ZDS largely avoided the retail consumer market, instead focusing on selling directly to businesses, educational institutions, and government agencies.

In 1986, the company made headlines when it beat out IBM for a contract with the Internal Revenue Service to supply a portable computer.

The following year saw ZDS floundering in multiple ways, including a cancelled contract with the Navy and a botched bid to increase its consumer desktop sales.

[3] Heath had a loyal fanbase comprising computing enthusiasts and scientific engineers by the time Zenith acquired the company in 1979.

[10]: 24  The company also continued Heath's practice of publishing unusually clear product documentation,[11]: 257 [12]: 47  distributing schematics, and selling the source code to HDOS and other software in printed form.

[3] Targeted at business professionals, it had both the Intel 8085 and 8088 microprocessors; five S-100 bus slots for expansion; and an integrated high-resolution graphics chip with color capability.

[14]: 94  While lacking in the PC-compatibility department, the Z-100 proved popular as a bridge machine for CP/M developers who wanted to get a head start on DOS and x86 programming.

[22]: 15  After a failed bid to sell their computer systems at college bookstores, ZDS found success in marketing to fraternities and sororities directly in 1985.

[21] ZDS CEO Robert Dilworth, attributed its success to recognizing, unlike other computer companies, that the PC compatible was a commodity with falling prices like televisions: "Basically, we move boxes".

[20]: 127  ZDS's 1985 revenue grew to $352 million, and in March 1986 The New York Times called the division's success one of Zenith Electronics' "proudest accomplishments", amid the parent company's losses in the television market against Japanese competition.

[24]: 563  One unique feature of most ZDS's PC-compatible systems is the key combination Ctrl+Alt+Ins, which interrupts the running program and break into a machine-language monitor.

[4]: 157  Also in 1985, the company introduced the Z-148, one of the most inexpensive IBM PC-compatibles on the market at the time, with a suggested retail price of $2,200 (with typical resellers discounts lowering this figure substantially, according to InfoWorld).

[29] ZDS shocked industry observers in early 1986 when it was awarded a contract to sell 20,000 Z-171s worth $27 million to the IRS, beating out IBM and their PC Convertible.

[34][35]: 141  The SupersPort was very successful for ZDS, with the company reportedly selling over 173,000 units, cornering between 23 and 25 percent of the entire laptop market at the time.

[32] ZDS's success allowed them to sponsor the Full Members' Cup, a football competition in the United Kingdom, starting in 1989 until the latter's discontinuation in 1992.

[40] Its MinisPort subnotebook, which made use of a special 2-inch floppy disk format as the primary means of transferring data to and from the machine, sold more slowly than anticipated.

Zenith Electronics cut spending to ZDS's research and development operations in preparation for selling the subsidiary to the highest bidder.

[47] ZDS retained their old St. Joseph headquarters, refactoring it into a full-on engineering facility and manufacturing plant for the company's desktop computers.

The company also increased their investments in research and development, with expenditures in 1991 being 25 percent higher than the previous year, this trend following apace for 1992.

In November that year, they and several other large computer companies, including Apple, lost a bid to supply the Department of Defense with 300,000 desktop computers, the winning bid valuated at $1 billion split between rival manufacturer CompuAdd Corporation of Austin, Texas, and systems integrator Sysorex Information Systems of Falls Church, Virginia.

[52] ZDS however won a bid to supply the Pentagon with 300,000 desktops worth $740 million in September 1992, this time beating out CompuAdd and Sysorex.

[24]: 563  The Z-Lite, the company's second attempt at a subnotebook, was co-designed by Frog of Germany, featuring an 8.5-inch LCD while weighing only 3.9 pounds (1.8 kg).

The company's officials cited a change in consumer purchasing behavior favoring superstore outlets (a sales channel in which ZDS had only a limited presence) as a reason for this decline.

The company hoped that the direct sales approach would increase brand recognition and reach customers who were not targeted by other marketing channels.

[62] Under Noels' leadership, ZDS launched several new products, including the Z-Lite 425L, an upgraded version of their subnotebook featuring an i486SL processor clocked at 25 MHz;[63]: 61  the Z-Notepad, a pen-enabled version of their Z-Note laptop;[64] and the Z-Star V33VL series, a 486-based notebook PC line comprising three models, all featuring Cyrix's energy-conservant Cx486SLC microprocessor clocked at 33 MHz.

[65][66] ZDS also launched a new series of desktop PCs, the Z-Select 100 line, which came pre-installed with networking software compatible with Novell NetWare, Banyan VINES, and Microsoft LAN Manager.

[67] In 1993, Groupe Bull purchased a 19.9 percent stake in Packard Bell, then the fourth-largest PC seller in the United States (behind Apple, IBM, and Compaq), representing an undisclosed price.

The Z-Noteflex also possessed an internal VESA local bus, allowing expansion cards based on this architecture to be installed into the computer with the optional Flexshow docking station.