"Commerce is a game of skill, which every man cannot play and few can play well. The right merchant is one who has the average of faculties we call common sense; a man with a strong affinity for facts... The problem is, to combine many and remote operations to arrive at gigantic results without any compromise of safety."
--Ralph Waldo Emerson, American philosopher
  “Wealth from The Conduct of Life" (1860, rev. 1876)

Jay Borden is certainly one of the most skillful merchants who ever played the game of B/OSS commerce.  At Granite Systems, the Manchester, N.H. firm he founded in 1993, Jay bootstrapped his company into a major industry force in a few short years.

Championing a novel idea at the time that a network inventory system was crucial to managing the physical and logical configurations of services, Granite went on to win contracts at several big carriers: SBC, Verizon Wireless, AT&T Wireless, Cingular, T-Mobile U.S., Telecom Italia, and Bell Mobility.

Then in 2004, Telcordia acquired Granite, making Jay head of Telcordia's new Granite subsidiary. The financials of the deal were never disclosed, but it certainly achieved the "gigantic results" for Borden and his investors that Emerson talked about.

A few years later, Jay left Telcordia to recharge his batteries and spend some time enjoying his prosperity.  But then - only 2 years later in 2008 - Jay was itching to get back into the swing of the telecom OSS biz again, so he joined Nakina Systems as its new CEO.

Jay now lives in Boston and flies up to Ottawa frequently to manage his company.

I caught up with Jay at TM Forum’s Management World 2010 conference in Nice. Our conversation was only 30 minutes long, but in that short time, Jay shared an abundance of insights on: reinventing a small ISV; the growing OEM software opportunity; telecom's most crucial OSS integration challenges; and Nakina's thrust into a new OSS specialty it calls "network integrity."

Reading Jay's words, you certainly get the sense that lightning may indeed strike twice.

Dan Baker, TRI:  Jay, you joined Nakina two years ago to get the company growing again.  And it's pretty obvious that you've re-positioned the company because I no longer see those Nakina booth banners proclaiming "The EMS is dead." 

Jay Borden: Yes, the company had embarked at the time on a mission to replace the EMS layer of the management model with a kind of a universal mediation element management solution based on a platform called the NOS, the Network Operating System. That strategy was spectacularly successful at one customer, Verizon Business.

Having a big customer was both a blessing and a curse for us. It was a blessing because it paid a lot of light bills, but it was also a curse because a product built for a large carrier is often viewed as a special case that's hard to replicate. More importantly, our product pitted us against the incumbent equipment manufacturers: We were trying to take a piece of their business.

That's not to say we couldn't win deals. But our opportunity was limited to that narrow window when greenfield network orders are being signed — an order for a big Metro Ethernet play with Cisco or Juniper, say, or a big LTE  play with Alcatel or Nokia Siemens. That's when the commitment to a particular management system is going to be made. And it's tough for a small company to come in and capture an order worth only 3 to 5 percent of the total deal — and compete against Alcatel, Nokia, or Cisco for that.

Now the cost savings were real. A carrier could save tens of millions a year in operating expenses from buying our software. But carriers don't operate by simple arithmetic: They have purchasing cycles and capital budgeting cycles to think about. Plus, the carriers are somewhat tied to their major network infrastructure suppliers.

Baker: In other words, you had to reinvent Nakina's business.  How tough was it to pull up stakes and move to another camp?

Borden: Well, happily the skills in our company were and are superb. And we had already built a great management platform with a rich application capability, especially to connect to a heterogeneous group of devices at relatively low cost.  We also knew how to build the interfaces - and more importantly - how to manage communications in a scalable and reliable manner with a big installed base of devices.

So we decided to continue providing EMS platforms, but this time offering it on an OEM basis to equipment manufacturers. That strategy is working well for us and we now have a number of products moving out into the marketplace through that channel.

Baker: Over the years you've obviously acquired a knack for discovering the kind of  software carriers are willing to buy. How do you figure that out?

