Cisco Systems Inc. (Nasdaq: CSCO) announced it is buying Santa Clara, Calif.-based Cloupia Inc. for about US$125 million in cash and incentives to help it provide a better way for service providers and enterprises to manage physical and virtual network resources from a single console.

Service Provider Information Technology (SPIT) player Cloupia calls itself a "a leading data center orchestration and cloud management software provider" and has worked with Cisco and NetApp Inc. (Nasdaq: NTAP), providing management for Cisco switches and NetApp storage appliances. The company's speciality is providing provisioning, monitoring and management for physical, virtual, and cloud environments.

This is the second go-round for Cloupia CEO Raju Datla. He sold network management hardware provider Jahi Networks Inc. to Cisco for $16 million in cash and options back in 2004. (See Cisco Jumps on Jahi.)

Why this matters
In order to pay off on the promise of end-to-end hybrid (physical and virtual) networks, Cisco needs to provide enterprises and service providers with a comprehensive look at all their networking assets -- even if some of those assets are just instances of software on a shared server somewhere.

Cloupia may help Cisco and its customers see their physical, virtual, and cloud assets as one IT infrastructure. It's a timely message, especially as Cisco comes under more competitive pressure from companies looking to provide alternate, more open, ways of controlling network assets to create new services more quickly. (See Big Switch Girds for SDN Battle.)

— Phil Harvey, Editor-in-Chief, Light Reading