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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
      þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended
    December 31, 2008oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the Transition Period
    from          to   Commission File Number:
    001-33355
      BigBand Networks,
    Inc.
 (Exact name of registrant as
    specified in its charter)
      Delaware

04-3444278(State or other jurisdiction
    of incorporation or organization)

(I.R.S. Employer
    Identification Number)   475
    Broadway Street
    Redwood City, California 94063
    (Address of principal executive offices and zip code)
  (650) 995-5000
  (Registrants telephone number, including area code)
      Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.001 par value

The NASDAQ Global Market   Securities registered pursuant to Section 12(g) of the
    Act:
 None.
      o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
     DOCUMENTS INCORPORATED BY REFERENCE
  Form 10-K.




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##### 





BigBand
    Networks, Inc.FORM 10-K
    for the fiscal year ended December 31, 2008
    TABLE OF CONTENTS
   
 PageSpecial Note Regarding Forward-Looking
    Statements


3PART I.Item 1.


Business


4Item 1A.


Risk Factors


17Item 1B.


Unresolved Staff Comments


31Item 2.


Properties


31Item 3.


Legal Proceedings


31Item 4.


Submission of Matters to a Vote of Security
    Holders


31PART II.Item 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


31Item 6.


Selected Financial Data


33Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


34Item 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


50Item 8.


Financial Statements and Supplementary Data


51Item 9.


Changes In and Disagreements With Accountants on
    Accounting and Financial Disclosures


82Item 9A.


Controls and Procedures


82Item 9B.


Other Information


84PART III.Item 10.


Directors, Executive Officers and Corporate
    Governance


84Item 11.


Executive Compensation


84Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


84Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


84Item 14.


Principal Accountant Fees and Services


84PART IV.Item 15.


Exhibits and Financial Statement Schedules


85Signatures


87EX-10.24BEX-21.1EX-23.1EX-31.1EX-31.1EX-32.1   2




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SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS  Form 10-K (Form 10-K) Form 10-K, Form 10-K. Form 10-K
  Form 10-K
  Form 10-K
  Form 10-K
  Form 10-K Form 10-K
 3




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PART I  Item 1.
    BUSINESS  Overview
    Industry
    Background
    Competitive
    Dynamics Changing Video, Voice and Data Networks
       4




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Changing
    Consumer Demands
    
    Personalization.  With the proliferation in
    content, consumers are seeking content that is increasingly
    customized to their personal interests. This personalized
    content spans everything from the purchase of downloadable songs
    to customized video programming, such as Video on Demand (VOD)
    and niche channel packages.
    Richer Content.  Consumers are demanding a
    higher quality experience, whether online or in their television
    viewing. As a result, consumers are continuing to purchase HDTVs
    and high-speed data services to access richer content, such as
    HD programming, user-generated video clips and interactive
    online video games.
    Ease and Speed of Access.  In an increasingly
    mobile world, consumers desire faster access to content from
    virtually anywhere using a wide range of devices, such as
    portable media players, televisions, mobile phones, personal
    digital assistants and personal computers.    Advertisers
    Demand Greater Intelligence in Video-Based Advertising
    
    Relevancy.  Advertisers are demanding that
    their ads be addressed to a relevant audience. For example, they
    desire to target video advertising to particular geographic
    zones, and ultimately want to tailor advertising to specific
    subscribers.
    Interactivity.  Advertisers want to provide
    consumers with an easy and immediate way to respond to an
    advertisement. For example, advertisers would like to provide
    subscribers with the ability to use a remote control to
    immediately access additional product information associated
    with a television advertisement.
    Measurability.  Advertisers are seeking ad
    distribution networks that allow them to measure the
    effectiveness of their ad spending and are willing to pay more
    for video advertisements that result in a higher consumer
    response rate.   5




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Intelligent,
    High-Bandwidth Video Networks are Needed
      
    Bandwidth Limitations Posed by Video.  Service
    providers fixed-bandwidth networks are not fully equipped
    for the volume and richness of content being demanded by
    subscribers. For example, a typical HDTV video stream requires
    19.4 megabits per second (Mbps) of continuous bandwidth, which
    is up to ten times the bandwidth required by a standard
    definition video stream and substantially greater than the
    10 Mbps limit of most copper-based network data
    connections. To meet the demand for more and richer content such
    as HDTV, service providers must either undertake a costly
    capital expansion of their network infrastructures or use their
    existing infrastructure more efficiently.
    Difficulty of Delivering a High-Quality Video
    Experience.  Service provider networks are
    inherently prone to packet loss, error and delay. This problem
    is exacerbated as the richness and volume of the content being
    delivered across the network increases. Importantly, HDTV is
    approximately 1,000 times more sensitive to packet loss, error
    and delay than voice and data services. To ensure a consistently
    high-quality subscriber viewing experience, service providers
    must find solutions that maintain the integrity of the video
    streams as these streams move across their networks.
    Lack of Customized Video Programming.  Existing
    network infrastructures lack the intelligence to allow service
    providers to understand and react to subscriber television
    viewing behavior. As a result, service providers lack the
    ability to deliver video programming packages tailored to the
    interests of specific subscribers or groups of subscribers.
    Service providers require network infrastructure that will
    enable them to understand subscriber viewing behavior and, based
    on that understanding, allow them to deliver new video channels
    and programming packages to specific subscribers or groups of
    subscribers.
    Requirement for More Relevant Video
    Advertising.  Advertisers are demanding that their
    ads be addressed to a relevant audience. To satisfy this demand,
    service providers need the capability to deliver video
    advertising to particular geographic segments and demographic
    groups, and ultimately, to tailor advertising to specific
    subscribers. In most broadcast implementations, service
    providers lack the capability to distinguish one subscriber from
    another and the capacity to insert tailored advertising into a
    continuous video stream without degrading service quality.
    Service providers are seeking solutions that will enable the
    seamless insertion of relevant advertisements into video streams.
    High Cost of Infrastructure
    Investment.  Service providers have invested
    heavily to establish their existing network infrastructures,
    including the deployment of a significant amount of cable
    set-top boxes. Service providers must either make significant
    investments to upgrade or replace their existing infrastructure,
    or find ways to extend the useful life of their installed
    equipment. Service providers generally prefer network-based
    capital investments since these costs can be allocated across
    many subscribers without costly replacement of existing set-top
    boxes. 6




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
    Need to Rapidly Deliver Advanced
    Services.  Historically, service providers have
    needed to make very large capital expenditures to purchase
    replacement network equipment to support next-generation
    services. With the increasing pace of change, service providers
    require platforms with the flexibility to rapidly deploy
    advanced video and data services while minimizing lengthy and
    capital-intensive network upgrades.    The
    BigBand Offering
        
    Intelligent Bandwidth Management.  Using our
    solutions, service providers can address their increasing
    bandwidth needs. For example, we offer what we believe to be the
    most widely deployed switched digital video solution
    commercially available today. Our Switched Digital Video
    solution only transmits channels to subscribers when the
    subscribers in a service group are in the process of watching
    those channels, instead of broadcasting all channels to all
    subscribers all the time. This enables service providers to
    achieve 50% or greater savings in bandwidth usage for digital
    subscribers, allowing service providers to offer additional
    services (such as HDTV channels) without altering the subscriber
    viewing experience.
    High-Quality Video Experience.  Our solutions
    allow service providers to minimize the likelihood of video
    quality errors by detecting potential video quality degradation
    in real-time and correcting such degradation before the video
    stream is delivered to subscribers. Our core suite of video
    processing software modules are designed to enhance the richness
    of the viewing experience by optimizing the delivery of video
    streams, while our program level redundancy functionality adds
    the switching capability to automatically provision an
    alternative video stream should the quality of the primary
    stream begin to degrade.
    Enhanced Video Personalization.  Using our
    solutions, service providers can interact with their subscribers
    down to the individual channel change and, as a result, can more
    accurately tailor programming packages to the interests of their
    subscribers. For example, our Switched Digital Video solution
    enables service providers to satisfy consumer demand for
    increasingly personalized content by expanding the number of
    channels that can be offered because selected channels are only
    delivered when the channel is requested by a subscriber in the
    service group. Using this solution, one of our customers was
    able to offer additional channel packages tailored to
    demographic groups.
    Ability to Deliver Relevant Video
    Advertising.  Our solutions allow service
    providers to insert advertising tailored to specific subscriber
    groups. For example, using our Personalized Video solution,
    service providers can simultaneously insert different ads into
    multiple copies of the same program and forward them to specific
    geographic zones. This allows service providers to attract
    advertisers interested in reaching niche markets.
    Optimize Return on Existing Infrastructure
    Investment.  Our network-based solutions allow
    service providers to manage service quality from the network,
    rather than deploying costly personnel and equipment at the
    customer premises. Because our solutions are deployed at the
    network level, service providers can leverage their
    infrastructure investment across many subscribers and avoid the
    hardware and service costs associated with an upgrade of
    equipment in the homes of subscribers. 7




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
    High Availability.  Our solutions are built
    utilizing carrier class hardware that provides our customers
    with solutions that offer what we believe to be higher
    availability of the video services they deliver to consumers as
    well as a lower total cost of ownership since the cost of
    maintenance and replacement of our hardware platforms is reduced.
    Platform Flexibility.  Our solutions feature a
    fully programmable hardware and modular software architecture.
    Our
    field-upgradable
    hardware is designed to meet service provider platform
    flexibility requirements and to minimize the need to replace
    existing hardware. For example, one customer initially purchased
    our equipment for basic media processing functionality and was
    subsequently able to further enhance this same hardware platform
    within a matter of hours to deliver our advanced Broadcast Video
    solution simply by licensing an additional software application
    from us.  Strategy
    
