Savvis Taking Over Data Centers

Byline: Yuki Noguchi

Savvis Communications Corp. of Herndon announced today that it will take over the operations of four data centers managed by Intel Online Services Inc., and expects to win as many as 200 new customers from IOS, which plans to exit leave the Web-hosting business next year.

Savvis will start signing IOS customers to its service immediately. On May 1, it will take over the leases and management of the four data centers in, which are in Chantilly; Santa Clara, Calif.; London; and Tokyo. Savvis, which sells Web-hosting services and network services around the world, employs about 700 people now, and may hire as many as 100 more employees from IOS. As part of the deal, Savvis will pay IOS for hardware and software associated with each customer who transitions switches to Savvis's network.

The deal "represents a pretty big opportunity for us," said Savvis chairman and chief executive Robert A. McCormick, who declined to comment on IOS's revenue potential.

Savvis, which is still trying to recover from the bankruptcy and liquidation last year of its former parent, Bridge Information Systems Inc., has been trying to diversify its customer base and increase its sales volume, he said. Bridge had owned 48 percent of Savvis and was its largest customer.

"This is exactly the kind of thing Savvis should be doing," he said.

For IOS, exiting the business will allow the computing giant to focus on its core business, said Melanie Posey, an analyst with market-research firm IDC in New York.

"It's part of the whole movement of companies sticking to markets where they are dominant; they weren't a dominant player in the [hosting] market."

"Savvis offers a smooth transition alternative for IOS customers, offering service level agreements at the same price and using the same equipment in the same data centers as IOS," IOS president Dalibor Vrsalovic said in a statement.

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