SAVVIS serves up a wide array of network services. The company primarily provides hosting services, including data colocation and hosted software, for businesses from its 32 data centers. It also provides managed network services such as network security and utility computing, and it sells network bandwidth on a wholesale basis. SAVVIS markets directly to customers mainly in the Americas region, but it also has clients and operations in Europe and Asia. The company targets large and midsized businesses and federal government entities. Customers have included Procter & Gamble, Reuters, and Virgin Entertainment. SAVVIS was acquired in 2011 by CenturyLink, a leading US phone company, for $2.5 billion.
CenturyLink assumed $700 million of debt carried by SAVVIS as part of the transaction. The acquisition, which established CenturyLink as the country's third-largest telecommunications company, was part of CenturyLink's broader effort to expand and diversify its enterprise business while the market for consumer wired telecommunications suffers from the migration of callers wireless accounts. The deal followed CenturyLink's acquisition earlier that year of rival phone service provider Qwest Communications, which enabled the company to scale up its residential phone business and better compete against larger rivals like AT&T, while expanding its corporate business.
SAVVIS' revenues increased in 2010 due mainly to an rise in hosting revenue, but it still recorded a loss for the year. SAVVIS has achieved fiscal profitability only twice in the past decade. The company cited increasd operating costs associated with acquisitions and expenses related to infrastructure expansion as key factors contributing to its loss for 2010. SAVVIS attributed its loss the previous year to the ending of its hosting contract with NYSE Amex, a decline in network service revenue, and increased operating costs.
The company bought Toronto-based managed IT and colocation services provider Fusepoint for $121 million in 2010. The deal came in response to customer demand for increased access to SAVVIS services in Canada. It also served to bolster the company's growing colocation business, adding data centers in Montreal, Toronto, and Vancouver.
SAVVIS also expanded its Washington, D.C., Chicago, and London data centers in 2010 to increase its capacity to meet storage and bandwidth demands in those metropolitan areas. It did the same with its New Jersy data center the previous year. These investments followed the nearly $370 million that the company spent during 2007 and 2008 to establish ten data centers to raise its international profile.
SAVVIS is pursuing a strategy that includes targeting midsized businesses with a need to outsource the management of their IT infrastructure. In response to an industry trend toward so-called cloud computing, SAVVIS in 2009 began to introduce services intended to address the needs of customers looking for managed hosting options for their Web-based software and services. SAVVIS has also introduced niche services such as proximity hosting for the financial services market; locating servers closer to their data sources to reduce network latency for financial traders.
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