
Cisco Acquires Enterprise Wi-Fi Startup Meraki For $1.2 Billion In Cash - ardahal
http://techcrunch.com/2012/11/18/cisco-acquires-enterprise-wi-fi-startup-meraki-for-1-2-billion-in-cash/
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paul
I think Meraki was the 4th startup that I ever invested in (first was Wufoo).

When we visited their office in Mountain View, it was full of "Meraki Minis"
(their first batch of hardware). I asked how much money they had raised so
far, and their response was, "none". They were so scrappy that they had
managed to build the first batch (which was partially pre-sold) for
practically nothing. And they somehow got the office space for free.

Very impressive team. Glad I invested :)

~~~
sown
How do you find good hardware companies? They seem to be rare. I imagine they
come to you but for someone like me, I am at a loss.

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kanzure
Well, looks like pg called it on this one.

"MAKE HARDWARE WITH NON-SUCKY SOFTWARE."

"okay"

"Here, have a billion."

Obviously, I am omitting all of the actual work for entertainment value. Edit:
isn't a YC company, I don't want to confuse things.

<http://ycombinator.com/ideas.html>

"27. Hardware/software hybrids. Most hackers find hardware projects alarming.
You have to deal with messy, expensive physical stuff. But Meraki shows what
you can do if you're willing to venture even a little way into hardware.
There's a lot of low-hanging fruit in hardware; you can often do dramatically
new things by making comparatively small tweaks to existing stuff."

~~~
watty
Calling their solution "non-sucky" is an understatement.

~~~
samstave
Can you elaborate?

You're saying they suck?

Can you explain exactly why... as a tech design integrator fro major clients
who really like and use them - I need to know how they suck in a very specific
way so I may avoid such mistakes....

wait... areyou saying they are way far above non-sucky?

Sorry the song of your people is foreign to me.

~~~
jacquesm
Non-sucky being an understatement means "It is extremely good" as far as I
understand it.

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ChuckMcM
Congratulations guys (if you're reading). I'm sure this has nothing at all to
do with Ruckus going public [1] :-) Its a great exit and Cisco certainly has
the manufacturing and marketing reach to take you to the next level.

That said, I find it fascinating that my first experience with wireless gear
was with Aeronet (which was also $1B+ buy for Cisco) And of course Linksys
($1B+). And now Meraki ($1B+) So here is the multi-billion dollar question,
"Why does Cisco keep spending billions of dollars on WiFi companies and still
they aren't leading the market in WiFi innovation?"

[1]
[http://www.ruckuswireless.com/press/releases/20121116-ruckus...](http://www.ruckuswireless.com/press/releases/20121116-ruckus-
celebrates-ipo-and-first-day-of-trading-on-nyse)

~~~
jauer
Cisco as a company can't do the kind of "out of the box" R&D that's necessary
for significant innovation. When Cisco wants something truly new they go
acquire a outside company.

That said they've done a fairly good job of growing those companies within
their area (Aeronet as Enterprise, Linksys as Home) through incremental
improvements.

This may be intentional behavior on Cisco's part to control their exposure to
large project failures. IIRC there've been cases where Cisco employees
couldn't get support to develop something new so they quit and once Cisco saw
their success they were acquired back in.

~~~
sinkercat
Cisco has the highest market share in wireless and it is Cisco's innovation in
wireless that's keeping it ahead of Ruckus, Aruba and Motorola. Don't
understand the conclusion that Cisco can't do "out of the box" R&D, at least
in wireless.

~~~
indiecore
I think what he was trying to say is that Cisco's R&D efforts are largely
focused on refining the wireless stuff that it already does, if it wants
something radically new AND that something is being done already it's easier
to just buy the company and their research instead of spinning up a new R&D
effort to reinvent the wheel.

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codemac
How fortunate in the short term, and unfortunate in the long term.

< removed long cynical rant about Cisco and handling of IronPort >

(funny story, Cisco's workplace resources group's bonuses are based on (total
revenue) / headcount+workplace costs. Instead of incentives based on retention
and growth, the group gets a bigger bonus every time a group is downsized, or
they close an office.)

~~~
samstave
I just hope that they don't have the same result as the acquisition of
Airespace in ~2006...

Airespce brain trust cashed out and jumped out and left Cisco's wifi product
poor at best...

So many mistakes... they have solidified their offering - but if you were an
airespce/cisco customer when that happened -- it was horrific.

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yellowbkpk
I remember way back in 2006 or so when Meraki was a startup trying to sell the
hardware units geared towards community wifi systems. A short time after
getting the units out into the community they 'pivoted' away from that model
and started charging for the service: obviously trying to gear their stuff
towards business customers.

