Report: Riverbed Plans Network Virtualization Play With Expand Acquisition

WAN optimization hardware vendor Riverbed Technology is reportedly looking to expand its software capabilities with the acquisition of Expand Networks.

Riverbed could close the acquisition of Israel-based Expand as early as this week, according to Globes, an Israel-based online business newspaper.

Globes reported that Riverbed plans to spend $10 million to acquire Expand Networks. The two were reportedly in discussions in 2009 for an acquisition deal worth about $30 million, but that deal was never finalized, Globes wrote.

Expand Networks has been in receivership since October despite raising $100 million in venture funding over 13 years. Expand, which in its early days was a larger company than Riverbed, has been losing about $250,000 per month, Globes reported.

Expand provides application acceleration and WAN optimization technology. However, unlike Riverbed, which in the past focused primarily on physical appliances, Expand's focus is on virtualized networking technology, with virtual appliances targeting WAN optimization, mobile users, and application and network management. It also has a physical WAN optimization appliance.

An expansion of Riverbed's virtualization technology which might result from an acquisition of Expand could also help accelerate Riverbed recent moves to stake out a bigger presence in the cloud. The company in July unveiled a cloud storage acceleration business unit aimed at high-speed data backups featuring deduplication as well as encryption of data in flight and in the cloud.

Keith Norbie, vice president of sales at Nexus Information Systems, a Minnetonka, Minn.-based solution provider and Riverbed partner, said an acquisition of Expand, if it were to happen, would fit perfectly with Riverbed's current technology direction.

"Riverbed is already talking about software and virtualization," Norbie said. "It's legacy is in physical WAN appliances and hosted services, but it also offers software versions of its Steelhead appliances."

What is evident in talk about such an acquisition is the fact that virtualization technology is definitely commoditizing different parts of the IT infrastructure, and that the network is no exception, Norbie said.

"If you can buy Riverbed's technology and run it as a virtual appliance or service, you get more flexibility," he said. "The big question for the VAR community is, are you ready to change how you approach infrastructure? Or are you set in the old legacy world. 2012 and 2013 will be big years for looking at how to supply infrastructure technology, and virtualization will be a big part of it."

Riverbed declined to comment on the potential acquisition of Expand.