Zenith Infotech and Continuum: One Year Later

Zenith Infotech and Continuum: One Year Later

Continuum Managed Services CEO Michael George (pictured, l.) and Zenith Infotech CEO Akash Saraf (r.) run completely separate companies. But their businesses were born from the same MSP-focused code base. September 26 will mark one year since Continuum and Zenith Infotech went their separate ways. Here's a recap of that dramatic year, which featured plenty of twists and turns -- and yes, progress -- for MSPs along the way.

As you may recall:

  • Zenith Infotech in September 2011 sold its RMM (remote monitoring and management) and NOC (network operations center) businesses to Summit Partners;
  • Around the same time, Zenith Infotech defaulted on a big bond payment; and
  • Summit rebranded the Zenith RMM business as Continuum Managed Services.
Zenith Infotech and Continuum have both evolved in dramatic ways. But tensions around both businesses were running pretty high back in October 2011. Many MSPs wondered if Zenith Infotech would remain solvent following the bond default, even as CEO Akash Saraf assured partners that the company's business remained stable amid attempted negotiations with debt holders.

Meanwhile, Continuum CEO Michael George distanced his company from the Zenith Infotech bond default, assuring partners that his company had no ties to that financial matter.

Zenith Infotech: Quiet Progress

Tensions gradually eased by late 2011/early 2012. In some ways, I think the holidays distracted MSPs and the media away from Zenith Infotech's financial hiccup. By the time everyone started the New Year (2012), a lot of folks were far more focused on the nuts and bolts of their own businesses rather than worrying about Zenith Infotech's potential courtroom drama, which was unfolding very slowly in India.

Sometime in early 2012, Zenith Infotech CEO Akash Saraf (based in India) paid a five-day visit to Pittsburgh, Pa. — the company’s North America home. And then Zenith Infotech launched TigerCloud, a private cloud product that combines server, storage and network virtualization technology.

Today, more than 150 partners and customers are running TigerCloud, I've heard. Instead of hyping the system, Zenith Infotech has taken the roll out slowly -- an important step, considering some of Zenith Infotech's earlier missteps in cloud computing.

I am not suggesting Zenith Infotech is out of the woods. The company still has not resolved the bond default case. Plus, a backup and disaster recovery company recently sued Zenith Infotech, staking a claim to some of the money Zenith Infotech earned from the RMM company sale. (Zenith Infotech says the suit is without merit.)

But if you compare the mood around Zenith Infotech today to the mood around October 2011, things are surely better.

Continuum: Dramatic Overhaul

Continuum, meanwhile, has essentially fixed its core business while extending operations in multiple directions.

CEO Michael George promised partners last year that the company would have a far more predictable development schedule, delivering RMM upgrades like clockwork. MSPs that participate in Continuum's partner advisory meetings say George has essentially fulfilled that promise.

At the same time, Continuum has inked several partnerships with such companies as:
Within the halls of Continuum, the company also built out and expanded its executive team.

By the time CompTIA Breakaway 2012 rolled around in August 2012, Continuum was showing momentum. One example: The company announced a program to help U.S. military veterans find jobs as they returned home from war. That announcement also included Continuum directing some of its profits toward the hiring effort -- a surefire sign that parent Summit Partners was confident in Continuum's business direction and financial performance.

Overall, I'm surprised by Continuum's one-year progress. Imagine buying a company, installing a new management team, creating and promoting a new corporate brand, polishing your existing code base and inking several partnerships in a 12-month window. Then, toss in a bond default distraction that really doesn't involve your company. That's a lot for any company to manage.

But I also sense more Continuum moves are coming. I suspect CEO George has been poking around the market -- looking to make an acquisition that will add even more value to Continuum's software and NOC services portfolio. (That's just my hunch...)

The Usual Qualifiers

Admittedly, I'm missing some key facts:
  • I don't know if Continuum and Zenith Infotech are each generating profits -- and profitable growth.
  • Nor do I know how the Zenith Infotech bond default will play out.
In the days and weeks ahead, I hope to compare my thoughts above with thoughts directly from Continuum CEO Michael George and Zenith Infotech CEO Akash Saraf. Stay tuned for multiple blogs to follow.

Are my hunches on the mark? Or would George and Saraf describe the past, present and future of their respective companies differently? More thoughts soon on both companies, which truly have gone their separate ways in the past year -- even as they maintained RMM and BDR integrations along the way.
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