Cisco just bought out Cloupia for $125 million, a startup that specializes in making software that automates hybrid IT infrastructure. This includes environments where physical and virtual servers run side by side, as well as private clouds that make use of public services such as AWS.

ISI analyst Brian Marshall says that Cloupia employs 50 workers, all of whom will become a part of Cisco Data Center Group once the deal is closed by the end of this quarter.

“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, senior vice president and general manager, Cisco Data Center Business Group. “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 has around 30 customers according to Marshall, and maintains tight relations with, Amazon, Rackspace, Microsoft and VMware. The virtualization firm, which is a part of the VCE joint venture between parent company EMC and Cisco, has started competing with the networking giant earlier this year.

Back in July, VMware announced a definitive agreement to acquire Nciria for $1.26 billion, an SDN startup that defies the rein of the vendor-specific routers and switches that helped establish most of the big name vendors in this industry, namely Cisco.

The networking giant has not been as quick to adopt SDN as some of its peers, and still offers only limited support across its portfolio. This has to change if the company wants to stay competitive on the long run, especially with the new kid in town.

Big Switch came out of stealth this week with a set of solutions that take Nciria’s vision to a whole new level: virtualizing the network, and running apps on top.