Zultys Reseller Update

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Rich Tehrani
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Zultys Reseller Update

I received a call from a Zultys reseller today who was discussing the fact that Zultys has filed for Chapter 11. The VAR requested to stay anonymous.

According to this reseller the entire channel is very dedicated to the company and the customers. Apparently the VARS are having trouble finding a Zultys replacement -- they love the native SIP support and built-in redundancy. According to this reseller, many dealers have lots of sales pending in the pipeline

"The channel got caught by surprise as sales were doing very well," this reseller told me.

The irony in the story is that according to this reseller, "There is enough money in the pipeline to pay for the purchase the company!" I am not sure how he would know this but perhaps the point s sales are doing extremely well -- better than ever it seems.

According to my source, Zultys is trying to come up with a management buyout and other PBX vendors are looking to buy the company as well. What is upsetting to the channel is the fact the company has just released the 3.0 firmware edition as well as WiFi and other phones. The channel was very pumped until they heard the bad news.

My source had a quarter million dollars in pipeline to close the week of the Chapter 11 announcement. Others had huge opportunities that were taking place right at this time as well.

I asked if they are still selling Zultys systems and was told by the caller that they are not selling systems to new users until they know what is happening with the company.

Even still they have done $50k in the last week and a half to existing customers and not on a fire sale basis.

The Chapter 11 auction takes place in mid-October. A group of VARS are looking to buy the company as well. The VARs are approaching Zultys customers and venture capitalists to not let the company go away.

This VAR feels that other perspective bidders should know how strong the channel is. He wants to make sure that prospective bidders are aware of this. His concern is that the resellers don't have a voice on the matter. He thinks it is an important story to be told. I agree.

I plan on meeting with a number of resellers at Internet Telephony Conference & Expo to see if I can assist in any way but as this reseller said, the whole matter may be resolved by then. We will be sure to keep you informed on the matter. Please check my blog frequently for updates and also set a Zultys TMCnet News Alert to be notified of any pending Zultys stories.
 
Update: (Oct 2, 2006) Please check out Zultys Restructuring Documents


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