Cisco has agreed to pay $1.15 billion for Meraki, a maker of cloud-managed networking products that was founded by MIT graduates.
The network equipment giant said the buyout would help it target midmarket-sized customers with "on-premise networking solutions that van be centrally managed from the cloud".
"These companies have the same IT needs as larger organizations, but without the resources to integrate complex IT solutions," Cisco's enterprise networking group senior vice president Rob Soderbery said.
Meraki provides wi-fi access points, switches and security appliances that are deployed at a customer site, such as a campus or branch office.
The appliances "automatically connect to Meraki's cloud over SSL, register with your network, and download their configuration", the firm said.
The network can then be managed and controlled via a web-based interface. Firmware updates and application signatures update automatically.
Cisco expects to close the acquisition in the second quarter of fiscal year 2013, pending regulatory review and other conditions being met.