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Attitude Is Intrinsic

Intrinsic Technologies is "quicker, faster, better" than the rest -- just ask CEO Jason Liu.

There's a story about basketball great Larry Bird that goes something like this: It's the day of the first Long Distance Shootout, prior to the 1986 NBA All-Star game. Bird comes into the room where the other seven contestants are getting ready and asks, "Which one of you is going to come in second?"

Jason Liu exudes that kind of confidence. Ask him what differentiates his company, Intrinsic Technologies LLC of Lisle, Ill., from other Microsoft service providers and you'll hear -- repeatedly -- that Intrinsic is "quicker, faster, better" than its competitors and that his consultants are the IT equivalent of brain surgeons.

But, like Bird, Liu has the numbers to back up his claims. His company has averaged 25 percent growth in each of the last three years (although he declines to say how much revenue the company generates). The reason for its success lies in the tools it has created to automate software deployments, most notably its SWIMAGE offering. Using these tools, Intrinsic claims it can lower a customer's deployment costs for Windows XP and applications such as Office 2003 by 30 percent to 80 percent. Thanks to SWIMAGE and some significant investments in the Microsoft Deployment Service Partner (DSP) program, revenue from Intrinsic's operating system migration business has doubled in the last year, Liu says.

"We like to think of ourselves as one of, if not the premier Microsoft infrastructure services firm," Liu says. "We're not the largest one, but certainly kind of the brain surgeons of Microsoft services."

Automating for Success
Intrinsic was founded in 1997 as a regional systems integrator by Tom LaMantia, now chief operating officer, and Rick Schendelman, who is now chairman. They brought in Liu as CEO in 2002, primarily to help the company go national.

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Liu's Best Decision with Intrinsic: To focus on Microsoft, starting with SMS and MOM desktop deployment. "Don't try to be everything to everyone. Be the best at something."

Today, the company's customers are typically larger firms -- the Global 5000, as Liu puts it. Those customers are drawn to Intrinsic not only for the quality of its consultants, he says, but also for the intellectual property and intellectual capital that comes with those consultants. By that he means SWIMAGE and the best practices and templates that complement it.

As is the case with most any systems integrator (SI), over the years Intrinsic consultants created a number of tools, scripts and utilities to help them more quickly deploy Microsoft operating systems and applications. "About three years ago, we decided to rewrite all of them in .NET and really turn them from a set of tools and scripts into a true product," Liu says. The result, SWIMAGE, is a desktop and server deployment framework that's built on top of Microsoft's Systems Management Server (SMS) and the Microsoft Solution Accelerator for Business Desktop Deployment (BDD) tools. The idea is to start with the basic functions that those Microsoft tools provide, but take them a step further by automating additional functions.

For example, desktop deployments vary according to various criteria, such as which department the users work in and the titles they hold. Products such as SMS will act as the transport mechanism to actually deploy the desktop software, Liu says, but you have to manually tell it what applications to place on each desktop. SWIMAGE allows for policy-based deployments in which all users in the marketing department, for instance, automatically get configured with the same set of applications. Automating such functions is how Intrinsic saves companies a chunk of the costs associated with software deployments.
"We're now licensing SWIMAGE to end users and global SIs," Liu says. "So we're starting to see licensing revenue, which provides an annuity stream for us, and it's at 100 percent gross margin."

Intrinsic Technologies LLC

Headquarters: Lisle, Ill.

Web Site: www.intrinsic.net

CEO: Jason Liu

Founded: 1997

Line of Business: Architect, design, implement, optimize,
manage and secure server and desktop platforms

Microsoft Partner Level:
Gold Certified

Microsoft Competencies: Advanced Infrastructure
Solutions and Security

Annual Revenue: Undisclosed

Growth Rate: 25 percent annually each of the last three years

Employees: 65 in four locations

Customer Base: Global 5000; strongest verticals are financial services, health care and retail

Awards: Deployment Service Partner (DSP) Program Airlift Most Deployment Business Value Award, November 2005; Microsoft Federal Partner of the Year, 2005; Microsoft Federal Top Solution Award, 2005

The idea of licensing such a potentially powerful competitive weapon to other SIs may seem like folly to some, but it makes perfect sense to Liu. "The largest SI has only 3 percent of the market. It actually is beneficial to work cooperatively with other SIs in our space rather than competitively," he says.
While SWIMAGE addresses desktop deployment, another key focus area for Intrinsic is collaboration applications, under which the company includes Active Directory deployments, Microsoft Identity Integration Server 2003 and Exchange. In the case of AD and Exchange, the company uses tools from Quest Software to aid its deployments and once again developed its own software on top to increase the level of automation, Liu says.

"When we go into a bid for Active Directory or Exchange, we are typically 50 percent to 70 percent cheaper than another systems integrator that's doing it without Quest tools," Liu says. And against a competitor that is using Quest tools? "We still see ourselves being 10 percent to 20 percent cheaper," the difference being the edge Intrinsic's own tools provide in terms of automation.

A Changing World
Automating is crucial given the changing nature of the services business. Traditionally, SIs simply billed based on time and materials, which provided a disincentive to automate -- doing jobs faster meant less revenue. But less expensive labor from India and elsewhere and the specter of competition from outsourcing is forcing SIs to compete on a fixed-cost basis, Liu says. "If the world is moving toward fixed cost, increasingly systems integrators are being forced to increase gross margins," he says. Given that labor is a service provider's biggest cost, the key to increasing margins is to reduce labor costs. "The way to do that, in our opinion, is through software and automation."

It also helps to keep the pipeline full of projects. With that in mind, in the latter half of 2004, Intrinsic began investing heavily in the DSP program that Microsoft launched to accelerate deployments of Windows XP. Microsoft invited providers to learn about its approach to XP deployments and become certified in the process, as well as to get involved in Accelerated Deployment Sessions (ADS) with customers. Each ADS involves about three days' worth of assessments of a customer's infrastructure. The goal is to help customers understand why they should deploy XP (and soon, Vista) and how much it will cost, Liu says.

Microsoft reimburses its partners about $3,000 for each ADS -- hardly enough to compensate the company for the time that goes into it. The payoff, however, can be great if you wind up landing the migration project. "We spent a lot of cycles working with the group in Redmond and the DSP people in the field," Liu says. "We worked with them to help them understand why we were the best partner, why we could do things quicker, faster, better."

Eighteen months into the effort, Liu says Intrinsic was recognized for having the second-most ADSes of any systems integrator in the country, behind Unisys. And what about the payoff in terms of migration work? "It's taken a while, but we're finally starting to see a payoff. We're starting to get the projects," he says. And the XP discussion is just a beachhead. "It gets us in the door to the customer, and we find out they need an entire infrastructure upgrade, including a directory structure and SMS as well."

The moral of the story, according to Liu, is: "You've got to commit. You can't have one leg in and the other leg out."

Commitment. That, too, is an attribute Liu shares with Larry Bird, who, by the way, did indeed win that first long-distance shooting contest. Not to mention the next two.

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