswas, Chief Technology Officer John Bicket and Hans Robertson, grad students from the Massachusetts Institute of Technology. It raised about $80 million in four venture rounds, with Sequoia Capital and Google as its biggest backers. “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,” Biswas wrote. “As founders, all three of us plan to stay on as leaders of the business unit and look forward to continue towards our goal of $1B in annual revenue.” Meraki aims its networking tools at midsize companies and is being used on 18,000 networks around the world, including by Design Within Reach, Motel 6, Stanford University, British Telecom, Burger King and Starbucks in Mexico.
Biswas said that in 2012 the company “successfully shipped another major product family, achieved a $100M bookings run rate, grew from 120 to 330 employees and did it all while achieving positive cash flow.”
The price includes cash and “retention-based incentives” according to a release, and is expected to close in the second quarter.
Meraki was profiled in the current issue of the San Francisco Business Times (subscription required to read the full article).

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