Cisco announced today that it intends to acquire Cloupia, a software company that automates converged data center infrastructure. The deal would extend the company’s existing data center portfolio. Cisco is paying $125 million in cash and retention-based incentives in exchange for all shares of Cloupia.

“With cloud computing driving the transition to converged infrastructure, the need for simplified management systems across compute, storage, network and virtualization functions is increasing,” the company says, indicating that the acquisition will enhance the Cisco Unified Computing System and Nexus switching portfolio with “a single pane of glass view into the automation of compute, network, storage, virtual machine, and operating system resources.”

“Cisco’s data center strategy is based on the premise of making it easier for customers to deploy a unified and integrated infrastructure that is efficient, fast, and flexible,” said David Yen, SVP and GM, Cisco Data Center Business Group. “This strategy involves the delivery of the industry’s most comprehensive data center networking portfolio, which includes physical and virtual products that support multiple hypervisors and storage stacks. The addition of Cloupia’s automation software enhances the efficiency of such unified data center infrastructures, helping to accelerate the transition from physical to cloud environments more quickly and effectively.”

Cloupia employees will be integrated into Cisco’s Data Center division upon the closing of the acquisition. The deal is subject to standard closing conditions, but Cisco expects it to be completed in the second quarter of its fiscal year 2013.