Expand Networks (News - Alert) may have started off strong in 2011, but 2012 is looking to be quite the opposite for the satellite optimization company.
Despite efforts to pick up the pieces after falling into bankruptcy in the latter half of 2011, Riverbed (News - Alert) Technology has acquired the assets and intellectual property of the WAN optimization products and services vendor.
Under the agreement, according to reports from Riverbed issued last week, Riverbed has purchased the Israel-based company’s software source codes, its entire customer list and a number of physical assets. The actual deal differs considerably from initial reports in December that Riverbed would purchase the entire company for a price point of $10 million.
Riverbed officials have emphasized that because the two companies’ product portfolio are particularly similar, the company has no intentions to sell any of Expand’s existing products or leverage Expand technology in its own products. Accordingly, Riverbed will not assume any of Expand’s liabilities, obligations or contracts.
"We fully respect the Expand products, and there are some aspects of the technology that are interesting," said Paul O’Farrell, vice president of corporate development and strategy at Riverbed, as reported by CRN.com. "But given the fact that our 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."
In its customer-driven approach to the acquisition, Riverbed says it intends to provide a short-term support program led by a small group of Expand employees and engineers for any Expand orders and products through April 30. However, Riverbed plans on supporting these contracts through Jan. 31, 2013, and will offer Expand customers incentives during this time period to transfer to Riverbed’s solutions.
Back in October 2011, reports surfaced that Expand had fallen into bankruptcy from losing up to an astounding $250,000 per month, despite its efforts to raise $100 million in venture funding over a period of 13 years.
So, how exactly did the tables turn for Expand, a company that in its infancy was significantly larger than what Riverbed is now?
"Riverbed succeeded because of its technology," according to O’Farrell. "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."
Riverbed will make an online FAQ available on Feb. 1, for any inquiries related to unshipped Expand products. The FAQ also comprises of answers having to do with the money still owed to customers and suppliers to a temporary liquidator selected by the District Court of Haifa in Israel.
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Tammy Wolf is a TMCnet web editor. She covers a wide range of topics, including IP communications and information technology. To read more of her articles, please visit her columnist page.
Edited by Jamie Epstein