Zultys founder Iain Milnes has vowed his new voice over IP venture, Zed-3, will be profitable before he begins to court the UK and European channel.

California-based Zed-3, founded by Milnes in January, is based on the assets of an established Korean vendor.

Milnes, who poured $67m into Zultys before it went bankrupt in Autumn, plans to rapidly shift Zed-3’s focus from OEMs to the channel.

He told CRN: “We will be profitable within a short space of time by focusing on Asia, where there is a lower cost of doing business.

“This will give us a solid foundation from which to develop the UK and European market. I disappointed a lot of distributors, resellers and customers last time around and I don’t want to do the same thing again.”

Zed-3 is poised to launch a 500-user system that Milnes claimed would appeal to margin-hungry UK resellers more than its existing 30- and 100-user systems. He said the technology is similar to that of Zultys, but available at much lower price points.

The channel veteran added that he is close to appointing a UK country manager and hopes to have signed two distributors and 30 resellers as Zed-3 partners by the end of 2008.

Grahame Smee, managing director of distributor Cohort Technologies, said: “Iain has a way to go to regain credibility in the UK, but if he can grow the business to a reasonable size before setting up in Europe it may help win back resellers.”

Keith Reading, managing director of Zultys reseller QoLcom, said: “Iain got into SIP telephony too early with Zultys and spent 99 per cent of his time educating the market. I would imagine he will have more success second time around.”

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