Cisco (NASDAQ: CSCO) announced its intent to acquire privately held Tidal Software, Inc. Based in Palo Alto, Calif., and Houston, Tidal Software is the creator of intelligent application management and automation solutions that will advance Cisco's data center strategy by enhancing product and service delivery offerings.

"Cisco believes the network has become the logical platform to manage and maintain mission-critical applications," said Gary Moore, senior vice president of Advanced Services at Cisco. "With the acquisition of Tidal Software, Cisco will accelerate its ability to help customers optimize the performance of their business applications and automate operational best practices in real time, which will lead to significantly reduced operational costs."

Tidal Software's intelligent solutions will bolster Cisco's data center strategy by providing timely, accurate and cost-efficient management and automation of application performance across entire business operations, from the server through the network to the desktop. The acquisition will also create significant opportunities for Cisco and its partners through the delivery of partner-led services, leveraging Cisco's application management capabilities.

Cisco is pioneering the development of next-generation data centers that unleash the full power of virtualization. It recently unveiled its vision of Unified Computing, an evolutionary data center architecture which unites compute, network, storage access, and virtualization resources in a single cohesive system.

The Tidal Software acquisition exemplifies Cisco's "build, buy and partner" innovation strategy to move quickly into new markets and capture key market transitions. Under the terms of the agreement, Cisco will pay approximately $105 million in cash and retention-based incentives.

Upon the close of the acquisition, the Tidal Software team will become part of the Cisco Advanced Services organization. The acquisition is subject to various standard closing conditions and is expected to close in the fourth quarter of Cisco's fiscal year 2009. The acquisition will be accounted for in accordance with generally accepted accounting principles.