Intelliden Corp of Colorado Springs, with offices in Austin, Atlanta, Boston, Chicago, LA, Washington and London, supplier of the R-Series operating systems suite consisting of four intelligent networking product engines,

1. Auditing.
2. Configuration.
3. Provisioning.
4. Security management.

Announced the appointment as Managing Director of Intelliden Government Sales of Rick Knapp, previously responsible for federal sales at both Sygate and Micromuse.

The announcement noted that during the past six months Intelliden has won several large government contracts, signed multiple government channel partners and engaged with key federal agencies.

Intelliden's products are designed to enable networks to become more intelligent and efficient by dynamically responding to strategic priorities and, more specifically, to provide seamless identification, analysis and resolution of systems and networking issues that can threaten the availability, security, provisioning and compliancy of strategic IP networks.

COMMENT AND ANALYSIS
While the Intelliden statement is a consolidation of an apparently already thriving relationship with the federal government, it seems clear the company's business has accelerated over the last six months. The announcement is the culmination of a steady stream of even more fundamental announcements over the last year from other companies in the sector with virtually no government business, to set up organisations specifically dedicated to winning a significant amount.

How much of this is occurring just because of the government's own increase in spending on communications products, and how much because of a shortage of sales and profitability in an overpopulated industry, is perhaps less important than the risk that some smaller companies may fall into the trap of becoming excessively dependent on government sales.

While it may be a little simplistic to say that it is much easier to get business from the U.S. government than from customers in China, Vietnam or Brazil, it is clear that the fundamental costs for a small company of marketing overseas can be very high and the wait for business indeterminately chancey, whereas going for U.S. government business involves dealing in one's own language and culture, with a determinate process and limited costs and probabilities of success that can be reasonably assessed.

Unfortunately, government business, while profitable, can also absorb a relatively disproportionate percentage of rare specialised engineering resources. Much government demand may relate to standard commercial products with a few extra reliability and security bells and whistles, therefore making it also possible for a company short of business to become sidetracked into the kind of deadend specialised development that has little chance of being exploited commercially.

Clearly the trick is to use government contracts intelligently as a springboard into new commercial markets and to ensure that the company never gets to the point where the level of government sales drives company decisionmaking in the opposite direction to its strategic objectives.