Networking firm Cisco has acquired California based vCider, a virtual network overlay technology developer for secure data centre infrastructure.

The vCider acquisition will enable Cisco to develop new virtualisation/cloud technologies and help the company compete in the cloud computing business.

In addition, the acquisition will play an important role in the Cisco Open Network Environment (ONE) strategy, particularly in support of OpenStack, the company said.

OpenStack the foundation of Cisco’s open, multi-hypervisor, multi-stack Cloud computing strategy.

Cisco joined OpenStack 18 months ago and said it has a significant contributor to the OpenStack Quantum API track ever since.

With Quantum becoming a core OpenStack service, Cisco’s Quantum plug-in will enable application developers to increase the programmability of both virtual and physical networks by linking cloud computing to Cisco’s Open Networking Environment (ONE).

Following the acquisition, vCider will be integrated into Cisco’s Cloud Computing organisation, reporting to Cloud Computing chief technology officer Lew Tucker.

Cisco was trying to acquire companies in the virtualised networking market though it lost out to joint-venture partner VMware Iv in July, which bought technology start-up Nicira for $1.26bn.