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

e flexibility of the
application services to manage their changing technology requirements,”
Modersitzki said. “As a leading provider of Net services software for the
Internet and ASP arena, Novell will continue to invest in and support such
companies to simplify technology by leveraging the power of the Net.”

Wizmo’s Morin said the bottom line is that it can help clients offload
their technology burden.

“These companies need to focus every resource on what’s most important,
namely, growing their bottom lines,” Morin said. “With Wizmo’s cost
effective solutions our customers eliminate the need for high up-front
capital expenditures and dedicated in-house IT resources.”

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