Cisco today announced they had grabbed newScale, a service catalogue and service portal software developer. The purchase gives Cisco a valuable piece in the emerging private cloud business, one which makes it easier for customers to create an in-house service center.

A private cloud operates in the same fashion as a public one, offering web-based services, but instead of venturing outside the firewall, you get all your services in-house. This offers a number of advantages from a service and security standpoint, and provides a way to charge back customers for exactly  what they use. Your users like it because they only pay for services they use and you can plan resource requirements better from an IT perspective. As I wrote in a blog post earlier this month, Cost Transparency is a Two-way Street, “when your users understand the relationship between cost and consumption, everybody wins.”

What that means essentially is that by placing a set of clearly defined services inside a delivery mechanism like the one that Cisco bought with newScale, you can provide a clear set of costs associated with usage. That’s because, a service portal gives you the means to create a “store” where your users come for standard services offerings. For instance, you might set up a SharePoint collaboration site and a SharePoint file storage site. It provides a way to get in-house services as easily as going online to get services from say Google or Yahoo!.

Parvesh Sethi, senior vice president of Cisco Services said in a statement that they bought newScale because they were seeing a need in the market for this type of service. “Cloud computing represents a major shift in the evolution of the Internet, and as more customers migrate from traditional IT infrastructures, the need for rapid self-provisioning and efficient management becomes increasingly critical,” he explained.  This purchase does precisely that by providing Cisco with a tool the enables customers to create self-service portals quickly.

It’s a smart play because more companies are looking in this direction and looking for tools to help them set up service portals for their private cloud offerings. The deal is expected to close some time in the second half of the year.