Subscribe to our Data Center Newsletter or get a daily summary by e-mail.

Savvis Plans New London Data Center

Savvis Inc. (SVVS), will open a new data center in London in response to strong business demand for more space, power and managed IT services in the UK, the company said today.

The data center in Slough, Berkshire is part of a $400 million global investment by Savvis in new facilities and network assets across Europe, Asia and North America over a two year period. The London area facility is scheduled to open in the fourth quarter of 2008.

Savvis said it decided to locate the data center outside the M25 (the London "beltway") and closer to the grid to "overcome space and power challenges often associated with central London facilities." The Slough facility will have direct connectivity to SAVVIS’ data centers near Reading and in London’s Docklands, allowing customers in those facilities to store data for disaster recovery. Slough is also the site of data centers for Rackspace and Equinix (EQIX).

Posted by Rich Miller May 14, 2008 | Permalink | Newsletter

April 30, 2008

Savvis Shares Slide 24 Percent

It's been a tough morning for Savvis (SVVS). The fallout on Wall Street from last night's earnings and guidance disappointment has been swift. Savvis shares are down $4.52 to $14.16 a share, a decline of 24 percent from yesterday's close. Analysts at Lehman Brothers, Jefferies & Co. and Kaufman Bros. all downgraded Savvis this morning after the company lowered its revenue guidance for the year, saying it was taking longer to close sales of managed hosting services.

This morning, the popular news site Slashdot was offline for nearly five hours, along with other sites operated by Sourceforge.net (LNUX). "Some planned downtime from our provider apparently didn't come back up quite as planned," wrote Slashdot co-founder Rob "CmdrTaco" Malda. Sourceforge.net's sites are hosted by Savvis.

Posted by Rich Miller April 30, 2008 | Permalink | Newsletter

Reuters Renewal Looms Large for Savvis

In last night's conference call with analysts, executives of Savvis (SVVS) said that a number of potentially large customers were taking longer to make decisions about lucrative managed hosting deals. One key deal that's going down to the wire is a hosting and network services contract with Reuters, which expires next month. Reuters was recently purchased by Thomson, which has created some suspense about the service renewal. Here are comments from Savvis Chief Financial Officer Jeffrey Von Deylen:

Reuters today roughly is about a $50 million account. ... Essentially in the past two and a half years, they've had an opportunity on the legacy network business to migrate if they so choose and they have decided not to. So we're working aggressively with them as they think about their Thompson/Reuters merger. ... But they haven't given us any clear signals one way or the other which way they're going. We'll continue to work with them and I think we'll kind of get our niches on the network side, and then continue to try to meet their needs on the hosting side.

There was also discussion of power density in older data centers and its impact on demand for space.

Posted by Rich Miller April 30, 2008 | Permalink | Newsletter

April 29, 2008

Savvis Cuts Guidance, Citing Slower Sales

Savvis Inc. (SVVS) lowered its revenue guidance for the year, saying it was taking longer to close sales of managed hosting services. The company reduced its 2008 revenue projection to a range of $840 million to $870 million, down from earlier projections of $910 million to $925 million. After closing today's session down 6 percent at $18.68, Savvis shares fell sharply in after-hours action, trading down $2.73 at $15.95, a decline of 14.6 percent.

"We have begun to see a lengthening pipeline," said Savvis Chief Executive Officer Phil Koen. "The deals we want are taking longer to close. We also were overambitious with our sales projections for the second half of 2007." Koen said CEOs and CIOs "are being more cautious with spending in the second half of the year, particularly with the more complex commitment of a buy decision for managed hosting."

The Savvis results will prompt close scrutiny of earnings reports for other managed hosting providers, as analysts assess whether the slowing sales cycle is specific to Savvis or reflects a broader trend in the uptake of managed hosting services. A key question is whether carrier-neutral providers will fare any better than Savvis, which operates its own backbone and bundles network services and managed hosting.

Posted by Rich Miller April 29, 2008 | Permalink | Newsletter

April 14, 2008

Savvis Expands Dallas Data Center

Savvis Inc. (SVVS) has opened a second data center in Irving, Texas to meet strong demand in the Dallas market. One-third of the $50 million, 37,000-square-foot center is already leased, said Jim Kozlowski, vice president of hosting services for Savvis. Kozlowski told the Dallas Morning News that the company is likely to add a third expansion phase of 45,000 square feet within a year to 18 months.

