Expand Finds Funding & Fixes Sights on M&A

WAN specialist picks up $8.5M from Intel Capital and outlines roadmap

August 28, 2008

3 Min Read
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WAN optimization vendor Expand Networks is eyeing new markets, virtualization, and potential acquisitions after clinching $8.5 million in funding from Intel Capital.

There’s a lot of activity at the moment, including global expansion,” says Adam Davison, Expand’s corporate vice president of sales and marketing. “We have opened up in Canada, India, Eastern Europe, Russia, and Latin America.”

The exec was less forthcoming on Expand’s hiring plans, refusing even to confirm the size of the company’s workforce, which is said to number upwards of 150 people.

Like other firms in the rapidly consolidating WAN optimization market, Expand is also considering some M&A action, according to Davison.

“We’re currently looking to potentially acquire technology that aligns to our vision and roadmap,” says Davison, but would not reveal which companies are in the vendor’s cross-hairs.M&A has certainly become synonymous with WAN optimization in recent years, as evidenced by Blue Coat's $268 million purchase of Packeteer, F5's Acopia and Swan Labs acquisitions, Cisco’s purchases of FineGround and Actona, and Juniper’s $337 million Peribit deal.

Expand, in contrast, has been relatively restrained in its M&A strategy, apart from its acquisition of Wide Area File Services (WAFS) specialist DiskSites two years ago.

Virtualization is also looming large on Expand’s horizon, according to Efi Gatmor, the vendor’s CTO, who told Byte and Switch that a chunk of this week’s money will be spent on boosting the vendor’s virtual presence.

“That’s a focus area that we’re going after – we’re able to deploy in a virtual environment, and we’re able to accelerate Virtual Desktop Infrastructures (VDIs),” he says, adding that Expand's hardware can run as a virtual appliance on top of a hypervisor. “You will see an announcement about that as we go into the VMworld conference on September 15th.”

At the moment Expand’s main virtualization focus is VMware’s ESX and Server software, although the vendor is looking to broaden its target. ”All the major hypervisors will be supported,” says Gatmor, but he refused to offer a timeframe for when vendors such as Citrix and Microsoft could be added to this virtual mix.The first rumors of Expand’s latest funding round emerged earlier this month, although this week’s deal with Intel Capital was worth slightly less than the expected $10 million cash infusion.

The WAN optimization vendor has nonetheless raked in the funding over the last few years. Expand picked up $21 million in an F round of funding just over a year ago, taking its total funding to $74 million, a figure which is now well over $80 million.

Despite facing stiff competition in the WAN optimization market from the likes of Juniper and Cisco, Expand’s Davison denies that the vendor that a lack of money prompted this week’s funding round.

”No, absolutely not,” he says. “If you look at the Intel investment, it’s to continue our rapid growth.”

The exec refused to quantify this "growth" in dollar terms, but did confirm that Expand has racked up around 3,500 customers.Have a comment on this story? Please click "Discuss" below. If you'd like to contact Byte and Switch's editors directly, send us a message.

  • Acopia Networks Inc.

  • Blue Coat Systems Inc. (Nasdaq: BCSI)

  • Cisco Systems Inc. (Nasdaq: CSCO)

  • Expand Networks Inc.

  • F5 Networks Inc. (Nasdaq: FFIV)

  • Infonetics Research Inc.

  • Packeteer Inc. (Nasdaq: PKTR)

  • Peribit Networks Inc.

  • Swan Labs Corp.

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