Borden: It's no secret really: Just find out what the urgent and critical problems are at a particular company. What problems do they have that they can't put off to the next quarter?

You can certainly put off a universal mediation layer to another quarter, but at AT&T, we found out they had a compelling need to reign in configuration management problems around IMS. 

In what was then a pilot IMS network, AT&T ran into a roadblock because they couldn't implement network upgrades even with a couple of hundred maintenance windows.

The issue?  They couldn't easily acquire an accurate snapshot of the network's software configuration. Before you can upgrade a device, you have to know how the 300, 400, 500 parameters are set on the device because when you run the upgrade, you need to know precisely what you’re changing, and what must remain unchanged. Now every device has an intended configuration of record or "gold standard," and you must verify that if you're not in line with that standard, there's a good reason for it.

So it became a highly manual stare and compare process: Is it right or is it wrong? And AT&T knew they simply couldn't grow a network without more automation.

When Nakina looked at that problem, we said: "We know how to do that." We can build the interfaces for the 25 different development classes here; we can run the online audits; and we can check discrepancies against the configuration records, and we can tell you what needs to be looked at in a few hours compared to a few days or weeks. Moreover, we found that AT&T’s primary IMS supplier, Alcatel, was quite willing to work with us in delivering and supporting the solution. They’ve become a valued global partner.

Baker:  Have you been able to leverage that work at AT&T across your broader software business?

Borden: Actually, Dan, the light bulb came on because we realized: This is not an AT&T problem and it's not an IMS problem. There's a familiar theme here around the disaggregation of network intelligence that applies in many areas.

In the previous network generation, everything was located in one place. You simply connect to a switch and looked at its translation table. Today, the switch has been replaced by a cloud of signaling gateways and media gateway controllers. And that new environment brings great richness and revenue agility when it comes to rolling out fancy IP services, but operationally, it's highly complex to match that up with the previous generation.

While the network roadmap shows a well defined path from a highly-centralized, mainframe-like architecture to a distributed base of connectionless or semi-connectionless devices, there's no operational path defined at all — it's more like make-it-up-as-you-go-along.

And that's exactly the problem Nakina is now focusing on. We are trying to provide the critical elements of a new operations paradigm we call "network integrity." 

When you think about it, network integrity is the chief operations challenge in a distributed, disaggregated network environment. If you want to roll out LTE, or keep up with mobile Internet data requirements; or roll out IMS and scale it — all of these mandates require you to come up with an automated, platform-based approach to maintaining network integrity. 

Network integrity encompasses many functions. First, there's the old problem of physical layer alignment — making sure the network inventory databases are in sync with what's actually installed in the field. 

Second, once you know what is actually installed  and sadly, this is less trivial than it sounds or it ought to be – you need to know how it is configured at every level of detail, and how that configuration relates to design standards and past changes. 

And third, every one of those devices has individual interfaces for log-on, user names, security levels, and profiles that you must maintain. You have to manage that or you’re going to lose the integrity you gain in the first two steps. 

So it’s three deeply connected processes: Discover it, validate its configuration, then lock it down and secure it. 

EMSs are quite rich in functionality. They have configuration and engineering capabilities. And they have device log-on, software update, and audit capabilities — and  also security, fault, and performance data logging capabilities, but all at the individual device level.

What Nakina has done is a bit of archeological excavation. We've teased out certain functions from these standalone EMSs - especially configuration, security, physical discovery and reconciliation - and taken that to a higher, multi-vendor plane. 

So, we think we are in a great position vis-à-vis the evolution of network infrastructure.  We think we can become a key operations enabler.

Baker: It sounds promising, but it's a very different business model than that of a traditional OSS software vendor. 

Borden: Frankly, as our industry has progressed, opportunities to stake out a generic OSS software niche are harder to find. 

