Cisco (CSCO) expressed its intent to acquire Pasadena, CA-based, privately-held, Metacloud. Financial terms of the deal were not disclosed.

The acquisition is targeted at accelerating Cisco’s Intercloud strategy- which aims to connect private, public and hybrid clouds in collaboration with its partners.

Backed by a distributed network and security construction designed for valuable application workloads, real-time analytics, almost perpetual expandability and with complete observance for the local data sovereignty laws, the partner-centric business model is being designed for the Internet of Everything (IoE).

The open Intercloud features APIs for express application development. It will deliver a novel enterprise-class portfolio of cloud IT services – mainly for businesses, service providers and resellers.

Cisco plans to invest over $1 billion to assemble its expanded cloud business over the next couple of years.

Metacloud's OpenStack-based Cloud Platform

Metacloud's OpenStack-based cloud platform will step up Cisco's strategy to assemble the Intercloud.

Large scale OpenStack installations are a critical component of Cisco's Intercloud strategy. The globally accepted OpenStack has the ability to handle an almost infinite workload on any hypervisor and on both private and public clouds.

Cisco's acquisition of Metacloud's OpenStack Private Cloud-as-a-Service platform will play a critical role in accelerating the journey of Cisco’s customers to the cloud, facilitating companies to equal the as-a-Service operational benefits of public cloud with the security and control offered by private cloud.

Metacloud will also enable service providers to integrate their public cloud deployments with the lightly managed OpenStack private cloud, and to deliver unique Intercloud offerings to their customers.

Looking Forward

Once the acquisition is completed, Metacloud employees will join Cisco's Cloud Infrastructure and Managed Services organization.

The acquisition of Metacloud is expected to be completed in the first quarter of fiscal year 2015, subject to customary closing conditions.

Cisco currently has a Zacks Rank #3 (Hold).

Other Stocks to Consider:

Better-ranked stocks in this industry include Extreme Networks Inc. (EXTR), which sports a Zacks Rank #1 (Strong Buy), and Brocade Communications Systems (BRCD) and Emulex Corp. ( ELX) both carrying a Zacks Rank #2 (Buy).

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