Updated from 9:42 a.m. EDT

Networking giant Cisco Systems ( CSCO) ramped up its data center strategy Thursday, announcing plans to acquire privately held Tidal Software in an attempt to bolster its application management story.

The $105 million deal, which is a combination of cash and retention incentives, is just the latest in Cisco's ongoing metamorphosis.

Tidal Software builds management software for applications such as SAP, Peoplesoft, Java, and Microsoft's ( MSFT) .Net. The Palo Alto, Calif.-based firm, which competes with BMC Software ( BMC), CA ( CA) and IBM's ( IBM) Tivoli, also touts its ability to schedule workloads such as databases and customer relationship management.

Cisco is on a data center tear at the moment, recently announcing its entry into the server market.

The San Jose, Calif.-based firm's sales of networking gear have been hammered in the tech spending slowdown, and Cisco is desperate to open up new revenue streams.

Rival networking firm Juniper ( MSFT) lowered its first-quarter sales forecast earlier this week, underlining the challenges facing Cisco CEO John Chambers.

Cisco, which is committed to a long-term growth rate between 12% and 17%, dominates the networking market, but is now seeking out new opportunities in corporate data centers and even consumer electronics.

With almost $30 billion in cash and investments at the end of its fiscal second quarter, Cisco can easily afford to buy its way into new markets, as evidenced by the recent $590 million acquisition of camcorder specialist Pure Digital. Snapping up Tidal Software could make Cisco a potential challenger to IBM, and it gives a clear indication of the firm's broader data center ambitions.

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