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Cisco to Acquire San Francisco-Based Meraki for $1.2 Billion

Posted: Nov 22, 2012

Cisco Systems said Nov. 18 it intends to acquire Meraki Inc., a San Francisco-based provider of networking systems that can be managed from the cloud, for $1.2 billion in cash.

Meraki was co-founded by CEO Sanjit Biswas, CTO John Bicket and vice president of product management Hans Robertson.

They are former Ph.D. students at MIT’s Laboratory for Computer Science who developed Wi-Fi technology making it simple for small businesses to install and bypass traditional landline networks.

Their thesis advisor at that time was the late Rajeev Motwani, a Stanford University professor who also was a well-known advisor to Google co-founders Larry Page and Sergey Brin.

Sequoia Capital venture partner Doug Leone wrote in his blog Nov. 19 that Motwani introduced the Meraki co-founders to Sequoia Capital, which became a series “A” investor.

“Six years ago Sanjit, John and Hans saw our Wi-Fi world before many others,” Leone posted. “Meraki offered smaller wireless ISPs a complete package to roll-out wireless networks without a lot of time, money or expertise. It gave upstart ISPs a way to enter new markets and disrupt existing ones.”

“The benefits were obvious: the ability to scale without wires, low cost of entry, ease of use, and network analysis tools to help operators maximize revenue from their small networks.”

This is the second acquisition Cisco has announced in the few days of a company in the cloud technology sector with Indian American leadership and a co-founder.

Cisco said Nov. 15 it would acquire Santa Clara, Calif.-based Cloupia, which automates converged data center infrastructure, for $125 million (see separate story this issue). Cloupia was founded by four Indian American entrepreneurs.

"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, said Rob Soderbery, senior vice president, Cisco Enterprise Networking Group.

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

InformationWeek reported that at the Interop Conference and Expo in Las Vegas earlier this year, Cisco chief technology officer Padmasree Warrior said the company is rethinking its approach to the network.

In a time of “immersive collaboration," Warrior said, networks need to have visibility, security and manageability. Cisco is making it easier for enterprises by adopting the Software Defined Network. "We want everyone to think more holistically about SDN," she added.

Cisco expects the Meraki deal to close in the second quarter of the 2013 fiscal year. Cisco shares were up 1.06 percent to $18.18 in morning trading Nov. 19.

Biswas is currently on leave from the Ph.D. program at MIT. The Indian American entrepreneur has a B.S. in computer systems engineering from Stanford and an M.S. in electrical engineering and computer science from MIT.

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