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Valiant Tests Its Power

Light Reading
News Analysis
Light Reading
1/31/2001

As an independent testing service, can Valiant Networks Inc. tread the thin line between trusted consultant and powerful king-maker?

That Shakespearean question is expected to come up as Valiant builds a portfolio of systems clients. This week the company said it had added Amber Networks Inc. to its list of customers, which already included Cyras Systems Inc. and Looking Glass Networks. It has landed a total of 15 customers since launching in March 2000 (see Net Management Startup Launches).

Valiant’s business model is a curious one. It provides professional services, such as network design and remote management of network operations centers, to carriers. At the same time Valiant assists vendors with network interoperability testing and technical support once products are sold to carriers.

For Amber Networks, Valiant tested its product and gave pointers on where it could improve so that carriers would find it more attractive. Also, for Amber’s carrier customers, Valiant provides technical troubleshooting and support on Amber’s behalf.

By playing back and forth between carriers and vendors, Valiant is trying to establish itself as the industry’s trusted middleman. “We want to be the de facto stamp of approval in the [networking equipment] industry,” says Allan Baw, Valiant’s business development manager.

Valiant says it will shun carrier and vendor funding of all sorts and refuse to take stock as payment from startups, all in the effort to remain neutral. But a potential conflict already exists: Valiant is funded by Kleiner Perkins Caufield & Byers, a VC firm known for its ability to get its portfolio companies to give each other preferential treatment.

Baw contrasts Valiant’s “vendor-neutral” approach to that of Lucent Technologies Inc. (NYSE: LU), which provides carriers with both network services and equipment. Lucent’s vice president for product management, Tom Praschak, however, rebuffs the notion that its consultants are awash with conflicts of interest. “In our consulting services," he says, "reputations are at risk if you don’t focus on what’s the right technology for a customer’s needs."

One executive at a Cyras competitor said she’d be wary of using its testing services if Valiant were helping Cyras in product development. “I would worry that they’d see something in our product and use it to help Cyras.”

For its first eight months in business, Valiant recorded about $3.5 million in revenues, with a $1.5 million backlog, Baw says. The company expects to be profitable before the end of this year and plans to expand operations by opening network monitoring centers in Texas and Virginia.

-- Phil Harvey, senior editor, Light Reading http://www.lightreading.com

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