The new space continues the robust growth for data center providers in the Dallas area. Last week CyrusOne announced it was building a new Dallas data center, while SoftLayer and Telx have also added space in recent months. Dataside will also be expanding its Dallas data center footprint in the wake of its recent acquisition by Denver-based ViaWest.

Posted by Rich Miller April 14, 2008 | Permalink | Newsletter

March 21, 2008

Capazoo Fires Staff, Shops Company

Social networking site Capazoo has reportedly fired its staff and may be trying to shop itself to potential buyers. Montreal media reports say the company's co-founders are in the midst of a legal dispute.

In Nov. 2007, Capazoo announced that it had signed a $5 million, three-year agreement with Savvis Inc. (SVVS) for a fully-managed IT infrastructure solution. Savvis deployed Capazoo's equipment in its new Boston data center, including virtualized servers and storage systems, distributed denial of service (DDOS) and intrusion detection systems. At the time, Capazoo estimated that its infrastructure spending with Savvis would eventually surpass $20 million.

Posted by Rich Miller March 21, 2008 | Permalink | Newsletter

March 11, 2008

Savvis Gets Visibility from McCain Visit

IT infrastructure provider Savvis Inc. (SVVS) is showing up in a lot of news stories today after an appearance by Sen. John McCain, the Republican presidential hopeful. McCain held a town hall meeting at Savvis headquarters outside St. Louis, in which he fielded questions from Savvis employees. The town hall meeting was not public, but McCain had a press availability afterwards. Here's an outtake from the AP coverage:

(McCain) said the host for the meeting, Savvis, is providing the kind of jobs crucial to the transition from a Rust Belt industrial economy to an intellectual economy. "We're in an informational-technological revolution," McCain said. "And they need trained and educated workers. That is vital to giving Americans another chance."

For those interested in the politics of the event, there are dozens of news stories on various web sites with additional information about McCain's appearance. There are also several photos of McCain speaking to Savvis employees.

Posted by Rich Miller March 11, 2008 | Permalink | Newsletter

February 06, 2008

Savvis Wraps Up A 'Transition Year'

Savvis Inc. (SVVS) says 2007 was a "year of transition" as it sold off its content delivery network and two large facility leases, refined its focus on managed hosting and financial services, and expanded its data center footprint. As it looks to 2008, the managed hosting provider hopes to build its high-margin utility hosting and proximity hosting businesses, and capture the benefits of higher pricing in the colocation market.

Savvis reviewed its 2007 results and outlined its goals for 2008 in a conference call Monday with securities analysts. The company predicted its 2008 revenue will climb between 15 percent and 17 percent and exceed Wall Street forecasts.

CEO Philip Koen called 2007 "a challenging but ultimately successful transition year." Koen said Savvis has been "very successful" in selling space in the four new data centers it brought online in September and October in four markets – Piscataway, NJ; Santa Clara, Calif.; Sterling, Va. and Atlanta. "We already have signed contracts for 40,000 square feet of about 100,000 square feet of sellable space," Koen said.

Savvis also gained 50,000 square feet of existing space vacated by two "below-market" colocation customers. Koen said the customers dated to "a time when Cable & Wireless or Exodus was either in bankruptcy or in financial distress" and "just trying to fill the space up regardless of who the customer was or any type of strategy." He said that the basic colocation business offers a lower return than managed services.

Savvis has raised its colocation rates from $31 to $36 per square foot within the last month, and adding new services that "continue to take us beyond the commoditized colocation business." Revenue from Savvis' utility computing service is up 76 percent from a year ago and 21 percent from the third quarter.

Posted by Rich Miller February 06, 2008 | Permalink | Newsletter

January 16, 2008

Savvis Expands Utility Storage Offerings

Savvis, Inc. (SVVS) has expanded its utility storage services, adding a storage offering for less-frequently accessed data that will be more affordable than its current storage services. Utility Storage quality-of-service 4 (QoS 4) targets lower tier persistent data, which Savvis says is one of the fastest growing segments of the storage market. The company also announced NAS Connect (Network Attached Storage Connect) and Utility Backup NAS as options for customers who use NAS as well as storage area network (SAN) storage.

