With Cisco's acquisition of Tidal Software last week, the company continues to beef up its software portfolio beyond its core networking business. Tidal makes performance monitoring software for enterprise applications like Oracle and SAP that run in large data centers. While $105 million is not a big bet for Cisco, I see this as further convergence of computing and communications in both the enterprise data center and ultimately in the cloud. There is innovation at the core OS level to optimize performance for Intel's new Xeon 5500 processors. Microsoft Hyper-V, Sun Solaris and Red Hat Linux have been extended to enable performance and energy efficiency improvements available using Intel's extended page table memory access. This allows the hypervisor to bypasses kernel software codepaths altogether and map directly to virtual guest instances. Advanced memory management using Intel's QuickPath enables the ability to virtualize previously uncommon I/O workloads such as database & file serving. This is how we will see network layer virtualization evolve, reducing power consumption while creating efficient memory use along the way. All these features, combined with Cisco's California architecture, are coming together to disrupt the computing core. Moving up the data center management stack with tools such as Tidal makes a lot of sense for Cisco, because at the end of the day, the key will be application performance.