(Re) Writing Code

Terekhov captivated the Americans with his intelligence and resourcefulness. He had built a telecommunications system for the KGB that enabled Soviet officials to establish phone connections that were both clear and secure. Since that system used computer standards that had been created for the U.S. Department of Defense, Terekhov had to develop a primitive version of the translation software that Wadhwa and Erlikh had in mind. "He's like quicksilver," marvels Erlikh. "He's able to respond to change, and he's full of energy." Wadhwa and Erlikh sent Terekhov PCs and modems, along with sample code from the original First Boston project. Then, after working on the problem with his best students for more than two years, Terekhov sent back a formula that seemed to work.

In 1994, after some initial tests, Wadhwa declared victory. But he had fallen victim to his own bravado. Seer tested Terekhov's process on its customers' systems, and the process failed. Terekhov had built a model so specific to the sample First Boston code that when Seer applied it to a customer's 40,000-line program -- at First Boston, a typical program was 2,000 lines long -- the system choked. Wadhwa lost credibility, and Seer had to return customers' money. "We went from being rock stars to being losers," Wadhwa says.

That moment was like a slap to the forehead. Members of Terekhov's team realized that a translation algorithm that worked on only one kind of software was useless. They revised their approach, but even as they did so, Seer encountered business problems. The company decided to concentrate on proven technologies and existing customers, and it stopped funding Wadhwa's little-understood R&D. Again, just as Wadhwa and Terekhov seemed to be closing in on victory, it was snatched away.

But Wadhwa had choices. He could stay at Seer but abandon the Russians and the dream of automated translation. He could leave Cary, North Carolina (where Seer was headquartered) for Seattle, home of Microsoft, which had offered him a good position in a completely different area of software development. Or he could leave Seer, turn down Microsoft, and set out on his own with the Russians -- and with his vision. "I had to make a tough decision: whether to abandon something important to me or to risk what little I had after a big setback," he says. He left Seer and took the unfinished translation technology with him.

Determined to build a company around that technology, he paid the Russians (and his own bills) out of the $240,000 that he and his wife had saved for their children's college education. That company, founded in February 1997, was Relativity Technologies. (The notion that software translation is akin to cracking the atom may seem melodramatic, but it was in homage to Einstein's Theory of Relativity that the company name was chosen.)

Wadhwa realized that he needed to sell a product that met a wide range of needs -- from clarifying what a program actually does to offering customized formula conversions. He, Erlikh (who had left Seer to become CTO of Relativity), and the Russians started building more features for RescueWare (as the product had been called since its first beta version, in 1994). They added tools that compile important functions in a program's old code. And they improved the program's ability to remove and translate particular pieces of code, such as a bank's formula for calculating interest on a loan.

Today, RescueWare is starting to live up to its promise. Pol Mac Aonghusa, manager of solutions development and services at IBM, worked with Relativity last year to salvage functions from the ailing computer system of a large European bank. The system contained about 20,000 functions, or "rules," and before it could be translated, many of those rules had to be recast for new business needs. Mac Aonghusa was impressed by RescueWare's ability to customize conversions without losing any functions in the process -- something that the Relativity product hadn't been able to do two years previously. "RescueWare is ready for prime time," he says. "It actually adds value by allowing companies to use their old software in ways they haven't thought of before."

Small Company, Huge Challenges

Relativity's software may be ready for prime time, but what about its business strategy? The market opportunity is huge -- but the company is still tiny, with revenues that came to just $10 million in 2000. The needs of giant organizations like commercial banks and the Air Force are clear -- but how Relativity will meet those needs productively and profitably remains open to question.