RealTime IT News

Wizmo Picks Up $28 Million, Industry Allies

E-business application service provider Wizmo Inc. Tuesday secured second round private financing to the tune of $28 million.

New York City investment firm Sandler Capital Management led the financial deal.

Wizmo's mission is to simplify technology for its clients. It delivers information technology and e-business services to small and medium businesses. Currently the company provides online services to serves more than 3,000 customers over 30,000 desktops nationwide.

Novell Inc., and Hewlett Packard Co. bought into the Minnesota-based ASP's business plan in a big way, setting the groundwork for extended strategic alliances and joining Sandler in its investment plan.

Samantha McCuen, Sandler managing director said Wizmo is unique in its ability to allow organizations to manage their technology investments in a new way.

"Rather than small and medium businesses investing in expensive IT infrastructure, applications and hardware, Wizmo enables them to substantially reduce costs by outsourcing their IT requirements," McCuen said.

"This allows these organizations to focus on growing their business rather than diverting attention to their IT environment. This is leading-edge technology and we view it as the primary way IT organizations will be managed at small and medium businesses," McCuen added.

James E. Kopp, Wizmo chief executive officer said it could support virtually any mission-critical or desktop application from its central hosting servers.

"Wizmo's vision, leadership, people and partnerships will enable us to quickly emerge as the foremost e-business services firm for small- and medium-sized organizations around the world," Kopp said.

Wizmo will use the financing to expand relationships with U.S. resellers around the nation and seek to establish its services on a global level scale.

The $28 million also enables Wizmo to expand its sales, marketing and distribution initiatives, enhance its technical infrastructure, and further establish Wizmo's brand name as a premier e-business consulting and application service provider.

Timothy J. Morin, Wizmo chairman, said the financing keeps the firm on track to emerge as a leader of the growing technology outsourcing market.

"The confidence in our business model, our leadership team and the progress we've made to date is reinforced by the commitment of Sandler Capital, Novell, and HP," Morin said.

Eric Klein, Yankee Group senior analyst, said Wizmo may not have name brand recognition at the moment, but it would firmly establish its presence in the ASP arena in the near future.

"While Wizmo is a new brand name, the company has been serving the small and medium business market for some time," Klein said.

"The rapid pace of technology has forever changed the traditional valued-added reseller model and has forced VARs to change the manner in which they deliver products and services to their customer base," Klein continued. "Wizmo reacted early, adjusted its business model, and is now well positioned to serve the small and medium business market and to grow its customer base."

Additionally, Novell and Wizmo entered into a strategic partnership. The alliance grants Wizmo access to Novell's reseller marketing channel, opening up access to a new list of prospective clients.

Other deals call for Wizmo to use HP and Novell technology to power its application services portfolio.

Blake Modersitzki, Novell Ventures vice president, said it believes that the e-services Wizmo's services provide a better way to do businesses on the Web.

"Small and medium-sized companies benefit from th