    Further Technology Leadership Position.  Over
    the past 10 years, we have developed media processing and
    video systems design expertise. We used this expertise to
    deliver what we believe to be the most-widely deployed switched
    digital video product commercially available today. We will
    continue leveraging our expertise to deliver solutions that
    focus on optimizing network infrastructure and enabling delivery
    of a high-quality user experience.
    Leverage Modular Architecture to Accelerate New Product
    Introduction.  We have created a series of media
    processing software modules that, when combined with our
    programmable hardware and switching fabric, serve as the
    foundation for a range of network-based solutions. The
    competition between cable operators and telecommunications
    companies is accelerating the rate of change in their networks,
    and we believe our software modules will serve as the foundation
    for rapidly delivering solutions that address our
    customers bandwidth and service delivery needs.
    Expand Footprint Within Existing Customer
    Base.  We have customer relationships with a
    number of service providers both in the U.S. and
    internationally, including seven of the ten largest service
    providers in the U.S. We believe these customer
    relationships give us a strong advantage in understanding our
    customers network challenges and delivering timely
    solutions. We will continue to work closely with our customers
    on the designs of their network architectures and emerging
    services, expand our relationships with these customers to
    deploy more of our existing applications, and develop and
    deliver new applications to address their network challenges.
    Expand Customer Base Regardless of Access
    Technology.  Service providers deploy video
    services to subscribers across networks based on coaxial, fiber
    and copper. We have successfully deployed our solutions across
    these access technologies. We are currently providing Verizon
    with a solution that allows both digital and analog transmission
    of video over fiber-optic lines. Other telecommunications
    companies deploying video services over existing DSL lines
    leverage our media processing expertise to provide such video
    services. Still others use our solutions to carry services over
    coaxial cable. We intend to leverage our media processing
    expertise to penetrate new customers worldwide, regardless of
    the type of access networks they use.
    Broaden Advanced Advertising Capabilities.  We
    currently enable service providers to insert video
    advertisements targeted to subscribers in specific geographic
    zones. We intend to collaborate with our customers to continue
    developing and deploying next-generation advertising solutions.  Solutions
   8




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Broadcast Video.
      TelcoTV.
  Switched Digital Video. and/or
  (DIAGRAM)

(DIAGRAM)  9




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Personalized Video.
  Management Software.
    Platforms
    and Technologies
  field-upgradeable
  BigBand Broadband Multimedia-Service Router
    (BMR).
  BigBand Broadband Edge QAM (BEQ).
 10




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BigBand Media Services Platform
    (MSP2000).
  Software
    Modules
    
    RateShaping.  Our RateShaping module combines
    digital signal processing and statistical multiplexing using
    complex algorithms to enable more video streams to be
    transported using the same amount of bandwidth. With
    RateShaping, we conserve bandwidth by intelligently allocating
    bandwidth to programs that require more, while reducing
    bandwidth to programs that require less. The diagram below
    depicts how our RateShaping module can take variable-rate video
    streams and adjust them to conform to a fixed amount of
    bandwidth capacity.  
  
    RateClamping.  The amount of bandwidth required
    to deliver a digital video program varies based on the
    complexity of the picture being transmitted within that program.
    For applications where a constant bit rate is desired, such as
    Switched Digital Video, RateClamping converts variable input
    feeds into constant bit rate streams, with the output bandwidth
    determined according to the service providers priorities.
    RateClamping is frequently utilized to deliver services such as
    VOD, Switched Digital Video and network-based digital video
    recorders. The diagram below depicts how our RateClamping module
    can convert variable-rate video streams into constant-rate video
    streams.  
  
    Splicing.  Our Splicing functionality allows an
    alternate program, usually an advertisement, to be seamlessly
    inserted into an existing video stream. Using our Splicing
    functionality, service providers can perform hundreds of
    concurrent splices of different ads to multiple advertising
    zones, targeting different neighborhoods, in a single BMR. Our
    Splicing functionality is integral to our Broadcast Video
    solution. 11




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
    Video over Ethernet.  Using our Video over
    Ethernet functionality, service providers can process and
    transmit digital video streams over IP inputs and outputs, which
    is less expensive than legacy video- specific interfaces, such
    as Asynchronous Serial Interface, or ASI. Ethernet, however, can
    cause latency problems in the network, which are particularly
    problematic in the delivery of video programming. Our Video over
    Ethernet functionality corrects the inherent timing effects
    introduced by Ethernet as it arrives in the BMR and encapsulates
    video into IP packets on video outputs.
    Encryption.  Our Encryption module scrambles
    the video stream and interfaces with a standards-based
    conditional access system to allow operators to secure their
    video content and restrict usage to only authorized subscribers.
    Program-level Redundancy.  Our Redundancy
    module inspects a video stream at the individual program level
    to detect errors and switches to the
    back-up
    source program without interrupting other programs on the same
    transport stream. By contrast, other competitive redundancy
    solutions do not detect problems with individual programs, which
    can result in a lower quality viewer experience.
    Metadata Processing.  Our applications process
    metadata such as the name of the program, plot summary and
    actors. This allows the service provider to actively control the
    type and amount of metadata that is provided to the
    subscribers television, thus enabling the service provider
    to populate program guide content and provide enhanced
    interactive TV functions.  Customers
    Brighthouse

Cox Communications

SuddenlinkCableone

Guangdong Tongke

SugysCablevision Systems

Imibluenet

Time Warner CableCharter Communications

Kabel Baden-Wurttemberg

VerizonComcast Cable Communications

RCN Telecom

Videotron      12




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Backlog
    Sales and
    Marketing
      Customer
    Service and Technical Support
    on-site
  Research
    and Development
   13




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Intellectual
    Property
          Manufacturing
    and Suppliers
       14




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Competition
    
    product performance, features, interoperability and reliability;
    technological expertise;
    relationships with service providers;
    price of products and services and cost of ownership;
    sales and distribution capabilities;
    customer service and support;
    compliance with industry standards and certifications;
    size and financial stability of operations;
    breadth of product line;
    intellectual property portfolio;
    ability to scale manufacturing; and
    ability to interoperate with other vendors.     15




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Employees
    By function:Servicing and manufacturing


93Research and development


248Sales and marketing


79General and administrative


65Total employees


485By location:United States


260Israel


179Rest of world


46Total employees


485     Financial
    Information About Segments and Geographic Areas
  Form 10-K.
  Additional
    Information
  1-800-SEC-0330.
  http://www.bigbandnet.com. Form 10-K, Form 10-Q Form 8-K, Form 10-K.
 16




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Item 1A.
    RISK
    FACTORS  An investment in our equity securities involves significant
    risks. Our business, prospects, financial condition or operating
    results could be materially adversely affected by any of these
    risks, as well as other risks not currently known to us or that
    we currently consider immaterial. The trading price of our
    common stock could decline due to any of these risks, and you
    may lose all or part of your investment. In assessing the risks
    described below, you should also refer to the other information
    contained in this Annual Report on
    Form 10-K,
    including our consolidated financial statements and the related
    notes, before deciding to purchase any shares of our common
    stock.
  We depend
    on cable operators and telecommunications companies adopting
    advanced technologies for substantially all of our net revenues,
    and any decrease or delay in capital spending for these advanced
    technologies would harm our operating results, financial
    condition and cash flows.
      
    available capital and access to financing;
    annual budget cycles;
    overall consumer demand for video services and the acceptance of
    newly introduced services;
    competitive pressures, including pricing pressures;
    changes in general economic conditions due to the recent
    fluctuations in the equity and credit markets or otherwise;
    the impact of industry consolidation;
    the strategic focus of our customers and potential customers;
    technology adoption cycles and network architectures of service
    providers, and evolving industry standards that may impact them;
    the status of federal, local and foreign government regulation
    of telecommunications and television broadcasting, and
    regulatory approvals that our customers need to obtain;
    discretionary customer spending patterns;
    bankruptcies and financial restructurings within the
    industry; and
    work stoppages or other labor-related issues that may impact the
    timing of orders and revenues from our customers.    Our
    operating results are likely to fluctuate significantly and may
    fail to meet or exceed the expectations of securities analysts
    or investors or our guidance, causing our stock price to
    decline.
    
    the level and timing of capital spending of our customers, both
    in the U.S. and in international markets;
    the timing, mix and amount of orders, especially from
    significant customers; 17




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
    changes in market demand for our products;
    our ability to secure significant orders from telecommunications
    companies;
    our mix of products sold;
    the mix of software and hardware products sold;
    our unpredictable and lengthy sales cycles, which typically
    range from three to eighteen months;
    the timing of revenue recognition on sales arrangements, which
    may include multiple deliverables;
    our ability to design, install and receive customer acceptance
    of our products;
    materially different acceptance criteria in master purchase
    agreements with key customers, which can result in large amounts
    of revenue being recognized, or deferred, as the different
    acceptance criteria are applied to large orders;
    new product introductions by our competitors;
    market acceptance of new or existing products offered by us or
    our customers;
    competitive market conditions, including pricing actions by our
    competitors;
    our ability to complete complex development of our software and
    hardware on a timely basis;
    unexpected changes in our operating expenses;
    the cost and availability of components used in our products;
    the potential loss of key manufacturer and supplier
    relationships;
    changes in domestic and international regulatory
    environments; and
    the impact of new accounting rules.    Our
    customer base is highly concentrated, and there are a limited
    number of potential customers for our products. The loss of any
    of our key customers would likely reduce our revenues
    significantly.
     18




