Zenith Infotech Clampdown On License Abuse Creates Partner Issues

Zenith Infotech implemented a set of "checks and balances" measures late in December in an effort to thwart what the company says is a small number of partners misusing licenses for its Backup and Disaster Recovery (BDR) solutions.

But the measures also led to problems for some "clean" partners who could not activate or reactivate their server backup licenses on behalf of clients. In at least one case, an end user was left in the lurch when a server failed and the VAR couldn't provide them with a clean backup image.

Several Zenith Infotech partners contacted by CRN said the glitch has impacted their business and they were frustrated by a lack of communication from the company regarding the issue. None of them had been told about the new checks and balances, they said.

Zenith was forced to clamp down on license abuse, said CEO Akash Saraf, because some partners were buying a Zenith Infotech BDR appliance which comes bundled with a certain number of licenses. Zenith found evidence that some partners were installing and then deactivating the licenses and reactivating them on different machines, in essence shifting the licenses around to avoid paying for a license for each machine, Saraf said.

"People found workarounds. They were moving a [license] to have backup somewhere else," Saraf said.

Saraf compared the misuse to a customer that calls Microsoft to get a new license key for an additional PC or server. "If a machine crashes, you can get a temporary key. But when you call five times in the matter of a month, they would start to suspect something was going on," Saraf said.

"We regret the inconvenience. Some partners unfortunately had some issues. I'm not accusing any partners. Some good partners got caught in the process," Saraf said.

Tim Klan, president of Expert Computers, an Erie, Pa.-based Zenith Infotech partner, ran into problems when a customer's server failed and he was not able to provide a backup image through Zenith Infotech's platform because he couldn't get a reactivation license. His staff spent about two days doing it manually and he went two weeks without a response from the company, he said.

"I've been a Zenith partner until 2008 and it's gone pretty well until recently. My biggest fear is that I don't know what to do at this point. They said they aware it's down and it's all they can do," Klan said earlier this week.

John Motazedi, president of SNC Squared, a Joplin, Mo.-based VAR, had issues activating some Zenith Infotech licenses the last two weeks, a process which usually runs smoothly, but he didn't get any help until he had opened several support cases because scheduled backups were not occurring.

"They worked with us through the problems, but they used to automatically supply the licenses and it all worked. Now I have an engineer checking backups on 156 servers every day. Now we have to give [Zenith Infotech] a nudge if there's a problem," Motazedi said.

Next: 'We Will Fix This'

Motazedi said Zenith's customer support has waned in recent months and communication from the company is scant. "The thing I liked about the old Zenith is they were proactive. They always called me. Now it just seems like they're not keeping us in the loop," he said.

Motazedi still counts Zenith Infotech as a strong partner, one that helped him get customers up and running after a tornado destroyed his office in Joplin last year. "We're still working with them. Just keep me in the loop. It would have been nice to know that [checks and balances processes were implemented]," he said.

The number of partners abusing the system was "sub 1 percent," but it was a big enough problem that it had to be addressed, Saraf said. Zenith Infotech chose the end of the year to deploy the checks and balances process because traditionally that's been a quieter period in terms of activations and reactivations compared to other times of the year, Saraf said.

"Because of the misuse, we had to make a good number of partners jump through hoops. We rergret that. But we had to find some way to clamp down on misuse," Saraf said. "There are people that want to take advantage. But it is our mistake. We will fix this."