Page 3 of 3
Analyst assessment of Cisco's deal was decidedly mixed, though most agreed Cisco paid too much for the company. Some viewed Cisco's move as reactionary, particularly with companies like VMware -- which both partners and competes with Cisco -- snapping up cloud-centric companies like Nicira.
"We believe this deal is expensive and may have been influenced by Cisco missing out on acquiring Nicira for $1.26B," Ehud Gelblum, managing director at Morgan Stanley, wrote in a Tuesday research note. That move, said Gelblum, "put pressure on the company to acquire a cloud play in a bid to add future revenues."
"We also fear Cisco may be buying Meraki near the peak of the K-12 Wi-Fi market excitement," Gelblum wrote.
"We view Meraki as a high-quality participator in the some of the fastest-growing parts of the networking market, including WLAN, security and mobile device management," wrote Jayson Noland, senior analyst for IT systems and networking with Robert W. Baird & Co, in a research note. "However, we are somewhat perplexed by Cisco's proactive effort to acquire expensive assets with overlap to its current portfolio."
Others felt the move is consistent with Cisco's recent acquisition spree.
"The deal is consistent with Cisco's strategy to bolster its software and services offerings to drive greater recurring revenues at higher margins," wrote Amitabh Passi, an analyst at UBS, in a research note. "We believe Cisco approached Meraki a few weeks ago with the offer looking to bolster its cloud networking portfolio, while Meraki will benefit from Cisco's global reach."
John Slack, analyst at Caris & Co., described the deal as a "smart acquisition" and "the latest in a string of deals that bulk-up Cisco's cloud, virtualization and mobility product offerings."
Zacks Equity Research wrote in a note that the acquisition expands Cisco's lineup of midmarket-focused products and also strengthens Cisco's unified access platform, which is a series of products, services and frameworks Cisco's been hyping to simplify how devices and infrastructure are managed.
Sanjiv Wadhwani, an analyst with Stifel Nicolaus, said Cisco needed this piece of the midmarket opportunity to solidify its offering.
"Cisco lacked a controllerless product and consequently was not able to easily address the small and midsized-segment," Wadhwani said. "[That's] one of the fastest growing markets in the WLAN segment."
PUBLISHED NOV. 20, 2012
<< Previous
|
1
|
2
|
3
