Expand Networks Acquires DiskSites Creating a Powerhouse Portfolio in WAFS and WAN Optimization; Compass Delivering on Markets' Requirements to Simplify Distributed IT Infrastructures and Lower TCO

Business Wire, May 15, 2006

ROSELAND, N.J. & POTOMAC, Md. -- In a joint statement today, Expand Networks announced it has signed an agreement to acquire privately held DiskSites, Inc., of Potomac, Maryland, an innovator in wide-area file services (WAFS) software that optimizes the delivery of applications to distributed organizations. Expand Compass is the first wide area networking (WAN) application acceleration platform that tightly integrates multiple technologies and maps them to the corresponding business mandates. This approach helps IT departments navigate and manage network complexities that impact application, user and business productivity. DiskSites' technology has been integrated into the Expand Compass Platform through an OEM agreement announced in August 2005. The deal, which gives DS shareholders a 13.5% interest in Expand Networks, is expected to close within 60 days.(1)

DiskSites is an innovator and the first company to offer complete wide area file services (WAFS) solutions to global Fortune 2000 companies. The DiskSites technology allows organizations to seamlessly manage and deliver both applications and data throughout the extended enterprise, while also lowering the total cost of IT. DiskSites VBranch solutions address the CIO's primary concern: ensuring the availability of applications and data - as well as branch-level services - across the global enterprise while also reducing the cost of IT.

"As the application acceleration market matures, companies are moving from making decisions based on point solutions to seeking out complete, integrated application acceleration solutions," said Joe Skorupa, Research Director, Enterprise Network Infrastructure, Gartner Research.

Echoing the sentiment of Expand's 1350 customer base, Gary Coyler, Technical Projects Manager (IT) at leading financial services company Royal Skandia said, "Deploying Expand's WAN acceleration technology has vastly increased the performance of applications, files and email traffic over what is often a very congested link. Now, we have much quicker response times without the restrictions of bandwidth. The new WAFS acceleration is something we are particularly excited about because it will enable us to centralize our data sources without compromising the remote user experience. The Expand Compass platform has made it very easy for us to migrate to new hardware platforms in order to leverage its complete set of rich WAN services."

"Our customers understand that in order for WAFS to realize its full potential, it must be part of an integrated approach, leveraging the benefits of WAN optimization technologies," commented Amir Shaked, CEO, DiskSites Inc. "The intent of this transaction is to deliver on that promise and further separate Expand Networks Compass Platform from other vendors by delivering the only field proven solution that integrates full layer 2 thru layer 7 network and application optimization capabilities. Through WAFS optimization in layer 7, the Expand Compass Platform becomes a trusted entity in the domain, providing a "no compromise" alternative for the customer. The results include cost-reduction and superior performance and data integrity, compliance with enterprise security policies such as Microsoft's SMB packet signing, full integration with Microsoft's Active Directory, and, most importantly, business continuity during infrastructure outages."

"The objective of this transaction is to deliver on our commitment to our customers for a multi-service integrated platform that improves remote user productivity, while reducing the cost of servicing those users," said Amir Chitayat, president of Expand Networks. "As remote sites proliferate, storage and networking organizations are increasingly interested in combining WAFS and WAN optimization products to streamline data delivery to those sites. DiskSites' technology is a best-of-breed wide-area file services solution, enabling storage consolidation while providing 'LAN-like' file access over a WAN. The synergies we enjoyed through close R&D collaboration, complementary channels and singular focus on large commercial and governmental organizations such as Honeywell, BMW, Continental Airlines and the United States Department of Defense have now been cemented."

(1) The transaction provides for the acquisition of substantially all the assets and certain liabilities of DiskSites and its wholly-owned subsidiary, and is expected to close during June 2006 and is subject to customary approvals and closing conditions, including shareholder approval.

About DiskSites

DiskSites brings the resources of the data center to users at geographically distributed offices, providing remote optimized application delivery solutions that reduce the cost of branch office IT. Our products eliminate the need to maintain and administer file, print, DHCP and DNS servers, storage and tape sub-systems at remote locations while also ensuring that remote users have direct access to centralized data. Available as an appliance-based product or through a software license, DiskSites dramatically reduces both the IT footprint and the total cost of ownership for global Fortune 2000 corporations, governmental agencies, educational institutions, and other distributed organizations. Our leading VBranch solution provides wide area file services and branch level services, simplifying network administration, increasing data integrity and ensuring access to the right resources while protecting the security of enterprise information. DiskSites has established relationships which include Computacenter, Unisys and OKI Network Integration Co. Ltd., through its partnership with Macnica Networks.