Utility services seen gaining steam

Savvis customers cite flexibility, cost savings as key attractions.

Savvis Communications, a Web hosting company that earlier this year purchased the assets of bankrupt carrier Cable & Wireless, is reporting significant customer interest in its new utility network services.

Savvis says it has attracted more than 50 customers for its virtualized server and storage services since the offerings became available in April. Meanwhile, Savvis has deployed its virtualized security and network services, including firewalls, load balancing and Web acceleration for 400 customers since last year.

Companies can purchase Savvis' virtualized services on a monthly basis, increasing or decreasing the amount of compute power or storage space they need depending on seasonal changes in their businesses. Industry analysts say Savvis has done a better job of turning its virtualized services into an off-the-shelf offering than competitors.

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Savvis Communications, a Web hosting company that earlier this year purchased the assets of bankrupt carrier Cable & Wireless, is reporting significant customer interest in its new utility network services.

Savvis says it has attracted more than 50 customers for its virtualized server and storage services since the offerings became available in April. Meanwhile, Savvis has deployed its virtualized security and network services, including firewalls, load balancing and Web acceleration for 400 customers since last year.

Companies can purchase Savvis' virtualized services on a monthly basis, increasing or decreasing the amount of compute power or storage space they need depending on seasonal changes in their businesses. Industry analysts say Savvis has done a better job of turning its virtualized services into an off-the-shelf offering than competitors.

"Everybody has something that they call utility computing or virtualization, but as far as I know this is the first productized, packaged service out there in the market," says Melanie Posey, an analyst with IDC. "Other service providers offer you that capability as well, but since Savvis has productized the offering it's more automated and it's not like doing a customized deal for each customer."

Most Savvis customers are in the financial services and media industries, says CEO Robert McCormick.

"Savvis delivers voice, data, computing and storage services in a pay-as-you-go model. We have a private global network in 47 countries, and we give our customers virtual slices of massive carrier-grade servers," McCormick says.

During the past six months, Savvis has deployed 308 virtual servers, 61.5T bytes of virtual storage and 658 virtual firewalls.

The virtualized offerings are selling "far better than we anticipated when we launched in April," McCormick says, adding that half the customers of this service are former C&W or Savvis customers and the other half are new. "They've completely sapped the energy away from our other hosting products."

Savvis has automated the delivery of various IP services such as servers, storage and load balancing that it provides on an outsourced basis. Savvis handles all the network management and maintenance, while customers pay for a certain level of performance to be delivered.

"This lets you launch a new application without the upfront capital needs," McCormick says. "Here you rent the stuff and get into your new business without a big investment in IT."

Savvis has built its virtualized services through partnerships with several hot technology vendors including: blade server supplier Egenera, network security vendor Inkra Networks, utility storage array maker 3PAR and network equipment supplier Nortel. These companies contribute the virtualization technologies that power the Savvis virtualized services delivery platform.

The Savvis offerings are proving to be an attractive alternative to traditional Web hosting or collocation services, which require customers to buy their own equipment and rent rack space. Savvis' network infrastructure is partitioned at the hardware level to ensure security, much as the way mainframes were operated years ago.