Meraki Enters Wired Market, Introduces Network as a Service Pricing

• By Dian Schaffhauser
• 01/13/11

Meraki is taking Cisco head-on and entering the wired networking gear space with the release of two new routers intended for branch deployment. However, the company, which up until now has specialized in catering to the wireless space, continues its practice of pushing device management into the cloud. The Meraki MX series cloud-managed routers integrate Web-based centralized management, a firewall, Internet gateway service, and application traffic shaping. The company also announced a new "pay-as-you-go" pricing model for its networking products.

"The primary motivation is our customers saying, 'We love what you've done for wireless. And we want to manage our wired products in the same way,'" according to Kiren Sekar, director of marketing. "From a company perspective, wireless is a about a $2 billion market; wired is another $2 billion to $4 billion router market, depending on how you slice it. So this is really a way for us to expand the scope of the company and take on the likes of Cisco head on and have a broad portfolio of networking products."

The MX series that Meraki is introducing has two models: the MX50 for small branches and the MX70 for medium and large branches. The MX50 supports 20 Mbps throughput, a maximum of 20 virtual private networking (VPN) sessions, and a maximum of four virtual LANs; the MX70 supports 125 Mbps throughput., 100 VPN sessions, and 32 virtual LANs.

Each model has two flavors, one for environments that already have a firewall and the other for sites that need firewall capabilities.

The MX50 starts at $400 per year; the MX70 starts at $800 per year for a bundle that includes hardware, software licenses, upgrades, maintenance, and support.

The company's cloud-based management approach allows an IT organization to manage its Meraki wireless and wired network from a browser.

The company tested its new routers in about 40 beta test sites, Sekar said. Feedback from users centered on three major areas. "They found that there are a lot of features--specifically security and management features--that other products have, but that they don't have time or expertise to deploy. This product makes that so easy, they're able to use features like traffic shaping, application firewalls, and content filtering."

Second, the fact that Meraki gear is managed from the cloud has reduced network support for school districts and colleges with multiple campuses or a distributed campus. "They can manage all their campuses over the Web," he said.

Third, because the hardware integrates features that traditionally have required multiple appliances, "The thing is just a lot more cost effective," he insisted.

The MX routers also offer another feature of interest to users in K-12 and higher education environments: automatic monitoring of printers and their ink levels across sites.

The company has also introduced "network as a service" pricing. In this scheme, customers can pay a monthly fee that includes hardware, software, and support. Under the new program, wireless LANs start at $25 per access point per month and branch routers from $35 per router per month.

"You're only paying for what you use," Sekar said. "You're not getting locked into a platform. You can upgrade, downgrade, grow, shrink, or stop at any time." He added that the model is different from a lease, which carries a commitment and shows up on a balance sheet as a liability.

"It really comes down to whether you want to pay cash up front and minimize your costs long term. If you're looking at having the best possible price, you're better off buying it upfront," he explained. "But if you really want to maximize your cashflow and have a smaller annual fee, then service is your best option. This is really a pay-as-you-go service."