Jay Borden: Nakina’s new leader

On the verge of breaking out with its Network Operating System approach to multivendor network management, Nakina Systems recently went through a leadership change. Jay Borden, a veteran of the inventory wars and student of the heyday for OSS startups as CEO of Granite Systems—which ultimately sold to Telcordia—has taken the helm at Nakina from Marco Pagani. Borden spoke with B/OSS editor Tim McElligott today about his plans for completing the breakout season for Nakina.

What have you been up to since leaving Telcordia besides sailing?

I have served on a few boards, Nakina being one of them. I’ve been here for about 18 months. Almost since the day I left Telcordia, I have been working with another company Renesys Corporation as Chairman of that board. It’s a little different space there. They do very sophisticated monitoring of global Internet routing. They are in the process of bringing to market and interesting Web 2.0 social media application. That broadened my horizons a bit, but Nakina is in a space that is very close and familiar to me.

How is the climate different for Nakina than it was for Granite as a startup?

It’s a little different coming in from the outside versus being a founder. I find that, personally, I am able to take a more analytic approach to the task of understanding the company and its position. On the other hand, it took only about two hours to remember how much fun this is and how much I enjoyed being in this part of the business.

What about market dynamics for startups in general?

Undoubtedly, it is much harder for new companies now--and Nakina is not exactly a new company. But it is harder for earlier-stage companies to penetrate large Tier 1 carriers. The market is concentrated and large carriers almost universally try to restrict the number of vendors they do business with, which erects barriers to entry for new entrants.

I compare it to the way a company like Google deals with innovation from smaller companies. It’s night and day. The telecom industry is doing itself a disservice by really choking off service innovation. In a way, that could lead to a competitive disadvantage.

What is it about Nakina that makes you think it has a shot?

It’s partly a question of timing. The whole notion of a NOS, or abstraction layer, to come to fruition, a number of things have to click. Tier 1 service providers have to see it as a logical next step in their overall management architecture--and that is happening. We are dealing at very senior levels within other Tier 1s in North America and Europe. Also from a timing perspective, we are seeing a new openness from the network equipment manufacturer marketplace to go outside for a non-proprietary element management solution. Just as a hot box maker 10 years ago would have done everything from the ground up, they now outsource and componentize a lot of that. The EMS is reaching a similar stage.

Why the change in leadership? Was Nakina not meeting expectations?

Marco did some very goods things for the company and the board just reached a point from a go-to-market standpoint where they wanted to try some new things, some new approaches. So we made the switch.

What kind of new approaches?

The company was already well on its way to broadening its technology footprint. Every successful communications company I have worked at rides a network infrastructure wave. And if it is really successful, it rides multiple waves. For Granite, it was second generation digital cellular then DSL. With Nakina, it was optical, then carrier Ethernet and soon there will be news things beyond carrier Ethernet.

Most significant shift in the go-to-market approach–and remember I have only been on the inside for six weeks—is that the importance of the OEM and resale models in our equipment manufacturer partners cannot be overstated. The importance of that in our overall approach to the marketplace is going to be substantial in the short term.

What changes do you have in store?

From an organization standpoint, my principal job is to add and strengthen, so we will build more capability in the senior management team. We are gong to build more capability in the field organization as well. We can put more field assets (sales) to work out there and grow the marketing and business development teams. I have always been a believer in highly-empowered, entrepreneurial and independent sales and engineering organizations and we have a good start on that, but we need to build on it.

What do you say to those who think Jay Borden came in to find a buyer?

I have no interest in doing that. I wouldn’t be here if I didn’t think I could contribute to the company’s ability to grow independently into a very large entity on its own.

What did you learn from your Granite days that you can avoid this time around?

In the real bubble days, we got pretty far out in front of our skis with the people we were adding and how fast we were growing. Had the markets continued to grow, it all would have been just fine, but in retrospect it wasn’t. So keeping a real close eye on the balance between anticipating growth and funding growth on the one hand, and being conservative and managing cash flow on the other, is something we’ll stay closer to.