Savvis Stock Soars on Strong Earnings

Shares of Savvis Inc. (SVVS) soared today on signs that the financial sector will continue to invest in data center services. The managed hosting company, which relies on the financial sector for 27 percent of its revenue, said it doesn’t expect the recent turmoil to impact its revenue, and may even benefit as newly-merged banking firms look to data center outsourcing as a way to reduce costs. “The potential exists for Savvis to expand these relationships as merged companies seek out savings,” said CEO Phil Koen.

Shares of Savvis are up $2.58 to $8.48 in trading on the NASDAQ stock exchange, a gain of 41 percent on the session.

Savvis also said it has completed its data center expansion, and has no immediate plans for any new facility spending, signaling lower capital expenditures in future quarters. Koen said the company’s completion of its expansion prior to the credit crunch will bear fruit. “Our strategy of building smaller footprints and using a rapid design and build strategy to respond to changes in demand was the right one,” said Koen.

Savvis Opens Slough Data Center in UK

IT infrastructure provider Savvis has opened the doors of its new data center on the outskirts of London in Slough, the company said today. The new facility features 37,500 square feet of raised floor and marks the completion of a global data center expansion in which Savvis built eight new data centers in less than two years.

Savvis (SVVS) now has a data center footprint of 1.43 million square feet of raised floor in 29 facilities worldwide.

The Slough data centre was built to meet customer demand for managed hosting services in the UK. “Since Savvis announced the Slough data centre investment, requirements for hosting and managed services across EMEA has continued to grow and we have experienced unprecedented demand levels for hosting in Slough from companies in the UK and across the globe,” said Brian Klingbeil, Managing Director EMEA for Savvis. “This facility has been long awaited by many of our customers who are keen to view and host within the facility from the moment the doors open.”

Savvis to Launch SaaS Hosting Platform

Managed hosting provider Savvis, Inc. is launching a new solution to help independent software vendors (ISVs) offer their products as hosted applications. Savvis said the new platform is designed to meet growing demand for software as a service (SaaS)  licensing and delivery models.

Savvis (SVVS) also announced a major SaaS contract with Availity, an electronic health exchange that handles more than 500 million transactions a year between health care professionals and providers.

The new platform is designed for ISVs entering the SaaS market and existing providers who want to outsource their IT infrastructure. Savvis will partner with virtualization specialist Parallels to make it easier for software companies to port their existing products to a hosted, multi-tenant SaaS offerings on Savvis’ new platform. 

The result is an SaaS “enablement platform” in which Savvis provides infrastructure, services and partnership opportunities to software companies.

Analyst Downgrades Savvis, Citing Expenses

An industry analyst at Jefferies & Co. has downgraded Savvis Inc. (SVVS), citing increased expenses and “limited evidence of improving operations” for the managed hosting provider. Jonathan Schildkraut lowered his rating to “Hold” from “Buy” and cut his target price to $17 from $20. Shares of Savvis closed Tuesday at $14.

The financial sector is a key business focus for Savvis, making the company a target for analyst scrutiny in the wake of the current turbulence on Wall Street. In the wake of the collapses of Lehman Brothers and AIG and the sale of Merrill Lynch, analysts are bound to be re-assessing “buy” ratings on companies that might feel the ripples from the momentous shifts in the financial sector, including data center service providers. Less than two months ago Schildkraut raised his rating of Savvis from Hold to Buy, citing “increased confidence in management’s ‘08 outlook.”

Savvis Realigns Business Units

Managed hosting specialist Savvis Inc. (SVVS) today said it would organize the company under three business units: Hosting, Network and Financial Services. Savvis named Bill Fathers to oversee the realignment and manage Savvis’ business units in the U.S. Fathers, who previously served as Senior Vice President of Product Development, will “focus primarily on product design, engineering, demand creation and delivery support across three business units.”

Savvis said the change in structure reflects the “company’s commitment to improve product delivery and speed to market to maximize focus and operational efficiencies.”

