Intermedia Expands Cloud Footprint With Zlago Acquisition

Intermedia, a major provider of hosted Microsoft Exchange services, has acquired cloud services vendor Zlago in a move Intermedia said will expand its cloud services portfolio and expertise.

Zlago founder and CEO Michael Gold, will join Intermedia as the company's president, the companies said Tuesday.

Gold reports to Intermedia CEO Phil Koen, who was just named to that post last month after Intermedia was acquired by venture capital firm Oak Hill Capital Partners for an undisclosed sum.

Intermedia, in a statement, said the Zlago acquisition "was executed as part of Intermedia's recent acquisition" by Oak Hill Capital Partners, although Zlago is not one of the venture capital company's investments.

Intermedia is best known for providing hosted Microsoft Exchange e-mail services, managing 320,000 Exchange mailboxes for some 38,000 small and mid-size customers.

In the last year Intermedia has been expanding its offerings to include hosted PBX, e-mail encryption and backup services. That expansion will accelerate with the acquisition of Zlago, which sells a variety of cloud services including hosted desktops, Software-as-a-Service business applications, security, disaster recovery, backup, Exchange, SharePoint and PBX/VoIP.

Zlago is particularly known for developing bundles of cloud services for vertical industries, including legal and financial companies and the "Doctors Office in the Cloud" bundle for the medical industry. "Each of these verticals have their own specific needs," Gold said in a phone interview.

"The Zlago acquisition will not only extend the level of cloud expertise within Intermedia, but it will also prove to be a catalyst for strategic growth within the Intermedia cloud services portfolio," CEO Koen said in a statement.

"Intermedia gains Michael Gold's management, cloud and channel expertise – as well as important Zlago resources, such as deep relationships in the channel community. With Oak Hill's resources behind Intermedia, we intend to build the leading provider of cloud services," Koen said.

CRN recently named Gold as one of the industry's 25 most innovative executives.

NEXT: Channel Partner Plans

Much of Intermedia's business is conducted through its 6,800 global channel partners. The company also has an alliance with distributor Ingram Micro through which some solution providers obtain the hosted Exchange service.

Zlago has about 200 channel partners and a distribution relationship with Synnex that's expected to continue. Intermedia said service delivery to Zlago customers and partners will continue uninterrupted. Gold said he intends to work to bring those partners into the Intermedia fold, continuing to offer them what Zlago provided, as well as resources provided through the Intermedia partner program, such as complimentary migration to cloud services, a partner portal, and sales and marketing support.

Gold made it clear that the channel is a critical element of the Intermedia-Zlago combination going forward in helping businesses adopt cloud computing. "Many VARs and solution providers in the U.S. have long been the trusted advisor to the lion's share of small and mid-size businesses," he said. "The channel is core to Intermedia's future."

One element of Zlago's business was providing resources, including packaged services, and sales and marketing tools, to help channel partners migrate to cloud computing.

’Having been in business over 25 years as a VAR and managed service provider, we’ve built solutions and resold software from dozens of vendor providers," said Steve Harper, president and CEO of NMGI, a managed service provider and Zlago partner, in a statement. "As one of those providers, Zlago has set itself apart by doing many things very well, with two items in particular that really stand out. First, they simplify the delivery of a variety of cloud services to our small and mid-size customers. And second, they have positioned and empowered NMGI as a reseller to build real, significant, and sustainable pieces of new business.

"We signed on as Zlago’s first partner because of their vision, drive, passion, and commitment," Harper said. "We are excited to see that Intermedia’s approach to the reseller community is similar. Our relationship will continue to grow with Intermedia.’