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Declining
    general economic conditions may adversely affect our financial
    condition and results of operations and make our future business
    more difficult to forecast and manage.
      The
    markets in which we operate are intensely competitive, many of
    our competitors are larger, more established and better
    capitalized than we are, and some of our competitors have
    integrated products performing functions similar to our products
    into their existing network infrastructure offerings, and
    consequently our existing and potential customers may decide
    against using our products in their networks, which would harm
    our business.
     19




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We
    anticipate that our gross margins will fluctuate with changes in
    our product mix and expected decreases in the average selling
    prices of our hardware and software products, which may
    adversely impact our operating results.
    If
    revenues forecasted for a particular period are not realized in
    such period due to the lengthy, complex and unpredictable sales
    cycles of our products, our operating results for that or
    subsequent periods will be harmed.
    
    a significant technical evaluation period;
    a significant commitment of capital and other resources by
    service providers;
    substantial time required to engineer the deployment of new
    technologies for new video and voice services;
    substantial testing and acceptance of new technologies that
    affect key operations; and
    substantial test marketing of new services with subscribers.     20




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We may
    not accurately anticipate the timing of the market needs for our
    products and develop such products at the appropriate times at
    significant research and development expense, or we may not gain
    market acceptance of our several emerging video services and/or
    adoption of new network architectures and technologies, any of
    which could harm our operating results and financial
    condition.
          Our
    anticipated growth will depend significantly on our ability to
    deliver products that help enable telecommunications companies
    to provide video services. If the projected growth in demand for
    video services from telecommunications companies does not
    materialize or if these service providers find alternative
    methods of delivering video services, future sales of our Video
    products will suffer.
     21




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Our
    efforts to develop additional channels to market and sell our
    products and our expansion into international markets may not
    succeed.
    and/or and/or
      
    adverse conditions in the global economy;
    recent devaluations of local currencies in the markets we are
    attempting to penetrate may adversely affect the price
    competitiveness of our products;
    fluctuations in currency exchange rates, primarily fluctuations
    in the Israeli New Shekel, may have an adverse effect on our
    operating costs;
    political and economic instability;
    unpredictable changes in foreign government regulations and
    telecommunications standards;
    legal and cultural differences in the conduct of business;
    import and export license requirements, tariffs, taxes and other
    trade barriers;
    difficulty in collecting accounts receivable; 22




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
    potentially adverse tax consequences;
    the burden of complying with a wide variety of foreign laws,
    treaties and technical standards;
    difficulty in protecting our intellectual property;
    acts of war or terrorism and insurrections;
    difficulty in staffing and managing foreign operations; and
    changes in economic policies by foreign governments.    Our
    ability to sell our products is highly dependent on the quality
    of our support and services offerings, and our failure to offer
    high-quality support and services would have a material adverse
    effect on our sales and results of operations.
    If we
    fail to comply with new laws and regulations, or changing
    interpretations of existing laws or regulations, our future
    revenues could be adversely affected.
       23




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Regional
    instability in Israel may adversely affect business conditions
    and may disrupt our operations and negatively affect our
    operating results.
      We have
    been unable to achieve sustained profitability, which could
    adversely affect the price of our stock.
    We must
    manage any growth in our business effectively even if our
    infrastructure, management and resources might be
    strained.
   24




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Negative
    conditions in the global credit markets may impair the value or
    reduce the liquidity of a portion of our investment
    portfolio.
    We are
    exposed to fluctuations in currency exchange rates, which could
    negatively affect our financial results and cash
    flows.
        Our
    products must interoperate with many software applications and
    hardware found in our customers networks. If we are unable
    to ensure that our products interoperate properly, our business
    would be harmed.
     25




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We depend
    on a limited number of third parties to provide key components
    of, and to provide manufacturing and assembly services with
    respect to, our products.
      We are
    subject to securities class action lawsuits.
   26




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Accounting for
    Contingencies
        Our
    failure to adequately protect our intellectual property and
    proprietary rights, or to secure such rights on reasonable
    terms, may adversely affect us.
     27




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We may
    face intellectual property infringement claims from third
    parties.
    Our use
    of open source and third-party software could impose limitations
    on our ability to commercialize our products.
    Our
    business is subject to the risks of warranty returns, product
    liability and product defects.
   28




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We may
    engage in future acquisitions that dilute the ownership
    interests of our stockholders, cause us to incur debt or assume
    contingent liabilities.
    
    issue equity securities which would dilute current
    stockholders percentage ownership;
    incur substantial debt;
    assume contingent liabilities; or
    expend significant cash.    
    difficulties in the assimilation of acquired operations,
    technologies
    and/or
    products;
    unanticipated costs associated with the acquisition transaction;
    the diversion of managements attention from other business;
    adverse effects on existing business relationships with
    suppliers and customers;
    risks associated with entering markets in which we have no or
    limited prior experience;
    the potential loss of key employees of acquired businesses;
    difficulties in the assimilation of different corporate cultures
    and practices; and
    substantial charges for the amortization of certain purchased
    intangible assets, deferred stock compensation or similar items.    We are
    subject to import/export controls that could subject us to
    liability or impair our ability to compete in international
    markets.
   29




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If we do
    not adequately manage and evolve our financial reporting and
    managerial systems and processes, our operating results and
    financial condition may be harmed.
    While we
    believe that we currently have proper and effective internal
    control over financial reporting, we must continue to comply
    with laws requiring us to evaluate those internal
    controls.
    Accounting
    regulations related to equity compensation have adversely
    affected our earnings and could adversely affect our ability to
    attract and retain key personnel.
    Our
    business is subject to the risks of earthquakes, fire, floods
    and other natural catastrophic events, and to interruption by
    manmade problems such as computer viruses or
    terrorism.
   30




---



##### Table of Contents



Item 1B.
    UNRESOLVED
    STAFF COMMENTS    Item 2.
    PROPERTIES        Item 3.
    LEGAL
    PROCEEDINGS  Form 10-K.
  Item 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   PART II  Item 5.MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES
  Market
    Information for Common Stock
      Year EndedDecember 31, 2008High


LowFirst quarter

$
6.47


$
3.75Second quarter

$
7.96


$
4.64Third quarter

$
5.00


$
2.76Fourth quarter

$
6.03


$
2.36   31




---



##### Table of Contents



Year EndedDecember 31, 2007First quarter

$
18.19


$
16.66Second quarter

$
21.43


$
13.11Third quarter

$
15.55


$
6.40Fourth quarter

$
6.66


$
5.14   Dividend
    Policy
    Stockholders
    Recent
    Sales of Unregistered Securities
    Issuer
    Purchases of Equity Securities
   32




---



##### Table of Contents



Item 6.
    SELECTED
    FINANCIAL DATA  Form 10-K.
  Years Ended December 31,2008


2007


2006


2005


2004Consolidated Statement of Operations Data:Net revenues:Products

$
148,417


$
144,715


$
154,013


$
85,966


$
31,536Services


36,876



31,795



22,611



12,013



3,936Total net revenues


185,293



176,510



176,624



97,979



35,472Cost of net revenues:Products


60,207



76,260



74,152



55,933



21,300Services


12,755



13,414



9,245



3,900



2,221Total cost of net revenues


72,962



89,674



83,397



59,833



23,521Gross profitProducts


88,210



68,455



79,861



30,033



10,236Services


24,121



18,381



13,366



8,113



1,715Total gross profit


112,331



86,836



93,227



38,146



11,951Operating expenses:Research and development


54,043



51,862



37,194



30,701



21,582Sales and marketing


28,935



39,868



29,523



22,729



15,891General and administrative


20,884



16,286



13,176



6,984



5,782Restructuring charges


2,055



2,998











Amortization of intangible assets


733



572



572



573



286Gain on sale of intangible assets


(1,800
)














Class action lawsuit charges


1,504















In process research and development


















966Total operating expenses


106,354



111,586



80,465



60,987



44,507Operating income (loss)


5,977



(24,750
)


12,762



(22,841
)


(32,556
)Other income (expense)


6,203



608



(1,360
)


(1,696
)


(957
)Net income (loss) before provision for income taxes and
    cumulative effect of change in accounting principle


12,180



(24,142
)


11,402



(24,537
)


(33,513
)Provision for income taxes


2,400



1,225



2,525



325



250Net income (loss) before cumulative effect of change in
    accounting principle


9,780



(25,367
)


8,877



(24,862
)


(33,763
)Cumulative effect of change in accounting principle














(633
)


Net income (loss)

$
9,780


$
(25,367
)

$
8,877


$
(25,495
)

$
(33,763
)Basic net income (loss) per common share

$
0.15


$
(0.52
)

$
0.78


$
(2.36
)

$
(4.20
)Diluted net income (loss) per common share

$
0.15


$
(0.52
)

$
0.16


$
(2.36
)

$
(4.20
)Shares used in basic net income (loss) per common share


63,559



49,041



11,433



10,794



8,032Shares used in diluted net income (loss) per common share


67,264



49,041



57,053



10,794



8,032  33




---



##### Table of Contents



As of December 31,2008


2007


2006


2005


2004Consolidated Balance Sheet Data:Cash, cash equivalents and marketable securities

$
174,635


$
154,520


$
65,474


$
24,287


$
23,796Working capital


142,398



109,296



25,056



5,812



27,606Total assets


234,122



218,586



129,050



76,816



80,052Current and long-term debt










14,536



11,418



12,094Preferred stock warrant liabilities










3,152



1,642



Redeemable convertible preferred stock










117,307



117,307



118,204Common stock and additional paid-in capital


265,241



248,201



17,075



14,990



14,049Total stockholders equity (deficit)

$
138,419


$
111,586


$
(95,614
)

$
(107,819
)

