Nexserver's demise feeds tech firms' growth
The demise of a local technology company is fueling growth at two others. ProServe LLP of Amherst has assumed tech support for the Nexserver product formerly sold and supported by Nexserver Inc.; while 360 Professional Services Group LLC (360 PSG) is providing software services for customers formerly served by Nexserver PSG.
The Nexserver sister companies closed in January 2005 and last September, respectively, according to Robert Morgan, who was president of both companies.
"It was just the end of life for the product," said Morgan, who joined LPCiminelli in October as senior director of marketing and business development. "We stopped engineering on the product about 24 months ago and discontinued support of the product close to a year ago, but continued to have the software design business."
When Morgan was offered the position at LPCiminelli, he took the opportunity to dissolve the company and move on, referring Nexserver clients to an engineer previously employed at the company, he said.
The Nexserver device, a multi-functional server unit, was originally created in the late 1990s by Syrinex Communications Corp. When the company shut down in 2001, the product was purchased along with other intellectual property by Morgan, who had been marketing manager at Syrinex before starting up his own company, Convergence Datacom LLC. He later changed the name to Nexserver Inc.
In 2004, Morgan spun off Nexserver PSG, providing software design and other services; while Nexserver Inc. remained focused on sales of the server product. At the time, the two companies employed nine between them and had combined revenues of more than million.
Morgan said the cost of keeping up with technology changes, in terms of research and development, did not justify the return.
"We had a product that had a technological head start when we launched the company, but people just started catching up with us and we didn't have the capacity to make the investment to keep ahead of the curve," he said.
When Morgan dissolved the software side of the business in September, his employees Joel Colombo and Matthew Whelan teamed up to start 360PSG, signing up many of the same customers.
"We started this out of the ashes," Colombo said, adding that all but one customer came over. "We didn't want to let the customers fall apart so we started a new company, offering the software and Web services that Nexserver PSG had offered."
Operating from offices on Ridge Lea Road in Amherst, the business offers software design, Web design and consulting to small and medium-sized businesses.
On the hardware side, ProServe began offering tech support for Nexserver users in December after hearing from a customer who was having trouble finding help, said Craig Miller, senior vice president. Miller's business, which had previously sold the Nexserver unit, has reached out to 136 Nexserver customers in New York, and has provided support to more than 60 so far. It has also been contacted by users as far away as St. Louis.
"We took support calls from people who found us on the Internet and asked us if we'd be willing to take over more of the support so we started offering three-month support contracts," Miller said. ProServe, founded in 1996, provides a range of technology services from offices in Amherst and Rochester.
Moving forward, ProServe is encouraging Nexserver users to adopt alternative products that can be better supported. On its Web site, ProServe warns users that the Nexserver units are vulnerable to viruses and spam and will eventually be rendered obsolete because there will be no updates from the manufacturer.
Miller said he has identified a company that has a comparable server product, with about 80,000 in use worldwide.
"It's very similar, does everything that Nexserver does plus a whole lot more," he said. "We want to get them into an appliance that we can support moving into the future should something fail on the software/hardware side."