"Savvis’ expansion of its Utility Storage Services portfolio and the introduction of NAS Connect respond to increasing customer requests and growing market demand identified for flexible and scalable utility storage services," said James Whitemore, Chief Marketing Officer for Savvis.

Posted by Rich Miller January 16, 2008 | Permalink | Newsletter

December 07, 2007

Savvis Shares Fall on Analyst Concerns

Is Wall Street getting nervous about investment in new data centers? Shares of Savvis (SVVS) sold off sharply over the past two sessions after the company announced plans early Thursday to expand its data center footprint in London, Singapore and the New York area. The additional investment in new infrastructure led Savvis to lower its revenue guidance for both the fourth quarter of 2007 and full-year 2008.

Shares of Savvis closed Wednesday at $32, but fell to $28.12 by Thursday's close and dropped another $2.91 today to $25.32. That works out to a drop of 20.9 percent in just two sessions.

This morning Morgan Stanley analyst Simon Flannery lowered his rating and price targets for Savvis, citing concerns about demand for data center space in a slowing economy. "We are becoming more cautious on the company's prospects going into 2008, especially if we do indeed see a slowdown in enterprise spending," wrote Flannery, who said the company might face difficulty finding tenants for its new data centers if the industry slows.

Posted by Rich Miller December 07, 2007 | Permalink | Newsletter

December 06, 2007

Savvis Expands in London, Singapore, NYC

IT infrastructure provider Savvis Inc. (SVVS), which continues to expand its data center network, will add a new data center in London and expand facilities in Singapore and the New York market. The company said the additional space is needed to meet growing demand for hosting and network services. Savvis just opened new data centers in four major U.S. markets (New Jersey, Virginia, Santa Clara and Atlanta) and is prepping additional data centers in Boston and Chicago.

The London and Singapore facilities will offer Savvis Proximity Hosting to key financial exchanges colocated within the data centers. Initially, the expanded Singapore facility will offer direct connectivity and low latency network access to the Singapore Exchange. Proximity hosting provides exceptionally fast connections for financial firms conducting automated trading.

"SAVVIS has had great success with our managed hosting offering in the United Kingdom and the New York area, and has seen significant indications of growing demand for those services in the Asia/Pacific region," said Phil Koen, Chief Executive Officer of SAVVIS. "We are delighted to be able to build on our existing presence and strong sales and operations teams already in place in these three excellent markets for SAVVIS’ services."

Posted by Rich Miller December 06, 2007 | Permalink | Newsletter

October 17, 2007

Digital Realty Turn-Key Space Benefits Savvis

Were you wondering how Savvis Inc. (SVVS) could announce a new data center today and plan to have it open before the end of the year? With most new data center projects taking at least 18 months, that's an extraordinarily quick time to market.

Savvis is the latest beneficiary of the Turn-Key Data Center program offered by Digital Realty Trust (DLR), which announced late today that it has leased space to SAVVIS for its new data center facilities in Boston and Chicago. The Turn-Key program offers finished data center space to tenants, allowing them to move in and quickly bring a facility online. Digital Realty has built out more than 330,000 square feet of raised floor technical space in 10 cities. The program was announced in 2006 when Digital indicated that tenants were seeking finished raised-floor data center space rather than unfinished "shell" space.

The Boston facility leased by Savvis is a 66,000 square feet property with 40,000 square feet of Turn-Key space and partially built-out raised floor space. The Turn-Key lease for the new facility in Chicago totals approximately 20,000 square feet of raised floor.

Posted by Rich Miller October 17, 2007 | Permalink | Newsletter

Savvis To Add Centers in Boston, Chicago

Savvis, Inc. (SVVS) will open two new data centers in the Boston and Chicago metropolitan areas, citing strong customer demand for IT infrastructure services in those markets. The new Chicago data center will offer Savvis Proximity Hosting, which provides direct connectivity and low latency network access to major financial exchanges inside the data center.

"In response to strong customer demand, we are adding new data centers in Chicago and Boston where we have a strong customer base with sales & operations staff in place and well-positioned to capture that demand," said Phil Koen, Chief Executive Officer of Savvis. "Further, since these centers are in final stages of build out to Savvis’ high standards for reliability and redundancy, we will be able to make them available to customers in a very short time frame, offering our full portfolio of colocation, managed hosting, utility computing and network solutions."