Cisco Announces Intent to Acquire newScale plans to use newScale's tools to complement and expand its existing services options for cloud management and automation.

The newScale portfolio competes directly with products provided HP such as the HPService Catalog, and some elements of the HP Matrix OE and the HP’s Cloud Service Automation suite.

newScale also competes with offerings from VMware (VCloud Director) and BMC (BMC Cloud Lifecycle Management ), so with this acquisition Cisco has acquired capabilities that were previously delivered by Cisco's partners.

This acquisition will put more pressure on the VCE alliance as Cisco develops more capabilities that were delivered by VMware or EMC Ionix (or BMC outside of the VCE coalition.

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SAN FRANCISCO, Mar 30 -- Computer networking equipment giant Cisco Systems Inc. on Tuesday announced the intent to buy privately-held software company newScale Inc., in a move to complement and expand its offerings in cloud computing.

Based in San Mateo in the U.S. state of California, newScale provides software that delivers a service catalog and self-service portal for information technology (IT) organizations to select and quickly deploy cloud services within their businesses.

Founded in 1999, the company now has more than two million users worldwide, including 20 percent of the Fortune 50 companies, according to information posted on newScale's website.

"With the acquisition of newScale, Cisco will be able to accelerate the deployment of cloud services through a service catalog and self-service portal that allows customers to easily manage their IT infrastructures," Parvesh Sethi, Cisco's senior vice president, noted in a statement.

Cisco said it expects to close the deal in the second half of its fiscal year 2011, without disclosing financial terms.