“It is clear that SAVVIS has reached a stage in our growth where three clear lines of business have emerged,” said CEO Phil Koen. “Hosting, Network, and Financial Services have each grown to a size, scale and complexity level that requires them to be managed as separate business units with critical interdependencies. Bill is a proven leader and I look forward to his contributions as we focus on improving Savvis’ revenue growth, operational excellence and profitability on a global scale.”

Savvis Shares Surge After Earnings Report

Shares of Savvis Inc. (SVVS) soared 20 percent Wednesday after the managed hosting firm reported strong second quarter earnings, prompting an upgrade from an analyst. On Tuesday Savvis announced second quarter revenue of $212.9 million, a 13 percent improvement from the same period a year earlier (not counting asset sales that boosted 2Q07 results). Revenue from the company’s new data centers doubled to $14.2 million.

The strong performance reassured analysts, including one who had downgraded the stock in April after disappointing first quarter earnings. Jefferies analyst Jonathan Schildkraut increased his rating of Savvis from Hold to Buy and set a $20 price target for the stock. Schildkraut said he now has “increased confidence in management’s ‘08 outlook.” Savvis shares gained $2.79 to $16.43 Wednesday, a gain of 20.5 percent.

In the wake of a vigorous expansion of the company’s data center network, analysts have been focused on Savvis’ ability to lease space in the new facilities, while continuing to generate revenue from older sites. The company had good news on both fronts.

“We continue to see an attractive fill rate on the new data centers with about 67 percent of the colo space in the Phase I data centers sold,” said Savvis CEO Phil Koen. “We also opened the Singapore data center in July, and together with the Boston, Chicago and Dallas data centers, we’ve sold about 32% of the colo space in those centers. Our expansion IDCs (Internet data centers) continued to generate colo prices averaging just under $70 per square foot per month, while the yield per square foot, including managed hosting and network services is just over $80 per square foot in those centers.”

Savvis Opens Expanded Singapore Data Center

Managed hosting specialist Savvis Inc. (SVVS) today announced the opening of its expanded Singapore data center, which now spans more than 18,000 square feet of raised floor space. The company said the expansion builds on Savvis’ presence in Asia Pacific and demonstrates “excellent business opportunities and confidence in the market.”

In addition to its full suite of managed hosting services, Savvis will also offer financial customers in Singapore the ability to host their trading applications close to major derivatives markets through Savvis Proximity Hosting, which enables low latency network access to the Singapore Exchange.

“We are pleased to expand our presence in Asia and increase capacity for existing and new customers in the region,” said Phil Koen, Chief Executive Officer of Savvis. “In addition, many of our US and European customers are expanding their businesses into Asia and require Savvis’ flexible IT infrastructure services that can scale globally.”

CMPi in Outsourcing Deal with Savvis

Magazine publisher CMP Information (CMPi) has signed a five-year deal with Savvis Inc. (SVVS), which will host CMPi’s entire critical IT infrastructure. The deal is valued at

Savvis Secures Financing for UK Data Center

Savvis Inc. (SVVS) said today that its SAVVIS UK Ltd. subsidiary has obtained a five-year,

Thomson Reuters Extends Savvis Contract

Managed hosting provider Savvis, Inc. (SVVS) has announced a one-year extension of its master services agreement with Thomson Reuters that includes the deployment of IT infrastructure services in Asia. Savvis also said it has opened its new Chicago data center.

Reuters, a long-time customer of Savvis, was recently purchased by Thomson. The merger created some suspense about the renewal of the contract, which was valued at approximately $50 million. Securities analysts who track Savvis had been keenly focused on the status of the Reuters deal, which represented significant revenue for the company.

Under terms of the agreement, Savvis will continue to serve as an approved vendor to provide managed hosting and managed network solutions to support the collection of exchange data for Thomson Reuters (RTRSY) market data services worldwide, as well as managed hosting services that underpin the flagship ThomsonReuters.com website. Savvis will also provide managed hosting services delivered from its Singapore data center supporting Thomson Reuters expansion activities in Asia.