The Continuum-Datto BDR Deal: Five Questions Worth Asking

The Continuum-Datto BDR Deal: Five Questions Worth Asking

When Continuum (formerly Zenith RMM) partnered with Datto today, it was the latest in a series of moves that could influence the backup and disaster recovery (BDR) market for managed services providers. But the Continuum-Datto relationship potentially raises as many questions as it answers. In fact, here are five follow-up questions MSPmentor is pursuing.

1. No Need for Non-Compete Agreement?: Summit Partners acquired Zenith RMM (now Continuum) in September 2011 from Zenith Infotech. From the start, Continuum said it planned to partner in the BDR market. That's understandable. But here's the head-scratcher question: Can Continuum really launch its own branded BDR solution (Continuum Vault) to compete with former parent Zenith Infotech? Wouldn't it have been wise for Zenith Infotech to implement some sort of non-compete agreement that blocks Continuum from launching a BDR solution in the near-term?

2. Exclusive Deal?: Rumor has it that Continuum met with multiple third-party storage companies. Continuum's list of potential target partners was believed to include Axcient and Doyenz, among others. But now that Continuum has partnered up with Datto, can Continuum still pursue additional third-party BDR relationships? MSPmentor is checking.

3. Board Member?: Zenith Infotech CEO Akash Saraf remains listed as a Continuum board member. But isn't it a conflict of interest for Saraf to be on Continuum's board, when Continuum essentially has launched a competing offering to Zenith Infotech?

4. Free and Clear Ownership?: Will Summit Partners/Continuum buy out Zenith Infotech's remaining (minority) interest in Continuum? Or is Zenith Infotech barred from selling anything as part of a legal battle with bondholders?

5. Thinking Bigger?: Amid all this competitive posturing, BDR companies are spending a lot of time trying to steal (well, earn) market share from one another. Wouldn't it be wiser to focus on blue ocean opportunities and grow the overall market?

MSPmentor is pursuing answers to each of those questions. Stay tuned for updates as soon as we get them.

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