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VCs Establish SilverBack as Leader of the Pack

SilverBack Technologies Inc. this week secured $18.5 million in second round funding lead by a handful of strategic investors and venture capital firms.

Funding was led by Spectrum Equity Investors with key participation from Matrix Partners and North Bridge Venture Partners. Other strategic investors included Citrix Systems Inc. and PSINet Ventures.

SilverBack completed its first round of financing in July 1999 and promptly launched its innovative remote access delivery model that integrates IT management solutions for small, to medium-sized businesses. The firm intends to embark on the next phase of its plan to be the top player in the emerging Management Service Provider market segment.

SilverBack's stash of cash allows the company to pursue strategic relationships with other technology and channel partners, as well as engage in a mix of sales and marketing activities.

John Igoe, SilverBack chief executive officer, said the company is blazing a trail as a pioneering service provider in the new information economy.

"Our strategic investment partners have provided us with an unmatched complement of top advisors from the Internet infrastructure, e-commerce and service arenas," Igoe said. "It's this blend of expertise moving forward, that will truly make the difference as we work toward fulfilling our vision."

Victor Parker, Spectrum Equity general partner, said the combined expertise of SilverBack's executive team, coupled with its unique delivery approach, made the firm an extremely attractive company.

"Clearly, the MSP space is one of the fastest growing market segments in the service industry," Parker said. "SilverBack is an impressive player."

SilverBack is also a founding member of the MSP Association, an international consortium formed to define, shape and promote the emerging managed network services sector.

Analysts have not determined the difference between remote management services and outsourcing. Lacking a boundary between the two IT service segments, both vendors and end users have expressed confusion about the MSP movement.

SilverBack contends that management service providers deliver IT infrastructure services to multiple customers over a network on a subscription basis. Like an Application Service Provider, MSPs deliver services via networks that are billed to their clients on a recurring fee basis. Unlike ASPs, which deliver business applications to end users, MSPs deliver system management services to IT departments and other customers who manage their own technology assets.

Simply stated, SilverBack's Igoe said managed services are used by growing businesses that demand superior network management but don't want to sacrifice IT budgets in order to get it.