Lawsuit Against Zenith Infotech, Continuum: Some Background

Note: Just be sure you read the entire blog, folks. My closing opinions at the end. No big fireworks but I wrote this to answer some reader inquiries I received. DSSDR has filed suit against Zenith Infotech and CEO Akash Saraf; Continuum and CEO Michael George; and Summit Partners. Each defendant in the case says the suit is without merit. I am not in a position to predict a “legal” outcome but generally speaking I don’t think managed services providers (MSPs) running Zenith Infotech and/or Continuum should be worried about the suit. Here’s why.

First some background: Zenith Infotech sold its RMM (remote monitoring and management) software business to Summit Partners in September 2011. Summit essentially renamed and expanded the business as Continuum.

Meanwhile, Zenith Infotech apparently licenses backup-related technology from DSSDR. As part of that relationship, DSSDR apparently claims it is entitled to some proceeds from the Continuum sale to Summit Partners. Note: The Continuum sale did not involve Zenith Infotech’s backup and disaster recovery business.

According to Business Standard, Zenith Infotech CEO Akash Saraf said the lawsuit is frivolous and without merit. Likewise, Continuum CEO Michael George told MSPmentor he considers the lawsuit against him, his company and Summit Partners to be without merit and “completely shocking.”

MSPmentor has reached out to DSSDR CEO Andrew Bensinger, through his company’s website, for comment. Also, MSPmentor has not read DSSDR’s full complaint against Zenith Infotech and Continuum.

Chatter about the lawsuit hit my inbox this evening, with some readers asking me if there are any reasons for MSPs to be concerned. Some MSPs are sensitive right now because Zenith Infotech defaulted on a bond payment in 2011, and emerging cloud BDR player Doyenz — also a storage partner to MSPs — recently closed a European cloud and had layoffs.

Again, I’m not a legal expert. I can’t predict who will “win” or “lose” the case. If DSSDR has a legitimate case we’ll track it. But regardless of outcome I don’t think the case will impact any MSPs running Zenith Infotech or Continuum. If my opinion changes I’ll be sure to post an update. In the meantime: Nothing urgent to see here; move along.