How Zenith Infotech Should Address the Elephant In the Room

Give Zenith Infotech credit. The company remains on the road at trade shows and conferences across North America, even as Zenith Infotech tries to navigate a recent debt default. But here's the glaring problem: During a keynote session at today's ASCII conference in New Jersey, Zenith Infotech launched into a cloud computing educational session but failed to address the elephant in the room: The company's financial viability amid the bond default. Here's how Zenith Infotech has to adjust its public messaging going forward, especially ahead of the larger IT Nation conference in November 2011.

First, some background: I'm not looking to throw Zenith Infotech's conference speakers under the bus. They are attending conferences to promote Zenith Infotech's SmartStyle cloud initiatives to VARs and MSPs. It's critically important for Zenith Infotech to maintain its industry presence amid the bond default. Smart. But Zenith Infotech must arm its employees with an opening statement at each keynote... something that addresses -- at least somewhat -- the obvious attendee questions right up front, which likely include:

  • What's the status of Zenith Infotech's debt default, and the potential implications for VARs and MSPs?
  • What assurances do Zenith Infotech partners have as Zenith Infotech navigates a legal petition filed by bondholders in India?
During meetings in Manhattan and New Jersey this week, multiple MSPs asked me those two questions before I even had a chance to say "hello."

Next Moves

Going forward, Zenith Infotech's road warriors need a standardized opening statement for all public engagements. The statement needs to reiterate Zenith Infotech CEO Akash Saraf's own statement: Yes, Zenith Infotech defaulted on a bond payment, but the company remains financially solvent, strong and stable. The potential evidence: Zenith Infotech is on the road meeting with customers and honoring all warrantees. End of statement because the situation is still working its way through the courts in India.

A few more of my personal thoughts:
  • I'm not suggesting that MSPs should simply listen to blanket statements and proceed without doing some homework. In any vendor engagement, you should check your potential partner's financial viability.
  • I'm not suggesting that Zenith Infotech CEO Akash Saraf's statement about the bond default is the "perfect" reply to MSP inquiries. But at least it's a statement. And that answer has to be repeated in public each time Zenith Infotech takes the stage.
Without a prepared statement, Zenith Infotech's public appearances will magnify a major market disconnect: Zenith Infotech is on stage pitching the cloud; the audience is wondering about the company's financial footing; and rivals are trying to drive a wedge between Zenith Infotech and its MSPs.

Admittedly, full disclosure likely isn't possible as Zenith Infotech tries to develop a new debt agreement with bondholders. But on the other hand: Total silence about the debt issue during industry keynotes also isn't an option.
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