Utility computing drives Savvis sales

* What Savvis is doing for Wall Street Systems

Savvis is making progress on several fronts, winning new software-as-a-service, utility and hosting customers. To meet the demand, Savvis is opening four new data centers this year.

One new Savvis customer is Wall Street Systems, a provider of trading services that is developing its first hosted service. Savvis is providing two data centers, servers, storage network, management and operations to support the new ASP version of Wallstreet FX.

Additionally, Savvis is providing a secure corporate network for Wall Street Systems to connect its offices in eight countries. The network will support e-mail, video conferencing, data transfers and other intranet services.

Savvis said the Wall Street Systems deal was a competitive bid. Wall Street Systems was not a customer of Savvis until this SaaS deal.

"We have these firms deploying SaaS. We can deploy everything they need and get them speed to market at a lower cost," says Varghese Thomas, vice president of Savvis’ financial markets division. "We can handle all of their compliance and security issues…We call it audit-ready by design."

Savvis says the Wall Street Systems deal is significant because it will involve processing a high volume of transactions. Wall Street Systems has 5,300 users processing more than 200,000 transactions per day with its standard software offering.

Savvis won the Wall Street Systems ASP deal in March, and the application went live in May.

Savvis is targeting customers like Wall Street Systems that are developing hosted applications.

Choosing Savvis’ utility offering is "a good way to scale an application," Thomas says. "That’s one of the flexibilities of our utility product…We’re seeing a lot of interest in this."

To service customers like these as well as its traditional Web hosting customers, Savvis is opening data centers this year near Washington D.C., San Francisco, Atlanta and New York City. This will bring Savvis’ total number of data centers to 28.

"We believe that the premium data center market…will continue to be strong," says Savvis President Jonathan Crane. "When we think about these data centers, we think about nodes on the network."

Savvis is investing $50 million to upgrade to an MPLS network, which will be completed in the first quarter of 2008. This Cisco-based network will connect Savvis’ data centers, which include servers, storage, security and other capabilities that can be purchased on a utility basis.

"The new data centers are like common data centers. It’s what we’re doing across all of our data centers that’s new," says Bryan Doerr, CTO of Savvis. "We’re connecting all of them with very high capacity metro Ethernet and with WAN routers sitting at the edge so we can build customer networks directly down to their servers with QoS across the entire path….Customers will no longer feel like this shared economic model is costing them control."

Savvis says much of the growth in its data centers is coming from managed and utility services. Utility computing is the fastest growing segment of the company’s business and represents 24% of its managed hosting revenue – a total of $12.1 million -- as of the first quarter of 2007, the company said.

"We do sell collocation to customers, but increasingly we’re looking to be more of a managed services company," Crane says. "We have our nodes on our network, that’s really a source of intelligence on the network, and then we have the connectivity that connects them."

Crane says a big part of Savvis’ growth in utility computing comes from SaaS customers like Wall Street Systems. SaaS customers represent "30% to 40% of our utility customers, and it is growing," Crane says.

"We think the SaaS folks stand to benefit the most [from our new network] because of their focus on the application and virtualization of the application," Doerr says

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Copyright © 2007 IDG Communications, Inc.

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