Cisco to buys software company Tidal for $105 million

Network equipment maker Cisco Systems Inc said on Thursday that it planned to buy privately held Tidal Software Inc for about $105 million in cash and incentives, to bolster its range of products and services for corporate data centers.

Tidal Software offers management software such as job scheduling systems and applications that automate and control business processes, helping companies reduce operational costs. Cisco said it expected the deal to close in the quarter ending in July.

Cisco, which dominates the market for networking gear used to pass information between computers, last month announced plans to sell so-called blade servers, slim back-office computers that businesses use to process data and run application programs. The move put Cisco in direct competition with server makers such as Hewlett-Packard Co., and International Business Machines Corp., two of Cisco's longtime partners. (See: Cisco unveils its first server computer)

"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," Cisco said in a statement.

In late January, Tidal Software said revenue for the quarter ended 31 December had risen moderately from a year earlier, and that it was profitable. Customers include Citibank and Microsoft Corp.

Software acquisitions are rare for Cisco. The San Jose, California, company mainly relies on other companies to provide programs that work with its hardware. Owning Tidal's software will help Cisco optimize the performance of its servers, Bill Ruh, vice president of Cisco's advanced-services organization, said yesterday.

Cisco CEO John Chambers has said the company would use the recession as an opportunity to act aggressively and make acquisitions. Cisco, which had $29.5 billion in cash as of 24 January, issued $4 billion in debt in February in part to fund acquisitions. In March it acquired camera-maker Pure Digital Technologies Inc. for $590 million. (See: Cisco diversifies into video with $590 million acquisition of Pure Digital)

Cisco shares were up 4.6 per cent at $17.91 in morning trading.