For example, a cable/MSO customer recently hired us to do a complete multi-vendor audit of a Cisco backbone.  Now the tools you can get from Cisco to do that are pretty limited: You can't just bounce SNMP against an MIB to get the intelligence you need. Nor can you easily acquire the data you need to do a complete network inventory audit. 

You have to be able to connect using the TL1 protocol over their command line interface and execute a sequence of requests and intelligently amalgamate on the back-end to get a real picture of what's in the network and how it's connected. 

That's a capability you don't get from off-the-shelf SNMP-based management tools.  Today, that’s enterprise class technology, not carrier class.  We’re aiming for a higher level — helping address the more specific requirements of signaling gateways, gateway controllers, stuff at the transmission end, the optical view, the Ethernet view, the IP view. So that's where we're coming from.

There's nothing pretty about the problem we're trying to solve, but it's the right niche for a specialized communications software provider.

Baker:  I'm curious.  How would you compare today's OSS business with what it was like back in your days at Granite?

Borden:  Life as an ISV is very different than it was back then. Today it's much harder to sell directly to the carriers. The consolidation of carrier business has led to the consolidation in the supply chain. As a result, carriers have erected greater and greater barriers to entry for new suppliers.

That's why, going forward, more than 50 percent of our business will be OEM. It will never be all the business, but it's the bedrock. And for us, OEM means working with the larger network equipment providers and network systems integrators.

The problem with the old model is that selling a license takes forever. You've got a year's worth of product evaluation, then another six months of pure lawyer work. That's no exaggeration, for legal work entails sorting out intellectual property rights, solving  liability issues, and settling on what the maintenance terms and conditions will be — it's a long list.  Lawyers who have negotiated with the likes of General Motors or Wal-Mart say you can at least have a balanced discussion with those companies, but negotiating with service providers is like bargaining with Godzilla.

Baker: But why, working with the equipment provider and SIs, aren't you competing with the thousands of engineers they have on staff and that are dealing specifically with network issues?

Borden: That's true, and a number of them have great element management software capabilities.  But each one of these firms has also gone through successive downsizings and trying to re-focus on what their core business is.

But more than that, these companies can't build software fast enough. 

Where an outsider like Nakina can really help is in time-to-market — identify new operations requirements and build products quick enough to match developments on the hardware side. That's tough to do. What's even more difficult - and has historically been impossible for them - is to build out and deploy management software in a convincingly multi-vendor way.

Baker: What about the challenger NEPs like Huawei and ZTE? Are these players candidates for OEM customers as well?

Borden: The challengers are certainly coming on very quickly. And it's their intention to build very strong software capabilities on their own. Huawei, for example, was actually up for an industry excellence award at this year's TMF show.

Yet these challengers will face many of the same issues as the incumbents in terms of time to market, specialization, and multivendor capabilities. I don't think anyone is going to go to Huawei and expect to purchase a network configuration platform that works very well against Nokia and Alcatel. That's not a slam against Huawei. That's just life.  

None of these problems are silos anymore. If you have a configuration issue, it's not a Huawei, Alcatel or Nokia Siemens issue: it's a network issue because nobody runs single vendor networks anymore. So, if you want to maintain network integrity through a common set of tools and platforms using a common set of operations processes - which is becoming an operational necessity - having a single independent platform underneath to aggregate the network environment is a big advantage.

John (Jay) Borden is the CEO of Ottawa-based Nakina Systems. He was the founder and CEO of telecom software company Granite Systems from its inception in 1993 through its successful sale to SAIC and merger with Telcordia in 2004. Borden was named Ernst & Young's Entrepreneur of the Year in 2002 in the New England software category and New Hampshire High Tech Council Entrepreneur of the Year in 2000.

Dan Baker is Technology Research Institute’s (TRI) principal market synthesizer and co-founder. He is a former market analyst at Venture Development Corporation (VDC), where he tracked the telecom and real-time computer markets. In 1992 while at VDC he authored one of the first multi-client research reports on the Advanced Intelligent Network software and systems market.