Cisco's Meraki Acquisition: Cloud-managed Mid-market Networking

Cisco Systems (NASDAQ: CSCO) is looking to dive even deeper into the cloud computing space with the acquisition of a networking competitor that builds solutions that are centrally-manageable from the cloud. Cisco made its intentions known to acquire San Francisco-based Meraki for approximately $1.2 billion.

Should the acquisition close, it won't be until close to the end of the second quarter of Cisco's 2013 fiscal year. The acquisition will be subject to typical customary closing conditions and regulatory review. Assuming it closes, Meraki will add new capabilities to Cisco's portfolio of networking solutions and services. Perhaps a Cisco executive put it best.

"The acquisition of Meraki enables Cisco to make simple, secure, cloud managed networks available to our global customer base of mid-sized businesses and enterprises. These companies have the same IT needs as larger organizations, but without the resources to integrate complex IT solutions," said Rob Soderbery, senior vice president of the Cisco Enterprise Networking Group, in a prepared statement. "Meraki's solution was built from the ground up optimized for cloud, with tremendous scale, and is already in use by thousands of customers to manage hundreds of thousands of devices."

Founded by members of MIT's Laboratory for Computer Science, Meraki provides a number of benefits to its customers with its technology, including wi-fi, switching, security and mobile device management centrally managed from the cloud. It's the capabilities of central management from the cloud that seem of most interest, and that's likely why Cisco has its eye on Meraki.

It looks like Cisco is already thinking of its partners with this acquisition, as well. According to Cisco, the Meraki acquisition will strengthen its Unified Access platform and provide scalable mid-market solutions partners can take to their customers. The acquisition would also push Cisco further ahead in its roadmap for developing more software-centric networking solutions — a strategy the company has been talking about for some time now.