Riverbed Acquires Technology, Customer Base Of Expand Networks

Riverbed Tuesday confirmed that it had acquired intellectual property and other assets of Israel-based WAN optimization technology vendor Expand Networks.

Initial reports of the acquisition surfaced in late December when the Israel-based online business newspaper Globes said Riverbed planned to acquire Expand for about $10 million.

In the actual deal, Riverbed acquired Expand's intellectual property including software source codes, the company's customer list, and some physical assets, said Paul O'Farrell, vice president of corporate development and strategy at Riverbed.

However, because Expand's product line overlaps that of Riverbed's, Riverbed has no plans to sell any current Expand products or use Expand technology in its own products, O'Farrell said.

"We fully respect the Expand products, and there are some aspects of the technology that are interesting," he said. "But given the fact that out product lines overlap, the most logical path for us is to focus on Riverbed technology. So this is more a focus on the Expand customers."

Riverbed is already a global company, and Expand, because of its Israel location, has a bigger customer base in EMEA (Europe, Middle East, Africa) and in parts of Asia than Riverbed does, O'Farrell said. "But the acquisition was not about geographical expansion," he said. "Our focus is on customers we did not have before."

Not included in the deal were Expand's liabilities, obligations, or contracts. Because of that, according to an on-line FAQ made public by Riverbed, Riverbed is referring questions related to unshipped Expand products and money owed to customers and suppliers to a temporary liquidator appointed by the District Court of Haifa, Israel.

Riverbed plans to offer a limited support plan for existing Expand customers, with details of the plan, including the costs, slated to be available on February 1, according to the FAQ. The company will also unspecified "special incentives" to Expand customers who migrate to Riverbed technology.

Expand Networks had 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.

Riverbed was formed about 10 years ago, O'Farrell said. However, Riverbed was successful where Expand failed to grow quickly enough over time.

"Riverbed succeeded because of its technology," he said. "But it was also because the market shifted away from network compression, which was the technology that Expand originally focused on. Riverbed instead developed WAN optimization that included dedupe and application optimization. Expand did add file caching technology via an acquisition in the past, and tried to combine its technologies, but was not so successful. Riverbed always had integrated technology."