Zultys: New Partnerships, Products, Point to Turnaround

Nearly two years after going bankrupt, laying off employees, and losing partners left and right, Zultys Technologies is back and going strong. The Silicon Valley-based IP equipment maker has spent the intervening months regrouping with new management and investors, and new products and partnerships. The efforts, it appears, are paying off.

Still, it was somewhat of a shock when Zultys said May 2 it was getting new leadership. Again. Zultys trumpeted the receipt of another, undisclosed amount of financing and, buried in the press release, thanked Avi Weinrib for helping turn around Zultys. Weinrib had served as president and CEO for only 18 months. His telecom equipment manufacturing company, Israel’s Telrad Connegy, had taken over Zultys in January 2007. His quick departure seemed to signal more troubles, but the two executives heading Zultys while the search goes on for a new leader, said that isn’t the case.

Weinrib runs several businesses and constantly is traveling the globe, said Vladimir Movshovich, vice president of technology for Zultys. “It was all too much for one person,” he said.

Zultys aimed to have Weinrib’s successor in place by July 1, said Jonna Paquette, Zultys’ vice president of sales and marketing. In the meantime, she noted, employee morale is “spectacular. Everybody is truly involved in the business and everybody makes a difference every single day.”

That sounds like company hype until you consider partner feedback, gathered independently of Zultys.

“We’re very happy campers,” said Greg Still, managing partner for Xiologix Corp., a reseller that, in 2006, vowed to stick with Zultys through the bad times. The Oregon company did just that and has no regrets.

“Zultys is extremely innovative, the technology is bulletproof and customers are really enjoying the stability of the technology that they’ve experienced over the last year. Plus, since the new group took [Zultys] over, the features are working as promised,” said Still.

Zultys also landed a major coup when, in March, it resurrected its partnership with Technology Assurance Group (TAG National), a training organization and buying consortium for telecom dealers. Dale Stein, co-founder of TAG National, said his company had worked with Zultys before, but distanced itself as management and money matters consumed the equipment maker. Now, he said, is a good time for TAG National to align itself with Zultys, especially as SIP outpaces TDM year after year.

Dale Johnson, president and CEO of TAG National, agreed. TAG National’s relationship with Zultys is “really, really positive,” he said. He said he’s hearing little hesitancy from members about Zultys, given its past problems. Overall, he said, Zultys’ “SIP communication solutions are in the realm of those we believe will most benefit the communities we serve.”

Paquette concurred, noting, “Just because we’re part of TAG doesn’t mean that their dealers have to carry us, but it’s a nice shot in the arm.” The deal, she said, “gave us entrée to a lot of quality resellers.”

TAG National isn’t the only relationship Zultys has been able to start anew. Last year, it salvaged its broken ties with BandTel LLC and nexVortex Inc., a SIP trunking and audio conferencing wholesaler.

To top it all off, Zultys continues to sign new deals, such as its recent contract with distributor NETXUSA and OEM pact with Aastra Telecom. Indeed, that relationship is soaring with the release of the ZIP 5xi phones and expansion modules, which Aastra designed and engineered. ZIP 5xi debuted alongside the fourth version of Zultys’ Media eXchange server software on May 14.

Being able to private-label the Aastra phone “has just lit up our channel like crazy,” said Paquette. “Everybody said our phone was ugly and it held back sales.” That has changed, she said, and features such as custom caller ID are giving resellers even more talking points. The system includes improved interactivity among users, even those who are remote, and works better with Intel-powered Macintosh computers, Zultys said.

Much of Zultys’ momentum seems to be coming from its mystery financier and owner, whom executives only will refer to as an angel investor. That entity pumped more money into Zultys in May; the amount remains unknown but Movshovich said it’s enough to cover operations through the end of the year.