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Cisco Acquires Enterprise Wi-Fi Startup Meraki For $1.2 Billion In Cash

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Re: Cisco Acquires Enterprise Wi-Fi Startup Meraki For $1.2 Billion In Cash

#31

Post by jamie »

ChuckMcM wrote: post #22

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…

It's even worse than that:

http://newsroom.cisco.com/dlls/2005/corp_011205.html

Airespace wireless for $450MM.

Re: Cisco Acquires Enterprise Wi-Fi Startup Meraki For $1.2 Billion In Cash

#32

Post by ChuckMcM »

jamie wrote: post #31
ChuckMcM wrote: post #22

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…

It's even worse than that: http://newsroom.cisco.com/dlls/2005/corp_011205.html Airespace wireless for $450MM.

Interesting, I mis-remembered the Aeronet price apparently it was $799M [1]

[1] http://news.cnet.com/Cisco-buys-Aironet-for-799-million/2100...

Re: Cisco Acquires Enterprise Wi-Fi Startup Meraki For $1.2 Billion In Cash

#33

Post by sinkercat »

jauer wrote: post #29
ChuckMcM wrote: post #22

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…

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 lar…

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.

Re: Cisco Acquires Enterprise Wi-Fi Startup Meraki For $1.2 Billion In Cash

#34

Post by [deleted] »

sown wrote: post #17
paul wrote: post #6

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 offi…

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.

[deleted]

Re: Cisco Acquires Enterprise Wi-Fi Startup Meraki For $1.2 Billion In Cash

#35

Post by jamie »

ChuckMcM wrote: post #32
jamie wrote: post #31

Earlier quoted context omitted.

It's even worse than that: http://newsroom.cisco.com/dlls/2005/corp_011205.html Airespace wireless for $450MM.

Interesting, I mis-remembered the Aeronet price apparently it was $799M [1] [1] http://news.cnet.com/Cisco-buys-Aironet-for-799-million/2100...

Inflation since 1999 should easily tip you over the $1B mark :-)

Re: Cisco Acquires Enterprise Wi-Fi Startup Meraki For $1.2 Billion In Cash

#36

Post by ricardobeat »

jauer wrote: post #30
lsllc wrote: post #16

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.…

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.

Their product lines are already based on cloud controllers, and despite some minor quirks (java, adobe flash…), the software is reasonably polished. But their main selling point are cost and hardware quality, their hardware is at the same time amazing and cheap, and the controller software is free. They sell like water around here.

Very recently I saw the deployment of a network with some 12 APs using Cisco hardware, estimated cost ~$20k (without the software licenses), and it ended up not working very well. The same setup would cost around $1500 with Ubiquiti, and zero software licenses.

Re: Cisco Acquires Enterprise Wi-Fi Startup Meraki For $1.2 Billion In Cash

#37

Post by SatvikBeri »

ChuckMcM wrote: post #22

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…

The Innovator's Solution goes over this in detail, using Cisco as a prominent example.

The incentives at large companies basically make certain types of innovations very difficult to create from within. Large companies tend to have a very fixed set of cost structures and margins. That means that products that would be lower margin are almost automatically deprioritized-even with specific CEO attention it's nearly impossible to change resource allocation processes to foster this kind of innovation.

Instead, the recommended option is to create a subsidiary with no existing cost structure or processes. That subsidiary can then focus on making the new product succeed since it's the only way for them to survive.

Once the subsidiary takes off, you usually do not want to fold it back into the main organization-you'll lose all the advantages that allowed it to succeed in the first place! (There are exceptions, and the book goes into detail on when to integrate and when to give the subsidiary autonomy.)

Buying up new companies is another alternative to starting subsidiaries yourself.

Re: Cisco Acquires Enterprise Wi-Fi Startup Meraki For $1.2 Billion In Cash

#38

Post by daemon13 »

ChuckMcM wrote: post #22

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…

That is Cisco's innovation strategy for the last 10-15 years.

They "outsource" R&D/Innovation to smaller companies and then buy those.

Hence, their special skills as a company are:

1. Identify future growth areas [market segments] and potential leaders.

2. Seamlessly merge the acquired company into Cisco operations.

There was a good article about this in Fortune/Forbes 6-8 years - did not keep the link.

Re: Cisco Acquires Enterprise Wi-Fi Startup Meraki For $1.2 Billion In Cash

#39

Post by stbtrax »

kanzure wrote: post #3

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 Mer…

To be fair most of their hardware started off(not sure if this is still the case) as OEM networking boards, they weren't venturing into the depths of maintaining signal integrity, verifying multiple revisions of hardware, and other electrical testing.
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