Telecom Lead America: Cisco Systems is buying Meraki for $1.2 billion to expand its ability to let customers compute in the cloud.

Meraki was founded in 2006 by members of MIT’s Laboratory for Computer Science. Meraki technology 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.

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

Cisco 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.

Last week, Cisco announced its $125 million purchase of Cloupia which develops software that helps data center operators manage their resources.

During the quarterly result, Cisco CEO John Chambers said the networking major will continue its acquisition strategy. Chambers said the Internet of Everything will create unprecedented possibilities for businesses, individuals and countries, andCisco is poised to lead and fully maximize the opportunities of this evolution.

Recently, Cisco acquired NDS, vCider and ThinkSmart. The company will be active with acquisitions to drive growth and value proposition with its customers. Cisco continues to prefer small-to-medium size deals that are a fit from a technology, strategy, culture and an ROIC perspective.

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