Cisco Systems Inc. Tuesday, July 26, announced an agreement to acquire privately held Sheer Networks Inc., which makes "intelligent" network management products, for up to $122 million.

The acquisition, Cisco's ninth this year, is another signal of the company's commitment to buying technology that accelerates and secures the movement of Web-based applications like e-mail across an extended computer network.

San Jose, Calif.-based Cisco said it will pay $97 million in cash and assumed options for Sheer Networks, also based in San Jose, and may increase the price by as much as $25 million if the startup clears certain product and development milestones after the deal closes.

Erik Suppiger, an analyst with Pacific Growth Equities LLC in San Francisco, said Sheer Networks' equipment helps businesses share and operate Web applications across networks operated by multiple vendors, ensuring that software works regardless of the equipment it is running on.

Cisco has lagged some of its rivals in offering more effective network management equipment, Suppiger said, although the company has recently focused a number of its acquisitions on improving its product line in this area.

In May, for example, Cisco agreed to pay $70 million for FineGround Networks Inc., which makes software to accelerate and secure Web applications across an extended computer network. Computer users share Web applications over increasingly far-flung networks, largely as a result of the proliferation of mobile devices and the increase in employees who access secure company information from remote locations.

Other Cisco rivals also have been working to improve their network management products by acquiring smaller, specialized companies. Earlier this year, Juniper Networks Inc. of Sunnyvale, Calif., acquired two Silicon Valley networking equipment startups, Peribit Networks Inc. and Redline Networks Inc., which make technology to secure Web applications.

Sheer Networks, which has 100 employees in San Jose and Israel, said its technology is based on a model that "hides" the complexity of physical networks, consequently making them more readily accessible to a variety of applications. The company last year made a small profit on revenue of about $10 million, through sales to a number of major telecommunications companies including Teléfonos de Mexico SA de CV and KT Corp. of South Korea.

In announcing the transaction, Cisco said it plans to work with other hardware and software vendors to develop applications that can more easily work with its own applications.

Venture capitalists and strategic investors have backed Sheer Networks with a total of about $60 million since the company was founded six years ago. The startup was funded by Nortel Networks Corp. of Brampton, Ontario, along with 3Com Ventures of Marlborough, Mass., Rein Capital LLC of Lakewood, N.J., and Israel's Jerusalem Venture Partners.

Allon Bloch, a partner with Jerusalem Venture Partners, said he was "very happy" with the returns generated by the firm's $12 million investment, which was made in two rounds. JVP's most recent, $6 million investment, made in 2004, will produce a 3 to 4 times return, Bloch said.