I'm glad this pivot worked!

~~~
j_s
Interesting to read how this pivot affected customers who no longer fit their
business model...

[http://www.virishi.net/from-happy-hacking-screw-you-story-
me...](http://www.virishi.net/from-happy-hacking-screw-you-story-meraki)

[http://www.dslreports.com/shownews/Meraki-Annoys-Partners-
Cu...](http://www.dslreports.com/shownews/Meraki-Annoys-Partners-
Customers-88249)

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sown
Neat.

Every time I find a company that I think is worth working for, I spend time on
a good cover letter to try to get interest or even play around with their API
and build something simple. Meraki was one of those companies I cared enough
to write about, I believe, but I never heard back from them. I seem to not be
good enough to be hired but good enough to recognize the best, lol.

Perhaps I should start a newsletter.

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newman314
One of the things mentioned in the acquisition FAQ was that one of the key
differentiators was the Meraki business model.

Can anyone shed more light on exactly what is different?

EDIT: Also, since I have never priced any of their gear before, any idea on
ballpark costs (list) would be nice.

~~~
flyt
Cisco: Buy hardware and associated licenses to use them with a WiFi control
"box", then purchase optional support contracts to receive
replacements/repairs when/if hardware breaks.

Meraki: Buy hardware and a time-based license per unit, typically for three
years. No additional costs.

With the Cisco gear you can buy hardware and essentially use it forever just
for the upfront cost. With Meraki you buy the hardware then pay on a regular
basis to Meraki to continue using it with their cloud control software.

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ayanb
Congratulations Meraki, very well deserved!

I just wonder if they had continued their run, could they have IPO-ed at a
much higher valuation? They seem to have both very strong product and business
fundamentals. Would love to hear thoughts on this..

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helper
Congratulations to the Meraki team. I was hoping to see them make more of a
run on the wireless incumbents, but I can understand that 1.2b was too much to
pass up (considering Aruba's market cap is only 2.1b).

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lsllc
I wonder how similar this is to Ubiquiti's UniFi enterprise WiFi system. I'm a
big fan, UniFi is just excellent as is their point to point/WISP solution
airMAX, very inexpensive too. For example, I recently set up an airMAX 280Mbps
point to point link over about 1/2 mile using 2x Nanostation M5's for ...
$140! Their airFiber system gives you 1.4Gbps over up to 10km for about $2.5K
for the pair of radios.

<http://ubnt.com>

~~~
jauer
Different markets. Ubiquiti's software is no where near as polished as Meraki.
Ubiquiti is working on a cloud controller function to reduce the barrier to
entry for some of their products.

~~~
lsllc
I haven't seen the Meraki software, but what I have seen of the Ubiquiti
software is excellent. The UniFi controller does in fact run in the cloud.
Granted they could do more on the cloud front in terms of having something
pre-built that you can activate with a click.

I'm not sure I'd want my wireless controller in the cloud though, I like the
fact that the UniFi controller runs on anything from an 12 core x64 down to a
single core ARM board depending on the size of your installation.

~~~
jauer
There's a significant difference between being able to run software "in the
cloud" like how Ubiquiti instructs end-users to install Linux and then UniFi
on EC2 and having the entire platform "in the cloud" and ready to use by the
end-users with the operational cost rolled into the purchase price/support
contract.

Requiring end-users to launch EC2 instances is missing the point of easy to
deploy & maintain.

Ubiquiti is working on providing the controller "in the cloud" under the
latter model. You can register and use their hosted system for mFi right now.
Other stuff is coming.

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amalag
I gotta ask, I was looking for some access points for a small company. How
does meraki compare to the super cheap <http://www.open-mesh.com/>

which seems to have some nice software as well. Is Meraki really aimed towards
enterprise who can justify $1000 access points?

~~~
shy_coder
They have some pretty amazing stuff. I recently attended one of their
webinarsa and received a free AP + License. I used to push Ruckus because I
was really familiar with them. Meraki is hands down a much better product.

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dm8
Congrats to Meraki team. Another exit for Sequoia. Looks like they had an
excellent year where companies like Palo Alto Networks, Kayak, LinkedIn that
went public (and doing well). And companies like Instagram, Meraki got
acquired for north of billion dollars.

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netvarun
Interesting article on the CEO, Sanjit Biswas:

Move over, Doogie Howser; here comes Engineer Biswas
[http://mytown.mercurynews.com/archives/sunnyvalesun/04.29.98...](http://mytown.mercurynews.com/archives/sunnyvalesun/04.29.98/SanjitBiswas.html)

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ksec
I understand how Ruckus could be doing IPO. Since they actually solve the
problem with too many WiFi connections going to single point. Problems we have
seen in Hotels, and Apple Expo. etc

How is Meraki different? Since Ruckus is a software + hardware solution.

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Meglis
I might be wrong but the word meraki is one of those greek words that cant be
translated in english and means passion to work and develop something. Try it
on google translate as μεράκι !

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yozmsn
Nice to see startups still being bought for the products and not just the
talent

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pebb
Interesting, never realized they offer a free MDM (MAM) solution.

~~~
dbarlett
There's not a lot of documentation, but Systems Manager is solid. I've been
testing the Android client and found it stable and well-behaved.

