Marvell Technology Group Ltd. played Pac-Man Thursday (Feb. 6), gobbling up all outstanding assets of embedded networking software provider Radlan Computer Communication Ltd. Marvell currently owns 9 percent of Radlan, and will acquire the remaining 91 percent for $48.7 million.

Radlan's attention going forward will be focused solely on developing software for Marvell's Prestera line of Ethernet switching chips. Radlan will honor existing development agreements but “we won't embark on any new outside business beyond that point, ” said Marvell's chief financial officer, George Hervey.

Radlan previously intended to develop Layer 2, 3 and 4 software that could be embedded into networking devices. This led to the development of the Open and Portable Embedded Networking Software (OpENS) suite, which included such key software as Layer 2 switching protocols, classification, and Layer 3 routing protocols. Radlan also worked closely with chip vendors and had arranged to port its software to Broadcom Corp.'s StrataSwitch products and to Marvell's Prestera products.

With the acquisition of Radlan, Marvell must now prove that it makes sense to have embedded software in-house. Both Mindspeed Technologies and Intel Corp. ventured into the embedded networking software a few years back when Intel acquired Trillium Digital Systems and Mindspeed bought NetPlane Systems. But those acquisitions proved unsuccessful, and both Mindspeed and Intel subsequently sold off those assets for much less than they had paid.

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Different situation

Marvell said its situation will be different due to the acceptance of its Prestera chip. “In this case, Prestera is the solution period in the Ethernet switching space,” said Weili Dai, general manager of Marvell's Communication business unit. Prestera's strong position means that Marvell would not gain significant revenues by porting the Radlan software to another platform, Dai said, and thus makes the tight integration of Prestera and the OpENS software a better option for the market.

Marvell customers will also benefit from this integration, she said. Developing software for Prestera is too complex a job in the current economic climate, and Marvell's ability to offer a more complete package to the market allows customers to focus on differentiation, she said.

Once the acquisition is completed, 120 employees from Radlan will join Marvell's staff and will operate as a software team inside Marvell's Communication business unit, Dai said.

Under terms of the deal, Marvell will acquire the remaining outstanding shares of Radlan capital stock and employee stock options. An additional 1 million shares of Marvell common stock will also be reserved for future issuance if certain performance goals are met. The boards of both companies have approved the acquisition, which is expected to close within 60 days.