$
(83,926
)   Item 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  The following discussion of our financial condition and
    results of operations should be read together with the
    consolidated financial statements and related notes that are
    included elsewhere in this
    Form 10-K.
    This discussion contains forward-looking statements, which are
    based upon current expectations that involve risks and
    uncertainties. Our actual results may differ materially from
    those anticipated in these forward-looking statements as a
    result of various factors, including those set forth under
    Risk Factors or in other parts of this
    Form 10-K.
  Overview
         34




---



##### Table of Contents



Net Revenues. 97-2, Software Revenue Recognition (SOP 97-2).
  Cost of Net Revenues.
  Gross Margin.
  Operating Expenses.
   35




---



##### Table of Contents



Critical
    Accounting Policies and Estimates
      Revenue
    Recognition
  SOP 97-2, Software Revenue Recognition, SOP 98-9, Modification of
    SOP 97-2,
    Software Revenue Recognition, With Respect to Certain
    Transactions,
 36




---



##### Table of Contents



if-and-when-available
        Inventories,
    Net
  first-in,
  Warranty
    Liabilities
   37




---



##### Table of Contents



Stock-Based
    Compensation
    Share-Based Payment
      Accounting
    for Stock Issued to Employees, Accounting for Certain Transactions Involving Stock
    Compensation, an Interpretation of APB No. 25,
 38




---



##### Table of Contents



Accounting for Stock-Based
    Compensation Accounting for Stock-Based
    Compensation  Transition and Disclosure
  No. 96-18, Accounting for Equity Instruments That Are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services,
  Allowances
    for Doubtful Accounts
    SOP 97-2
    Impairment
    of Long-lived Assets
     39




---



##### Table of Contents



Accounting
    for Income Taxes
      Accounting for Uncertainty in
    Income Taxes-an interpretation of FASB Statement No. 109
    20-year
 40




---



##### Table of Contents



Results
    of Operations
    Years Ended December 31,2008


2007


2006Total net revenues


100.0
%


100.0
%


100.0
%Total cost of net revenues


39.4



50.8



47.2Total gross profit


60.6



49.2



52.8Operating expenses:Research and development


29.2



29.4



21.1Sales and marketing


15.6



22.6



16.7General and administrative


11.3



9.2



7.5Restructuring charges


1.1



1.7



Amortization of intangible assets


0.4



0.3



0.3Gain on sale of intangible assets


(1.0
)






Class action lawsuit charges


0.8







Total operating expenses


57.4



63.2



45.6Operating income (loss)


3.2



(14.0
)


7.2Interest income


2.8



3.9



0.9Interest expense






(0.4
)


(1.0
)Other income (expense), net


0.6



(3.2
)


(0.7
)Income (loss) before provision for income taxes


6.6



(13.7
)


6.4Provision for income taxes


1.3



0.7



1.4Net income (loss)


5.3
%


(14.4
)%


5.0
%   Years
    Ended December 31, 2008 and 2007
  Net
    Revenues
        Product Revenues.
 41




---



##### Table of Contents



Service Revenues.
  Gross
    Profit and Gross Margin
  Gross profit.
  Product gross margin.
  Services gross margin.
  Operating
    Expenses
  Research and Development.
  Sales and Marketing.
  General and Administrative.
 42




---



##### Table of Contents



Restructuring Charges.
      Cost of net revenues

$
400Research and development


2,200Sales and marketing


1,000General and administrative


400Total estimated annualized savings

$
4,000   Gain on sale of intangible assets.
  Class action lawsuit charges. Accounting for Contingencies,
  Interest
    Income
   43




---



##### Table of Contents



Interest
    expense
    Other
    Income (Expense), Net
    Provision
    for Income Taxes
  with-and-without No. D-32, Intraperiod Tax Allocation of the Tax Effect of Pretax Income
    from Continuing Operations
    Years
    Ended December 31, 2007 and 2006
  Net
    Revenues
     44




---



##### Table of Contents



Gross
    Profit and Gross Margin
        Operating
    Expenses
  Research and Development.
  Sales and Marketing.
  General and Administrative.
  Restructuring Charges.
 45




---



##### Table of Contents



Other
    Expense, Net
  FSP 150-5.
  Provision
    for Income Taxes
   46




---



##### Table of Contents



Quarterly
    Results of Operations
  Form 10-K.
  Three Months EndedDecember 31,


September 30,


June 30,


March 31,


December 31,


September 30,


June 30,


March 31,2008


2008


2008


2008


2007


2007


2007


2007Net revenues:Products

$
44,229


$
38,337


$
33,888


$
31,963


$
22,856


$
29,942


$
46,261


$
45,656Services


9,864



9,946



9,123



7,943



7,807



8,608



8,202



7,178Total net revenues


54,093



48,283



43,011



39,906



30,663



38,550



54,463



52,834Cost of net revenues:Products


16,748



16,781



14,353



12,325



14,147



21,284



21,761



19,068Services


3,315



2,941



3,285



3,214



2,864



3,569



3,611



3,370Total cost of net revenues


20,063



19,722



17,638



15,539



17,011



24,853



25,372



22,438Gross profit


34,030



28,561



25,373



24,367



13,652



13,697



29,091



30,396Operating expenses:Research and development


13,613



13,218



12,809



14,403



12,243



12,869



13,678



13,072Sales and marketing


7,012



7,057



7,002



7,864



8,534



9,907



11,113



10,314General and administrative


5,285



5,411



5,360



4,828



4,981



3,668



4,115



3,522Restructuring charges


(175
)


737



1,158



335



2,998











Amortization of intangible assets


335



112



143



143



143



143



143



143Gain on sale of intangible assets


(1,800
)


























Class action lawsuit charges


1,504



























Total operating expenses


25,774



26,535



26,472



27,573



28,899



26,587



29,049



27,051Operating income (loss)


8,256



2,026



(1,099
)


(3,206
)


(15,247
)


(12,890
)


42



3,345Interest income


1,088



1,215



1,202



1,669



1,951



1,874



2,157



881Interest expense


















(28
)


(10
)


(271
)


(338
)Other (expense) income net


(273
)


(145
)


1,365



82



(185
)


(426
)


105



(5,102
)Income (loss) before provision for (benefit from) income taxes


9,071



3,096



1,468



(1,455
)


(13,509
)


(11,452
)


2,033



(1,214
)Provision for (benefit from) income taxes


1,749



(35
)


221



465



291



793



378



(237
)Net income (loss)

$
7,322


$
3,131


$
1,247


$
(1,920
)

$
(13,800
)

$
(12,245
)

$
1,655


$
(977
)Basic net income (loss) per common share

$
0.11


$
0.05


$
0.02


$
(0.03
)

$
(0.23
)

$
(0.21
)

$
0.03


$
(0.05
)Diluted net income (loss) per common share

$
0.11


$
0.05


$
0.02


$
(0.03
)

$
(0.23
)

$
(0.21
)

$
0.02


$
(0.05
)Shares used in basic net income (loss) per common share


64,359



64,061



63,400



62,397



60,741



58,821



58,140



18,341Shares used in diluted net income (loss) per common share


67,412



67,116



67,548



62,397



60,741



58,821



70,764



18,341  47




---



##### Table of Contents



Liquidity
    and Capital Resources
  Overview
    Cash
    Flow
  Operating
    activities
    Years Ended December 31,2008


2007


2006Net income (loss)

$
9,780


$
(25,367
)

$
8,877Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:


20,494



27,076



10,645Net income including adjustments


30,274



1,709



19,522Decrease (increase) in trade receivables


1,494



6,133



(18,174
)Decrease in inventories, net


709



321



14,371(Decrease) increase in deferred revenues


(6,726
)


16,686



21,808(Decrease) increase in accounts payable and accrued and other
    liabilities


(2,332
)


(2,063
)


12,043Other, net


115



(1,924
)


(804
)Net cash provided by operating activities

$
23,534


$
20,862


$
48,766       Investing
    Activities
     48




---



##### Table of Contents



Financing
    Activities
        Liquidity
    and Capital Resource Requirements
    Contractual
    Obligations and Commitments
    Payments due by Period:Less Than one year

$
2,8341-3 years


4,9043-5 years


1,713More than 5 years


Total obligations

$
9,451   Off-Balance
    Sheet Arrangements
  Regulation S-K.
  Effects
    of Inflation
   49




---



##### Table of Contents



Recent
    Accounting Pronouncements
  Form 10-K
  Item 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK  Interest
    Rate Sensitivity
    Foreign
    Currency Risk
   50




---



##### 



Item 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Index to
    Consolidated Financial Statements
     
 Report of Independent Registered Public
    Accounting Firm


52Consolidated Balance Sheets


53Consolidated Statements of Operations


54Consolidated Statements of Redeemable Convertible
    Preferred Stock and Stockholders Equity (Deficit)


55Consolidated Statements of Cash Flows


56Notes to Consolidated Financial Statements


57   51




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED
    PUBLIC ACCOUNTING FIRM           Accounting for Uncertainty
    in Income Taxes, an interpretation of FASB Statement
    No. 109,
    ERNST
    AND YOUNG LLP
    52




---



##### Table of Contents



BigBand
    Networks, Inc.
  Consolidated
    Balance Sheets
  As of December 31,2008


2007(In thousands, except per share data)ASSETSCurrent assets:Cash and cash equivalents

$
50,981


$
55,162Marketable securities


123,654



99,358Trade receivables, net of allowance for doubtful accounts of $39
    and $142 as of December 31, 2008 and 2007, respectively


