Cisco to take over Meraki in a $1.2bn cloud computing push

NETWORKING equipment firm Cisco has bought San Francisco-based cloud management company Meraki for $1.2bn (£755m), in a deal that boosts the tech giant’s position in the cloud computing sector.

The acquisition, announced early yesterday morning, is one of the biggest in the rapidly-expanding area. Meraki’s network technology allows companies to monitor and manage WiFi networks via a web browser rather than via installed computer software.

Cloud-based businesses are seen as one of the major growth areas in IT in the next few years. Since cloud computing and storage is done remotely over the internet, rather than on a company’s servers, there is a greater flexibility for staff in terms of where they work from, and for businesses in terms of how much storage or computing power they need.

Cisco said the acquisition is expected to close by February, and that it is subject to regulatory approval. “The acquisition of Meraki enables Cisco to make simple, secure, cloud-managed networks available to our global customer base of midsized businesses and enterprises,” said Rob Soderbery, senior vice president of Cisco Enterprise Networking Group.

“These companies have the same IT needs as larger organisations, but without the resources to integrate complex IT solutions.”

Meraki – which was founded in 2006 by postgraduates at the Massachusetts Institute of Technology – has backers including Google and a host of venture capital firms.

Cisco’s shares rose around 1.5 per cent yesterday on the news. “This is a very logical move for Cisco,” said Zeus Kerravala of tech analysts ZK research, who added that the deal will enable Cisco to outflank its competitors in the small-to-medium-sized cloud computing space.

Cisco, formed in 1984, is looking to expand into cloud services as it faces increased competition in its networking equipment business from the likes of China’s Huawei.