CASE 5 Cisco's acquisition of Meraki in 2012

Acquisition Overview:

- Announcement and Purchase: 

Cisco announced its acquisition of Meraki on November 18, 2012. The acquisition was valued at approximately $1.2 billion in cash and marked Cisco's strategic move into cloud-based networking solutions.

Strategic Rationale:

- Cloud Networking Expertise: 

Cisco's acquisition of Meraki was driven by a strategic vision to strengthen its position in cloud-managed networking. Meraki was known for its cloud-based networking solutions that offered simplified management and scalability, making it an attractive addition to Cisco's portfolio.

- Mid-Market and SMB Focus: 

Meraki's focus on serving mid-market and small to medium-sized businesses (SMBs) aligned with Cisco's goal to expand its offerings to a broader customer base.

Operational Integration:

- Preservation of Independence: 

Cisco allowed Meraki to operate as an independent business unit, preserving its brand, culture, and business model. This approach aimed to foster innovation and maintain the entrepreneurial spirit that contributed to Meraki's success.

- Technology Integration: 

Over time, Cisco integrated Meraki's cloud-managed networking solutions into its broader portfolio. This integration allowed Cisco to offer customers a more comprehensive set of networking solutions, combining the strengths of both companies.

Leadership Changes:

- Continuity in Leadership: 

Meraki's co-founders, including CEO Sanjit Biswas, continued to lead the company within Cisco after the acquisition. This leadership continuity was intended to ensure a smooth transition and leverage Meraki's expertise within the Cisco ecosystem.

Market Impact:

- Market Presence in Cloud Networking: 

The acquisition strengthened Cisco's presence in the cloud-managed networking space. It allowed Cisco to offer customers innovative solutions for network management and security through a cloud-based platform.

- Diversification of Customer Base: 

Meraki's focus on mid-market and SMB customers provided Cisco with an opportunity to diversify its customer base and address the unique networking needs of smaller organizations.

Financial Aspects:

- Purchase Price:

 The acquisition was valued at approximately $1.2 billion in cash, reflecting Cisco's commitment to investing in strategic technologies and expanding its market reach.

Post-Acquisition Updates:

- Product Enhancements:

 Post-acquisition, Cisco continued to invest in and enhance Meraki's product offerings. The integration efforts aimed to provide customers with advanced and seamlessly integrated networking solutions.

Strategic Focus on Cloud Networking:

- The acquisition of Meraki aligned with Cisco's broader strategic focus on cloud-based networking solutions. It demonstrated Cisco's adaptability to evolving trends in networking technology and its commitment to offering innovative solutions to its customers.

In summary, Cisco's acquisition of Meraki in 2012 was a strategic move to strengthen its position in the cloud-managed networking market. The acquisition allowed Cisco to diversify its offerings, expand its customer base, and leverage Meraki's expertise in delivering scalable and user-friendly cloud networking solutions. The preservation of Meraki's independence and entrepreneurial culture reflected Cisco's approach to fostering innovation within the acquired business unit.