26,361



27,855Inventories, net


6,123



6,832Prepaid expenses and other current assets


3,716



4,012Total current assets


210,835



193,219Property and equipment, net


15,358



17,432Goodwill and other intangible assets, net


1,656



2,390Other non-current assets


6,273



5,545Total assets

$
234,122


$
218,586LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
8,350


$
13,811Accrued compensation and related benefits


11,433



6,475Current portion of deferred revenues, net


39,433



48,256Current portion of other liabilities


9,221



15,381Total current liabilities


68,437



83,923Deferred revenues, net, less current portion


21,129



19,032Other liabilities, less current portion


2,392



857Accrued long-term Israeli severance pay


3,745



3,188Commitments and contingenciesStockholders equity:Common stock, $0.001 par value, 250,000 shares
    authorized as of December 31, 2008 and December 31,
    2007; 64,639 and 61,907 shares issued and outstanding as of
    December 31, 2008 and December 31, 2007, respectively


65



62Additional paid-in capital


265,176



248,139Deferred stock-based compensation






(203
)Accumulated other comprehensive income


58



248Accumulated deficit


(126,880
)


(136,660
)Total stockholders equity


138,419



111,586Total liabilities and stockholders equity

$
234,122


$
218,586    53




---



##### Table of Contents



BigBand
    Networks, Inc.
  Consolidated
    Statements of Operations
  Years Ended December 31,2008


2007


2006(In thousands, except per share amounts)Net revenues:Products

$
148,417


$
144,715


$
154,013Services


36,876



31,795



22,611Total net revenues


185,293



176,510



176,624Cost of net revenues:Products


60,207



76,260



74,152Services


12,755



13,414



9,245Total cost of net revenues


72,962



89,674



83,397Gross profit


112,331



86,836



93,227Operating expenses:Research and development


54,043



51,862



37,194Sales and marketing


28,935



39,868



29,523General and administrative


20,884



16,286



13,176Restructuring charges


2,055



2,998



Amortization of intangible assets


733



572



572Gain on sale of intangible assets


(1,800
)






Class action lawsuit charges


1,504







Total operating expenses


106,354



111,586



80,465Operating income (loss)


5,977



(24,750
)


12,762Interest income


5,174



6,863



1,526Interest expense






(648
)


(1,699
)Other income (expense), net


1,029



(5,607
)


(1,187
)Income (loss) before provision for income taxes


12,180



(24,142
)


11,402Provision for income taxes


2,400



1,225



2,525Net income (loss)

$
9,780


$
(25,367
)

$
8,877Basic net income (loss) per common share

$
0.15


$
(0.52
)

$
0.78Diluted net income (loss) per common share

$
0.15


$
(0.52
)

$
0.16Shares used in basic net income (loss) per common share


63,559



49,041



11,433Shares used in diluted net income (loss) per common share


67,264



49,041



57,053    54




---



##### Table of Contents



BigBand
    Networks, Inc.
  Consolidated
    Statements of Redeemable Convertible Preferred Stock and
    Stockholders Equity (Deficit)
  Redeemable





















AccumulatedConvertible



Common Stock





Deferred


OtherPreferred Stock



Class A


Class B


Additional


Stock-Based


Comprehensive


Accumulated


StockholdersShares


Amount



Shares


Amount


Shares


Amount


Paid-in Capital


Compensation


Income (Loss)


Deficit


Equity(In thousands)Balance as of December 31, 2005


29,439


$
117,307




7,533


$
8



3,619


$
4


$
14,978


$
(2,621
)

$
(18
)

$
(120,170
)

$
(107,819
)Stock options issued to non-employees



























26















26Stock-based compensation



























1,422















1,422Amortization of deferred stock-based compensation, net of
    reversals



























(114
)


1,216











1,102Proceeds from exercise of class A common stock options











708















751















751Comprehensive income:











































Unrealized gain on marketable securities



































27







27Net income







































8,877



8,877Total comprehensive income











































8,904Balance as of December 31, 2006


29,439



117,307




8,241



8



3,619



4



17,063



(1,405
)


9



(111,293
)


(95,614
)Conversion of class B common stock into class A common
    Stock











3,619



4



(3,619
)


(4
)


















Conversion of preferred stock into class A common stock


(29,439
)


(117,307
)



37,762



38











117,269















117,307Proceeds from initial public offering, net of expenses











7,500



8











87,761















87,769Reclassification of preferred stock warrant liabilities to APIC
    upon IPO



























8,125















8,125Proceeds from exercise of class A common stock options











4,056



4











4,684















4,688Proceeds from issuance of common stock under employee stock
    purchase plan











213















1,089















1,089Tax benefit from stock options



























25















25Stock-based compensation











12















10,408















10,408Net exercise for payment of tax liability for employee



























(113
)














(113
)Amortization of deferred stock-based compensation, net of
    reversals



























(335
)


1,202











867Stock-based compensation related to non-employees in exchange
    for services











2















341















341Exercise of warrants











502















1,822















1,822Comprehensive loss:Net unrealized gains on cash flow hedges



































42







42Net unrealized gain on marketable securities



































194







194Net realized gain on cash flow hedges



































3







3Net loss







































(25,367
)


(25,367
)Total comprehensive loss











































(25,128
)Balance as of December 31, 2007











61,907



62











248,139



(203
)


248



(136,660
)


111,586Proceeds from exercise of class A common stock options











2,275



2











3,753















3,755Proceeds from issuance of common stock under employee stock
    purchase plan











362



1











1,483















1,484Exercise of restricted stock units, net











27































Tax benefit from stock options



























158















158Stock-based compensation



























11,695















11,695Net exercise for payment of tax liability for employee



























(29
)














(29
)Amortization of deferred stock-based compensation, net of
    reversals



























(23
)


203











180Exercise of warrants  cashless











68































Comprehensive income:











































Net unrealized losses on cash flow hedges



































(340
)






(340
)Net unrealized gains on marketable securities



































476







476Net realized losses on cash flow hedges



































(326
)






(326
)Net income







































9,780



9,780Total comprehensive income











































9,590Balance as of December 31, 2008





$





64,639


$
65






$



$
265,176


$



$
58


$
(126,880
)

$
138,419    55




---



##### Table of Contents



BigBand
    Networks, Inc.
  Consolidated
    Statements of Cash Flows
  Years Ended December 31,2008


2007


2006(In thousands, except per share amounts)Cash Flows from Operating activitiesNet income (loss)

$
9,780


$
(25,367
)

$
8,877Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depreciation of property and equipment


9,833



9,771



6,148Amortization of intangible assets


733



572



572Gain on sale of intangible assets  Fast Flow
    technology


(1,800
)






Gain on sale of investment










(592
)Amortization of debt issuance costs










379Loss on disposal of property and equipment


337



165



78Revaluation of warrant liabilities






4,974



1,510Stock-based compensation


11,695



10,749



1,448Amortization of deferred stock-based compensation


180



867



1,102Tax benefit from stock options


(158
)


(25
)


(Decrease) increase in net realized gains (losses) on cash flow
    hedges


(326
)


3



Change in operating assets and liabilities:Decrease (increase) in trade receivables


1,494



6,133



(18,174
)Decrease in inventories, net


709



321



14,371Decrease (increase) in prepaid expenses and other current assets


292



(1,501
)


(541
)Increase in other non-current assets


(734
)


(867
)


(1,024
)(Decrease) increase in accounts payable


(3,161
)


(1,286
)


4,761Increase in long-term Israeli severance pay


557



444



761Increase (decrease) in accrued and other liabilities


829



(777
)


7,282(Decrease) increase in deferred revenues


(6,726
)


16,686



21,808Net cash provided by operating activities


23,534



20,862



48,766Cash Flows from Investing activitiesPurchases of marketable securities


(202,829
)


(170,460
)


(46,925
)Proceeds from maturities of marketable securities


151,154



78,445



26,969Proceeds from sale of marketable securities


27,854



19,800



Proceeds from sale of intangible assets  Fast Flow
    technology


1,800







Proceeds from sale of other investment










592Purchase of property and equipment


(11,077
)


(12,320
)


(10,943
)Proceeds from sale of property and equipment


9



40



Decrease (increase) in restricted cash


6



(505
)


87Net cash used in investing activities


(33,083
)


(85,000
)


(30,220
)Cash Flows from Financing activitiesProceeds from loans










16,800Principal payments on loans and capital leases






(14,550
)


(14,222
)Payments in preparation for an initial public offering of the
    Companys class A common stock










(671
)Proceeds from exercise of warrants to purchase class A
    common stock






1,822



Proceeds from exercise of common stock options, net of tax
    liability


3,726



4,575



751Proceeds from issuance of common stock under employee stock plans


1,484



1,089



Proceeds from initial public offering, net of expenses






87,769



Tax benefit from stock options


158



25



Net cash provided by financing activities


5,368



80,730



2,658Net (decrease) increase in cash and cash equivalents


(4,181
)


16,592



21,204Cash and cash equivalents as of beginning of year


55,162



38,570



17,366Cash and cash equivalents as of end of year

$
50,981


$
55,162


$
38,570Schedule of non-cash transactionsEquipment acquired under loan agreement

$



$



$
480Accrued leasehold improvements

$



$
2,300


$
Supplemental disclosure of cash flow informationInterest paid

$



$
514


$
1,398Income taxes paid

$
2,874


$
3,945


$
360    56




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Description
    of Business    2.
    Significant
    Accounting Policies  Principles
    of Consolidation
    Use of
    Estimates
    Reclassifications
    Revenue
    Recognition
  97-2, Software Revenue Recognition, SOP 98-9, Modification of
    SOP 97-2,
    Software Revenue Recognition, With Respect to Certain
    Transactions,
    if-and-when-available
 57




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Cash
    and Cash Equivalents
    Marketable
    Securities
   58




