One of their companies, Intelect Network Technologies, accounted for about $24 million of that revenue. Indeed, in the Dallas-Fort Worth area referred to as the "Telecomm Corridor," Intelect was ranked the second fastest growing high-tech company for 1997. It did it with networking equipment that meets the highest quality and innovation. Evolving Enterprise discussed that growth, what led to it and how to manage it with the president and CEO of Intelect Network Technologies, Peter Ianace.

One aspect of the company's growth has been the deregulation of the telecommunications industry since 1996. "Absolutely, deregulation has helped. If you look at us in 1999, the analysts are predicting we'll be about a $130 million company. I expect $85 million of that to be from the U.S. and $45 million to be the rest of the world. Our international business will grow, but the markets are dramatically bigger in the U.S."

A new market the company see as an extension of its infrastructure networking business model is the intelligent transportation market. "Our air traffic control business has been around for 30 years," Ianace explains. "We're also doing airport information backbones, which makes sense. If you could do an air traffic control tower which is mission critical, then you have credibility with the airport to sell them a backbone for their communications needs on the ground. The first one of those we actually installed was the new Austin (Texas) International Airport. We have just been chosen for all three New York airports (Newark, LaGuardia and Kennedy)."

Transportation comes in many forms. As we get closer to practical, information-driven "intelligent highways," ground-based networks will be needed. That's a key growth market for Intelect, too. "In that area, we're specified in 27 states and have been installed along the Connecticut Turnpike and Route 75 through Cincinnati," Ianace says. "As the RFPs come out, they will say it must be SONETLynx or equivalent. We look at that as a major upside going forward."

SONETLynx is Intelect's version of the Synchronous Optical NETwork that allows multiplexing of data, voice, video and local or wide-area network connectivity over copper or fiber optics.

Because of the installed base of copper cabling in U.S. companies, the fiber optics market has been slow to develop. That isn't the case in Europe and Asia, however. As Ianace points out, "The reason we've grown so fast internationally is because they have far less infrastructure. They don't have a lot of copper networks so they go directly to fiber. When they're building out their networks, they find a product they like and start installing it, and start generating revenue with it."

Intelect knew that it had to achieve ISO 9000 status to open doors, especially in Europe. "ISO 9000 is more important to Europeans and other international communities than it is in the U.S.," Ianace admits. "ISO 9000 really allows you to be proactive, to be able to measure your processes. When you are doing processes on the fly, based on reactionary kinds of contracts, it flies in the face of what ISO 9000 can do for you." Intelect obtained ISO 9002 certification.

Most, if not all, high-tech companies need to get certified for ISO 9000 to expand or do business in Europe. Some shy away from it because it is a major project and can take resources (people, time and money) away from the business in the short run. That was true at Intelect, too.

"Our main concern was the amount of dedicated time you have to give to do it properly," Ianace acknowledges. "We went from $10 million to $38 million and we'll probably go to $70 million this year. When you're growing, you're doing a fair amount of reactive projects versus proactive projects. It was a matter of getting enough management attention from all my departments, so we were focused on the overall value of what ISO 9000 gives us as a company. At the same time, we had to be sure we weren't stopping the revenue train.

"We knew that we had to get the processes in place for our own good. But it required stealing some time to ensure that the processes made sense, that they were good for our business. We went a long way toward making this project easier when we promoted somebody internally to be an inside auditor, to act as if they were an ISO auditor. We were then able to identify shortcomings in our processes that we needed to resolve before we had our audits. That put a focus on it. It allowed us to make real progress."

Intelect's background helped, too. "Since the heritage of the company is in MilSpec air traffic control, the rigid requirements in the military sector gave us the discipline we needed when it came to ISO 9000," Ianace says. "From that point of view, our people were comfortable with the process and discipline. Still, I think it probably took us six months longer than it should have because we were so busy dealing with new revenue."

The now infamous Year 2000 Problem is getting a lot of attention in telecommunications. The recent satellite failure that sent the pager network into a tizzy sounded a warning about the interconnectivity of communications and computers. If their computer systems fail on Jan. 1, 2000, telecomm will be mightily hit. Intelect makes a point of assuring customers that its products are Y2K compliant, a reasonable marketing technique these days. "I will tell you that we got the networking contract for the three New York airports for exactly that reason," Ianace notes. "The systems they have installed today have a Year 2000 Problem. They love what they have, but they aren't going to work in 2000. That forced them to make a change. I think that definitely will help us. It will start churning some of those old systems that have been around a long time."

Being a global marketing company means learning how business is done in many parts of the world where they do things differently than in Texas. Still, as Ianace says, "It's really not difficult if you think globally to start with. The tactics are different but I don't think the strategies are all that different. Clearly, you need to take on the personality of the country you're selling into, and if you don't have a very efficient partner from that part of the world, you're not going to be successful. One of the things we've done over the years is develop some pretty extensive files on customs � hot buttons � in each country that we market to. So far, we have our most success where we have a very good international partner.

"In the U.S., it's very different. It's much more of a people-selling-to-people business. Even though you're selling to large corporations, people are still buying from people. There are a lot more decisions made on who you know, from a trust point of view.

"The real issue is understanding," he adds. "What we do that's a little different is we really try to understand why people use our technology. How do they use it in their day-to-day lives? How does the system make their business more effective? If you do that properly, it's only a matter of time before people start buying a lot of product from you."

How do they approach marketing?

"First, we think we have a better mousetrap," Ianace says. "That gets us the ability to be considered. Within that, based on how large the potential is in revenue, we will do specific modifications for customers. It's not custom � we don't want to be in the custom business � but we will add features and functions that drive revenue for us in a high margin area and that also give major benefits to the end user. We believe we can then leverage this into sales to other customers."

"For example," he continues, "the way we integrate video surveillance with our product is dramatically different from anything that's ever been done. If you study it, you find in almost every case of high-end surveillance, you have a command center. That command center has agents in it, and those agents have monitors to look at different cameras.

"It doesn't make much sense to design your product so that every camera can go across your backbone and burn all this network bandwidth. Why not design a product, that if the monitor selects the camera, then it connects and uses the bandwidth? When the monitor or card that's in the system recognizes that the camera is not being watched, it doesn't use the network resources. That's dramatically different than anybody's ever done it."

Innovation, rapid growth and high technology � they all seem to go hand- in-hand these days. Even the terminology can be confusing if you're not keeping up. Ianace agrees: "Our biggest new market is wireless. Now, everybody thinks wireless means there are no wires. Not true. Wireless means there are some wireless sites but all the traffic gets sent back to a switch somewhere and that's done over fiber. For example, we connect cell sites together. We've got a lot of that business in the Far East where everybody has a cell phone. Seoul, Korea, is the only subway system in the world where you can have a PCS phone in the subway and be able to use it. That is one of our systems."

Tom Inglesby is the executive editor of Evolving Enterprise.



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