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Cisco Makes Meraki Move, Eyes Cloud Dollars

The acquisition, however, was hardly a bolt out of the blue, according to Oppenheimer & Co. analyst Ittai Kidron.

"The deal doesn't surprise us considering Cisco's ongoing effort to build-out WLAN and Unified Access in longer term defense of its Ethernet switching business," he wrote. "As for Meraki, its appeal lies in its software controller which allows network operators to centrally manage and operate networks through the cloud. While valuation appears rich, Meraki could round out Cisco's WLAN (Wireless LAN) portfolio and longer term, potentially complement its SDN (Software-Defined Networking) and cloud strategy."

SDN refers to, a set of techniques for managing network traffic flows through software, which is increasingly touted by the likes of Cisco and its networking rival HP (HPQ - Get Report).

The Meraki acquisition is expected to close in Cisco's fiscal second quarter ending in January.

Cisco shares, which have gained 0.94% this year, were up 1.45% to $18.25 in Monday's trading.

-- Written by James Rogers in New York.

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