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair
    Value of Financial Instruments
    Concentrations
    of Credit Risk
      Percentage of Total TradeReceivables as of


Percentage of Net Revenues forDecember 31,


the Years Ended December 31,Customers

2008


2007


2008


2007


2006A


*



19



14



11



13B


*



*



*



*



10C


64



18



27



13



19D


16



*



29



40



32E


*



22



*



*



*     *
    
    Represents less than 10%   59




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Balance at


Charged toBeginning of


Costs and


Deductions-


Balance atYear


Expenses


Write-offs


End of YearYear ended:December 31, 2008

$
142


$
64


$
(167
)

$
39December 31, 2007

$
152


$
99


$
(109
)

$
142December 31, 2006

$
23


$
129


$



$
152   Inventories,
    Net
  work-in-process, first-in,
  Property
    and Equipment, Net
    Useful lifeEngineering and other equipment

5 yearsComputers, software and related equipment

3 yearsLeasehold improvements

Shorter of lease term or estimated useful life of the assetOffice furniture and fixtures

5 years     Intangible
    Assets
   60




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Impairment
    of Long-Lived Assets
    Goodwill
    Warranty
    Liabilities
    Software
    Development Costs
    Accounting
    for Income Taxes
  Accounting
    for Uncertainty in Income Taxes  an interpretation of
    FASB Statement No. 109 Accounting for Income Taxes
 61




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Hedging
    Instruments
    Accounting for Derivative Instruments and Hedging Activities
   62




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Israeli
    Severance Pay
  EITF 88-1, Determination of Vested Benefit Obligation for a Defined
    Benefit Pension Plan,
  Stock-based
    Compensation
  Share-Based Payment
  Accounting for Stock Issued to Employees, Accounting for Certain Transactions Involving Stock
    Compensation, an Interpretation of APB No. 25, Accounting for Stock-Based
    Compensation, Accounting for
    Stock-Based Compensation  Transition and Disclosure,
 63




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years Ended December 31,2008


2007


2006Cost of net revenues

$
1,733


$
1,534


$
336Research and development


3,901



3,837



1,035Sales and marketing


2,566



4,184



637General and administrative


3,675



2,061



542Total operating expenses

$
11,875


$
11,616


$
2,550   Foreign
    Currency Translation
    Comprehensive
    Income (Loss)
  Reporting
    Comprehensive Income
  As of December 31,2008


2007Net unrealized (loss) gain on cash flow hedges

$
(621
)

$
45Net unrealized gain on marketable securities


679



203Total accumulated other comprehensive income

$
58


$
248   Research
    and Development
    Advertising
    Costs
    Other
    Income (Expense), Net
   64




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Preferred
    Stock Warrants
  No. 150-5, Issuers Accounting under Statement No. 150 for
    Freestanding Warrants and Other similar Instruments on Shares
    that are Redeemable (FSP 150-5), Accounting
    for Certain Financial Instruments with Characteristics of Both
    Liabilities and Equity
    Recently
    Issued Accounting Standards
  Disclosures about Derivative Instruments and Hedging
    Activities  an amendment of FASB Statement
    No. 133
  FAS 157-2, Effective Date of FASB Statement No. 157 (FSP 157-2), Fair Value Measurement FSP 157-2 FSP 157-2 FSP 157-2
  Business Combinations
 65




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3.
    Basic and
    Diluted Net Income (Loss) per Share    Years Ended December 31,2008


2007


2006Numerator:Net income (loss)

$
9,780


$
(25,367
)

$
8,877Denominator:Weighted average shares used in basic net income (loss) per
    common share


63,559



49,041



11,433Stock options


3,506







7,632Warrants


188







226Employee stock purchase plan shares


11







Conversion of redeemable convertible preferred stock










37,762Weighted average shares used in diluted net income (loss) per
    common share


67,264



49,041



57,053Basic net income (loss) per common share

$
0.15


$
(0.52
)

$
0.78Diluted net income (loss) per common share

$
0.15


$
(0.52
)

$
0.16     As of December 31,2008


2007


2006Stock options outstanding


8,572



13,851



4,410Employee stock purchase plan shares


243







Restricted stock units


215



356



Conversion of warrants to purchase redeemable convertible
    preferred stock










160Warrants to purchase common stock






428



401   4.
    Restructuring
    Charges  2007
    Restructuring
   66




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008
    Restructuring
    Restructuring
    summary
    Vacated


Severance and





TotalFacilities


Related


Other


RestructuringCosts


Expenses


Costs


LiabilitiesBalance, December 31, 2006

$



$



$



$
Charges


665



2,193



140



2,998Adjustments


62











62Cash Payments


(101
)


(1,462
)


(34
)


(1,597
)Balance, December 31, 2007


626



731



106



1,463Charges


1,494



542



19



2,055Adjustments


(601
)










(601
)Cash Payments


(823
)


(1,273
)


(125
)


(2,221
)Balance, December 31, 2008

$
696


$



$



$
696Less restructuring liability, current portion














(522
)Restructuring liability, less current portion













$
174       5.
    Fair
    Value  Fair Value Measurements,
 67




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Level 1


Level 2


Level 3


TotalMoney market funds

$
30,092


$



$



$
30,092U.S. Agency debt securities






59,300







59,300Corporate debt securities






45,377







45,377Commercial paper






32,923







32,923Municipal debt securities (taxable)






994







994Total fair value

$
30,092


$
138,594


$



$
168,686   6.
    Balance
    Sheet Data  Marketable
    Securities
    As of December 31, 2008Amortized


Unrealized


Unrealized


EstimatedCosts


Gains


Losses


Fair ValueU.S. Agency debt securities

$
54,852


$
444


$



$
55,296Corporate debt securities


44,247



239



(108
)


44,378Commercial paper


22,885



101







22,986Municipal debt securities (taxable)


1,000







(6
)


994Total marketable securities

$
122,984


$
784


$
(114
)

$
123,654   As of December 31, 2007Amortized


Unrealized


Unrealized


EstimatedCosts


Gains


Losses


Fair ValueU.S. Agency debt securities

$
14,494


$
15


$
(2
)

$
14,507Corporate debt securities


35,048



104



(10
)


35,142Commercial paper


36,763



93



(4
)


36,852Auction rate securities


11,650











11,650Municipal debt securities (taxable)


1,200



7







1,207Total marketable securities

$
99,155


$
219


$
(16
)

$
99,358    68




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    As of December 31,2008


2007Due within one year

$
88,118


$
75,120Due within one to two years


35,536



24,238Total marketable securities

$
123,654


$
99,358   Inventories,
    net
    As of December 31,2008


2007Finished products

$
6,085


$
6,611Work-in-progress






172Raw materials, parts, supplies


38



49Total inventories, net

$
6,123


$
6,832   Property
    and Equipment, Net
    As of December 31,2008


2007Engineering and other equipment

$
29,463


$
24,984Computers, software and related equipment


18,973



15,489Leasehold improvements


5,745



5,991Office furniture and fixtures


1,192



1,37255,373



47,836Less: accumulated depreciation


(40,015
)


(30,404
)Total property, plant and equipment

$
15,358


$
17,432    69




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Goodwill
    Other
    Non-current Assets
    As of December 31,2008


2007Israeli severance pay

$
2,661


$
2,178Security deposit


2,125



1,692Restricted cash


745



751Deferred tax assets


644



551Other


98



373Total other non-current assets

$
6,273


$
5,545     Deferred
    Revenues, net
    As of December 31,2008


2007Deferred service revenues, net

$
39,675


$
37,279Deferred product revenues, net


20,887



30,009Total deferred revenues, net


60,562



67,288Less current portion of deferred revenues, net


(39,433
)


(48,256
)Deferred revenues, net, less current portion

$
21,129


$
19,032   Other
    Liabilities
    As of December 31,2008


2007Rent and restructuring liabilities

$
1,602


$
1,530Foreign, franchise, and other income tax liabilities


2,071



1,886Accrued warranty


3,381



4,359Accrued class action lawsuit charges


1,504



Accrued professional fees


721



976Sales and use tax payable


831



1,367Customer prepayments


155



3,274Other


1,348



2,846Total other liabilities


11,613



16,238Less other liabilities, current portion


(9,221
)


(15,381
)Other liabilities, less current portion

$
2,392


$
857  70




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accrued
    Warranty
    Years Ended December 31,2008


2007Balance at beginning of year

$
4,359


$
4,136Warranty charged to cost of sales


1,275



2,933Utilization of warranty


(1,554
)


(2,573
)Other adjustments


(699
)


(137
)Balance at end of year


3,381



4,359Less accrued warranty, current portion


(1,669
)


(3,502
)Accrued warranty, less current portion

$
1,712


$
857   7.
    Commitments
    and Contingencies  Commitments
    Years ending December 31,2009

$
2,8342010


2,4682011


2,4362012


1,5952013


118Total minimum lease payments

$
9,451       Years Ending December 31,2009

$
4052010


4052011


4052012


4052013


25Total minimum lease payments

$
1,645  71




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Legal
    Proceedings
  In re
    BigBand Networks, Inc. Securities Litigation, Case No. C
    07-5101-SBA
  Accounting for Contingencies
  Wiltjer v.
    BigBand Networks, Inc., et. Al., Cast
    No. CGC-07-469661
    Ifrah v.
    Bassan-Eskenazi, et. Al., Case No. 468401
   72




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  BigBand
    Networks, Inc. v. Imagine Communications, Inc., Case
    No. 07-351
    Indemnities
    Customer
    Bankruptcy
  SOP 97-2
    8.
    Stockholders
    Equity  1-for-4
  Initial
    Public Offering
   73




