Cisco Buys Meraki for $1.2 Billion
This move marks Cisco's ninth acquisition since February, and should strengthen Cisco's position in the WLAN mid-market.
Cisco announced that it is acquiring cloud networking company Meraki for $1.2 billion. Meraki is privately held and has investments from Google and Sequoia Partners. This move marks Cisco's ninth acquisition since February, and should strengthen Cisco's position in the WLAN mid-market.
I had first written about Meraki back in 2009, when I met CEO and Co-Founder Sanjit Biswas. In 2006, he and two of his classmates at MIT came up with the idea of a WLAN switch using a cloud-based controller rather than the traditional on-site controller. Since then, Meraki has rounded out its product line with cloud-managed security appliances and WAN acceleration. The most recent addition has been mobile device management (MDM).
Cisco continues to lead in the enterprise WLAN switch market, but was clearly interested in Meraki's cloud-based technology and mid-market focus. Meraki's business model involves selling WLAN access points and security appliances and then charging a fee for the ongoing management function.
The cloud-based controller provides the same type of air link optimization and coordination as a premises-based controller, as well as the ability to monitor and troubleshoot sites remotely. This approach is particularly attractive in the SMB segment because it greatly simplifies the solution and the ongoing management.
While it was only mentioned in passing during the investor call this morning, the MDM component could be an interesting addition to the Cisco product line. As WLANs are certainly one part of the mobile environment, Cisco has been touting its abilities to manage security as users increasingly move to bring-your-own-device (BYOD) initiatives. However, while Cisco can play a role in that with products like the Identity Service Engine, they have to partner with existing MDM suppliers to deliver a full solution. Those partners currently include AirWatch, Good Technologies, MobileIron, and Zenprise.
While Meraki is widely recognized in the WLAN space, the same cannot be said for their presence in the crowded and fast-growing market for MDM. It will be interesting to see if Cisco looks to capitalize on the fact that it is now in the MDM market, or merely focuses on Meraki's core WLAN and security appliance products.