Cisco’s head in ‘the cloud’ after $1.2-billion Meraki acquisition

NEW YORK—Cisco Systems Inc., the world’s largest maker of computer networking gear, is buying San Francisco-based Meraki Inc. for $1.2 billion.

Cisco pursued the privately-held company, which was founded in 2006 by members of MIT’s Laboratory for Computer Science, to expand its ability to let customers compute in the cloud.

Cloud computing refers to the increasingly popular practice of storing software applications in remote data centres that are accessed over the Internet instead of installing programs on individual machines.

Meraki Inc., which also has offices in New York, London and Mexico, developed technology that offers customers Wi-Fi, switching, security and mobile device management centrally managed from the cloud.

Meraki will form Cisco’s new Cloud Networking group, led by Meraki CEO Sanjit Biswas. The company said on its website it had originally planned to remain independent and go public, but joining Cisco will help it achieve its goal of hitting $1 billion in revenue a year.

Cisco, based in San Jose, Calif., expects the acquisition to close in its second fiscal quarter ending in January. The $1.2 billion purchase price includes cash and retention-based incentives.

The purchase follows its $125 million purchase last week of Cloupia, which develops software that helps data centre operators manage their resources.