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    1-for-1 share
  Common
    Stock Warrants
    December 31, 2008

December 31, 2007Exercise



ExercisePrice per

Share

Price per

SharesExpiration Date

Share

Unexercised

Share

UnexercisedFebruary 20, 2010

$
1.79



268


$
1.79



268June 29, 2011

$







$
4.37



160     Equity
    Incentive Plans
     74




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    WeightedNumber


Average


Weighed Average


Aggregateof


Exercise


Remaining


IntrinsicOptions


Price


Contractual Life


ValueOutstanding at December 31, 2005


11,093


$
1.02



8.14


$
13,141Granted


6,284



4.39Exercised


(708
)


1.08Cancelled


(649
)


1.64Outstanding at December 31, 2006


16,020


$
2.31



8.09


$
55,194Granted


3,846



7.58Exercised


(4,055
)


1.15Cancelled


(1,960
)


4.14Outstanding at December 31, 2007


13,851


$
3.85



7.33


$
26,651Granted


3,505



4.86Exercised


(2,275
)


1.65Cancelled


(2,051
)


5.97Outstanding at December 31, 2008


13,030


$
4.17



7.58


$
22,978Vested and expected to vest


12,592







7.53


$
22,711     Options Outstanding


Options ExercisableWeighted AverageRemainingContractual Life


Weighted Average


No. Shares


Weighted AverageExercise Price ($)

Number


(Years)


Exercise Price


Exercisable


Exercise Price0.20 - 1.00


3,073



5.00


$
0.79



3,070


$
0.791.32 - 2.60


1,533



6.55



2.04



1,074



1.993.08 - 5.28


4,442



8.78



4.84



1,059



5.175.36 - 7.34


3,556



8.69



6.00



1,053



6.159.33 - 13.12


234



8.27



11.13



111



11.1814.85 - 18.95


192



8.05



17.35



88



17.4813,030



7.58


$
4.17



6,455


$
2.99    75




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Stock-Based
    Compensation
    Years Ended December 31,2008

2007

2006Stock OptionsExpected volatility

63-71%

75-91%

91-98%Expected term

6 years

6 years

6 yearsRisk-free interest

2.40-3.31%

3.89-4.75%

4.57-4.96%Expected dividends

0.0%

0.0%

0.0%Stock Purchase PlanExpected volatility

59-102%

55-90%

Expected term

0.5 years

0.5-0.6 years

Risk-free interest

0.74-1.87%

3.71-5.12%

Expected dividends

0.0%

0.0%

0.0%       Restricted
    Stock Units
   76




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    WeightedWeighted


AverageRestricted


Average


Remaining


AggregateStock


Grant-Date


Contractual


IntrinsicUnits


Fair Value


Life


ValueOutstanding, December 31, 2006





$
Granted


406



15.14Cancelled


(50
)


18.95Outstanding, December 31, 2007


356


$
14.61



2.23


$
1,832Granted


319



5.35Exercised


(27
)


5.56Cancelled


(80
)


18.95Outstanding, December 31, 2008


568


$
9.38



1.24


$
3,138Vested and expected to vest


535







1.20


$
2,953   Employee
    Stock Purchase Plan
    Shares
    Reserved
    December 31,2008


2007ESPP shares reserved for future issuance


1,662



356Restricted stock units


568



428Warrants to purchase common stock


268



787Stock options:Outstanding


13,030



13,851Reserved for future grants


7,298



5,90622,826



21,328  77




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Preferred
    Stock
    9.
    Segment
    Reporting  Disclosures about Segments of an
    Enterprise and Related Information,
    Years Ended December 31,2008


2007


2006United States

$
169,397


$
146,835


$
157,466Americas excluding United States


3,905



1,393



4,051Asia


6,648



13,670



3,082Europe


5,343



14,612



12,025Total net revenues

$
185,293


$
176,510


$
176,624       Years Ended December 31,2008


2007


2006Video

$
145,517


$
121,046


$
121,937Data


2,900



23,669



32,076Total product net revenues

$
148,417


$
144,715


$
154,013     Years Ended December 31,2008


2007


2006Video

$
30,811


$
23,009


$
12,745Data


6,065



8,786



9,866Total service net revenues

$
36,876


$
31,795


$
22,611  78




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    As of December 31,2008


2007United States

$
8,859


$
9,358Israel


6,305



7,752Rest of World


194



322Total long-lived assets

$
15,358


$
17,432   10.
    Income
    Taxes    Years Ended December 31,2008


2007


2006Domestic

$
8,833


$
(25,755
)

$
9,868Foreign


3,347



1,613



1,534Net income (loss) before provision for income taxes

$
12,180


$
(24,142
)

$
11,402     Years Ended December 31,2008


2007


2006CurrentFederal

$
199


$



$
376State


669



(48
)


112Foreign


1,578



1,228



2,5442,446



1,180



3,032DeferredFederal


40



38



39State


7



6



6Foreign


(93
)


1



(552
)(46
)


45



(507
)Total provision for income taxes

$
2,400


$
1,225


$
2,525  79




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years Ended December 31,2008


2007


2006Tax provision (benefit) at federal statutory rate

$
4,263


$
(8,450
)

$
3,850U.S. losses not benefited (net operating loss carryforward
    utilized)


(2,668
)


7,113



(3,445
)Foreign operations


1,523



618



1,370State taxes


441



(27
)


77Research and development tax credits


(510
)


(1,037
)


(1,485
)Stock-based compensation


(797
)


1,127



756Warrant amortization






1,741



842Permanent items


148



140



560Provision for income taxes

$
2,400


$
1,225


$
2,525     As of December 31,2008


2007Deferred tax assets:Reserves and accruals

$
13,615


$
12,818Stock compensation


2,883



1,266Depreciation and amortization


1,652



2,267Net operating loss carryforwards


23,810



30,314Tax credit carryforwards


4,091



3,400Total deferred tax assets


46,051



50,065Deferred tax liabilities:Goodwill


(202
)


(154
)Gross deferred taxes


45,849



49,911Valuation allowance


(45,407
)


(49,514
)Net deferred taxes

$
442


$
397      80




---



##### Table of Contents



BIGBAND
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  non-U.S. subsidiaries
  No. D-32, Intraperiod Tax Allocation of the Tax Effect of Pretax Income
    from Continuing Operations
  Accounting for Uncertainty in
    Income Taxes-an interpretation of FASB Statement No. 109
  Years Ended December 31,2008


2007Balance at beginning of year

$
1,405


$
1,319Tax positions related to current year


531



532Tax positions related to prior years


368



(446
)Balance at end of year

$
2,304


$
1,405   11.
    401(k)
    Savings and Retirement Plan    12.
    Subsequent
    events (Unaudited)   81




---



##### Table of Contents



Item 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    Item 9A.
    CONTROLS
    AND PROCEDURES  Evaluation
    of Disclosure Controls and Procedures
  Form 10-K, Rule 13a-15 Rule 15d-15 Rules 13a-15(e) 15d-15(e)
  Managements
    Report on Internal Control over Financial Reporting
          Changes
    in Internal Control over Financial Reporting
  Rule 13a-15 Rule 15d-15
 82




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED
  PUBLIC
    ACCOUNTING FIRM
                 
    83




---



##### Table of Contents



Item 9B.
    Other
    Information   PART III  Item 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE        http://www.bigbandnet.com
    Item 11.
    EXECUTIVE
    COMPENSATION    Item 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    Item 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    Item 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES   84




---



##### Table of Contents



PART IV  Item 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  ( Form 10-K.
  Form 10-K
  Exhibits.
 EXHIBIT INDEX
  Incorporated by ReferenceExhibit





File

Exhibit




Filed withNumber

Description

Form

Number

Number




This 10-K3
.1

Form of Amended and Restated Certificate of Incorporation of the
    Registrant

S-1

333-139652


3.1B


December 22, 20063
.2

Form of Amended and Restated Bylaws of the Registrant

S-1

333-139652


3.2B


December 22, 200610
.1*

Form of Indemnification Agreement

S-1

333-139652


10.1


December 22, 200610
.2*

1999 Share Option and Incentive Plan

S-1

333-139652


10.2


December 22, 200610
.3*

2001 Share Option and Incentive Plan

S-1

333-139652


10.3


December 22, 200610
.4*

2003 Share Option and Incentive Plan

S-1

333-139652


10.4


December 22, 200610
.5*

2004 Share Option and Incentive Plan Sub-Plan for Israeli
    Employees

S-1

333-139652


10.5


December 22, 200610
.6*

2007 Equity Incentive Plan

S-1/A

333-139652


10.6


March 8, 200710
.6A*

Form of Option Agreement (U.S.)

10-Q

001-33355


10.6A


August 8, 200710
.6B*

Form of Option Agreement
    (Non-U.S.)

10-Q

001-33355


10.6B


August 8, 200710
.6C*

Form of Restricted Stock Unit Agreement (U.S.)

10-Q

001-33355


10.6C


August 8, 200710
.6D*

Form of Restricted Stock Unit Agreement
    (Non-U.S.)

