Zenith RMM Preps Cloud, BDR Alternatives to Zenith Infotech

Zenith RMM CEO Michael George continues to draw a cordial but clear line between his company and that of Zenith Infotech, which recently defaulted on a bond payment. While Zenith RMM continues to partner with Zenith Infotech, George says Zenith RMM will also take steps to ensure MSPs have alternative cloud and BDR (backup and disaster recovery) partner solutions from which to choose.

First, some background for readers who aren’t familiar with the back-story:

Zenith RMM offers remote monitoring and management (RMM) software, plus NOC (network operations center) services. Zenith RMM spun out of Zenith Infotech in September 2011. Summit Partners, a private equity firm, is now Zenith RMM’s majority owner.

Zenith Infotech promotes cloud, backup and disaster recovery solutions to MSPs. Zenith Infotech defaulted on a bond payment in September 2011. In an Oct. 14 statement, CEO Akash Saraf said Zenith Infotech remains financially solvent, strong and stable for partners and customers. But bondholders, apparently led by QVT Financial, are seeking more information about Zenith RMM’s spin-out from Zenith Infotech. I believe the legal matter involves QVT Financial filing a petition against Zenith Infotech in Mumbai civil court, though MSPmentor has not seen the alleged filing.

Will the bondholders reach out to Zenith RMM as well? So far the answer appears to be no. “I’m not aware of any specific requests” from bondholders to Zenith RMM, George told me today. “This is an independent company so we’re not privy” to the Zenith Infotech-bondholder discussions, he added.

Preparing Cloud Alternatives

Looking ahead, Zenith RMM is maintaining a careful balancing act. On the one hand, George says Zenith RMM and Zenith Infotech remain partners. On the other hand, George says Zenith RMM’s top priority is serving MSPs. “We have our MSP partners’ interest in our heart and at the forefront of every activity we consider.”

With that thought in mind, Zenith RMM is taking steps to “protect the interest of MSP partners that we have in common” with Zenith Infotech. “Should those partners desire to seek an alternative to Zenith Infotech, we will provide a very safe, seamless transition platform that will allow MSPs to conduct business in the areas of cloud and BDR (backup and disaster recovery). We will be announcing very soon an alternative for those partners.”

George is not sounding an alarm, nor is he telling Zenith RMM partners to exit Zenith Infotech’s cloud and BDR solutions. But he also wants to give Zenith RMM partners peace of mind and market alternatives. “When we launched Zenith RMM our goal was to be a completely market- and partner-engaged company.”

Although the financial debate is between bondholders and Zenith Infotech, George concedes that the bond discussions cast a “modest shadow” on Zenith RMM. “But it has been a catalyst for something good as well,” said George. “I’m spending all my time in front of our partners and that’s a good thing. We’ll work our way through this together with our partners.”

Next step: My best guess is Zenith RMM will announce an additional cloud and BDR relationship within days or weeks. Zenith Infotech, meanwhile, has been silent since Saraf offered that open letter to partners on Oct. 14.