10-Q

001-33355


10.6D


August 8, 200710
.6E*

2007 Equity Incentive Plan Sub-Plan for Israeli Employees

10-Q

001-33355


10.6E


August 8, 200710
.6F*

Form of Israeli Sub-Plan Option Agreement

10-Q

001-33355


10.6F


August 8, 200710
.7*

Employee Stock Purchase Plan

S-1/A

333-139652


10.7


February 26, 200710
.8*

Employment Agreement Amir Bassan-Eskenazi

S-1

333-139652


10.8


December 22, 200610
.9A*

Amendment to Offer Letter Agreement  Ran Oz

10-Q

001-33355


10.9A


May 15, 200810
.10*

Offer Letter Agreement  Maurice Castonguay

10-K

001-33355


10.10


March 12, 200810
.11*

Offer Letter Agreement  David Heard

S-1/A

333-139652


10.23


February 26, 200710
.11A*

Amendment to Offer Letter Agreement  David Heard

10-K

001-33355


10.11A


March 12, 200810
.12*

Offer Letter Agreement  Robert Horton

S-1/A

333-139652


10.12


January 26, 200710
.12A*

Amendment to Offer Letter Agreement  Robert Horton

10-K

001-33355


10.12A


March 12, 2008 85




---



##### Table of Contents



Incorporated by ReferenceExhibit





File

Exhibit




Filed withNumber

Description

Form

Number

Number




This 10-K10
.13*

Separation Agreement  Jeffrey Lindholm

10-Q

001-33355


10.13B


November 12, 200810
.15*

Letter Agreement  Ken Goldman

S-1

333-139652


10.15


December 22, 200610
.16*

Letter Agreement  Robert Sachs

S-1

333-139652


10.16


December 22, 200610
.17A

Lease (475 Broadway, Redwood City, California)

S-1

333-139652


10.17A


December 22, 200610
.17B

First Amendment to Lease (475 Broadway, Redwood City,
    California)

S-1

333-139652


10.17B


December 22, 200610
.17C

Second Amendment to Lease (475 Broadway, Redwood City,
    California)

S-1

333-139652


10.17C


December 22, 200610
.20

Lease (8 Technology Drive, Westborough, Massachusetts)

S-1

333-139652


10.20


December 22, 200610
.21

Lease Agreement (Tel Aviv, Israel)

S-1

333-139652


3.2B


December 22, 200610
.21A

Addendum to Lease Agreement

10-Q

001-33355


10.21B


May 9, 200710
.23*

Transition Services Agreement  Fred Ball

8-K

001-33355


10.23


October 18, 200710
.24

Lease Agreement (Tel Aviv, Israel)

8-K

001-33355


99.1


July 30, 200710
.24A

Amendment to Lease Agreement (Tel Aviv, Israel)

10-K

001-33355


10.24A


March 12, 200810
.24B

Sublease Agreement (Tel Aviv, Israel)











X10
.25*

Description of 2008 Incentive Compensation Plan Goals and Awards
    for the Named Executive Officers.

8-K

001-33355


10.25


February 26, 200921
.1

Subsidiaries of the Registrant











X23
.1

Consent of Independent Registered Public Accounting Firm











X24
.1

Power of Attorney (included on signature page of this Form 10-K)











X31
.1

Certification of Principal Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002











X31
.2

Certification of Principal Financial and Accounting Officer
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002











X32
.1+

Certification of Principal Executive Officer and Principal
    Financial and Accounting Officer pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002











X     +
    
    This exhibit shall not be deemed filed for the
    purposes of Section 18 of the Exchange Act or otherwise
    subject to the liability of that Section, nor shall it be deemed
    to be incorporated by reference into any filing under the
    Securities Act or the Exchange Act, whether made before or after
    the date hereof, except to the extent this exhibit is
    specifically incorporated by reference.*
    
    Management compensatory plan or arrangement. 86




---



##### Table of Contents



SIGNATURES      By:
    /s/  Amir
    Bassan-Eskenazi  Amir Bassan-Eskenazi
 President, Chief Executive Officer and
 Chairman of the Board
    Form 10-K, Form 10-K
  Signature

Title

Date/s/  AMIR
    BASSAN-ESKENAZIAmir
    Bassan-Eskenazi

President, Chief Executive Officer and Chairman of the Board
    (Principal Executive Officer)

March 9, 2009/s/  MAURICE
    L. CASTONGUAYMaurice
    L. Castonguay

Chief Financial Officer
    (Principal Financial and 
    Accounting Officer)

March 9, 2009/s/  DEAN
    GILBERTDean
    Gilbert

Director

March 9, 2009/s/  KEN
    GOLDMANKen
    Goldman

Director

March 9, 2009/s/  GAL
    ISRAELYGal
    Israely

Director

March 9, 2009/s/  RAN
    OZRan
    Oz

Director

March 9, 2009 87




---



##### Table of Contents



Signature

Title

Date/s/  BRUCE
    SACHSBruce
    Sachs

Director

March 9, 2009/s/  GEOFFREY
    YANGGeoffrey
    Yang

Director

March 9, 2009/s/  ROBERT
    SACHSRobert
    Sachs

Director

March 9, 2009  88




---



##### Table of Contents



EXHIBIT INDEX
  Incorporated by ReferenceExhibit





File

Exhibit




Filed withNumber

Description

Form

Number

Number




This 10-K3
.1

Form of Amended and Restated Certificate of Incorporation of the
    Registrant

S-1

333-139652


3.1B


December 22, 20063
.2

Form of Amended and Restated Bylaws of the Registrant

S-1

333-139652


3.2B


December 22, 200610
.1*

Form of Indemnification Agreement

S-1

333-139652


10.1


December 22, 200610
.2*

1999 Share Option and Incentive Plan

S-1

333-139652


10.2


December 22, 200610
.3*

2001 Share Option and Incentive Plan

S-1

333-139652


10.3


December 22, 200610
.4*

2003 Share Option and Incentive Plan

S-1

333-139652


10.4


December 22, 200610
.5*

2004 Share Option and Incentive Plan Sub-Plan for Israeli
    Employees

S-1

333-139652


10.5


December 22, 200610
.6*

2007 Equity Incentive Plan

S-1/A

333-139652


10.6


March 8, 200710
.6A*

Form of Option Agreement (U.S.)

10-Q

001-33355


10.6A


August 8, 200710
.6B*

Form of Option Agreement
    (Non-U.S.)

10-Q

001-33355


10.6B


August 8, 200710
.6C*

Form of Restricted Stock Unit Agreement (U.S.)

10-Q

001-33355


10.6C


August 8, 200710
.6D*

Form of Restricted Stock Unit Agreement
    (Non-U.S.)

10-Q

001-33355


10.6D


August 8, 200710
.6E*

2007 Equity Incentive Plan Sub-Plan for Israeli Employees

10-Q

001-33355


10.6E


August 8, 200710
.6F*

Form of Israeli Sub-Plan Option Agreement

10-Q

001-33355


10.6F


August 8, 200710
.9A*

Amendment to Offer Letter Agreement  Ran Oz

10-Q

001-33355


10.9A


May 15, 200810
.10*

Offer Letter Agreement  Maurice Castonguay

10-K

001-33355


10.10


March 12, 200810
.11*

Offer Letter Agreement  David Heard

S-1/A

333-139652


10.23


February 26, 200710
.11A*

Amendment to Offer Letter Agreement  David Heard

10-K

001-33355


10.11A


March 12, 200810
.12*

Offer Letter Agreement  Robert Horton

S-1/A

333-139652


10.12


January 26, 200710
.12A*

Amendment to Offer Letter Agreement  Robert Horton

10-K

001-33355


10.12A


March 12, 200810
.13*

Separation Agreement  Jeffrey Lindholm

10-Q

001-33355


10.13B


November 12, 200810
.15*

Letter Agreement  Ken Goldman

S-1

333-139652


10.15


December 22, 200610
.16*

Letter Agreement  Robert Sachs

S-1

333-139652


10.16


December 22, 200610
.17A

Lease (475 Broadway, Redwood City, California)

S-1

333-139652


10.17A


December 22, 200610
.17B

First Amendment to Lease (475 Broadway, Redwood City,
    California)

S-1

333-139652


10.17B


December 22, 200610
.17C

Second Amendment to Lease (475 Broadway, Redwood City,
    California)

S-1

333-139652


10.17C


December 22, 2006




---



##### Table of Contents



Incorporated by ReferenceExhibit





File

Exhibit




Filed withNumber

Description

Form

Number

Number




This 10-K10
.20

Lease (8 Technology Drive, Westborough, Massachusetts)

S-1

333-139652


10.20


December 22, 200610
.21

Lease Agreement (Tel Aviv, Israel)

S-1

333-139652


3.2B


December 22, 200610
.21A

Addendum to Lease Agreement

10-Q

001-33355


10.21B


May 9, 200710
.23*

Transition Services Agreement  Fred Ball

8-K

001-33355


10.23


October 18, 200710
.24

Lease Agreement (Tel Aviv, Israel)

8-K

001-33355


99.1


July 30, 200710
.24A

Amendment to Lease Agreement (Tel Aviv, Israel)

10-K

001-33355


10.24A


March 12, 200810
.24B

Sublease Agreement (Tel Aviv, Israel)











X10
.25*

Description of 2008 Incentive Compensation Plan Goals and Awards
    for the Named Executive Officers

8-K

001-33355


10.25


February 26, 200921
.1

Subsidiaries of the Registrant











X23
.1

Consent of Independent Registered Public Accounting Firm











X24
.1

Power of Attorney (included on signature page of this Form 10-K)











X31
.1

Certification of Principal Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002











X31
.2+

Certification of Principal Financial and Accounting Officer
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002











X32
.1

Certification of Principal Executive Officer and Principal
    Financial and Accounting Officer pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002











X     +
    
    This exhibit shall not be deemed filed for the
    purposes of Section 18 of the Exchange Act or otherwise
    subject to the liability of that Section, nor shall it be deemed
    to be incorporated by reference into any filing under the
    Securities Act or the Exchange Act, whether made before or after
    the date hereof, except to the extent this exhibit is
    specifically incorporated by reference.*
    
    Management compensatory plan or arrangement.