ST. LOUIS, MO, July 27, 2004 – SAVVIS Communications (NASDAQ: SVVS), a leading Global IT utility, today announced that it has been ranked as the second largest provider of Web hosting services and the second largest provider of IP VPN services overall based on data from International Data Corporation (IDC) and In-Stat/MDR (a unit of Reed Business Information). The rankings are based on combined revenue figures for SAVVIS and Cable & Wireless America (CWA) whose assets SAVVIS acquired earlier this year.
Based on a new market research report from IDC, SAVVIS ranked second among the top 10 U.S. hosting service providers at the end of 2003, behind market share leader IBM Global Services. IDC regularly estimates total hosting market revenues and ranks companies in terms of market share in the growing web hosting industry. IDC projects that the hosting market will grow from $6.1 billion in 2004 to more than $10.4 billion in 2008.
"With the acquisition of Cable & Wireless America's assets, SAVVIS now holds the number-two spot in the U.S. hosting market behind IBM," said Melanie Posey, Program Manager at IDC. "Already one of the top managed IP network infrastructure providers, IDC expects SAVVIS to extend its leading position with its new emphasis on end-to-end virtualized service delivery, combined with its heritage of superior IP infrastructure performance."
According to In-Stat/MDR, SAVVIS has moved out of a second place tie (with MCI) among U.S. providers of IP VPN services and into second place by itself.
“SAVVIS now holds the number two market share position among providers of IP VPN services in the US and has catapulted itself into the number two spot among hosting services providers,” said Henry Goldberg, Senior Analyst for networking, with In-Stat/MDR. “This is a powerful combination since many companies look to obtain IP VPN and hosting services from the same service provider,” Goldberg added.
This second place ranking reflects IP VPN services revenue overall (including network and CPE-based installations). An In-Stat/MDR report also confirmed that SAVVIS is the number one provider of network-based IP VPNs.
In-Stat/MDR expects network-based revenues to grow more rapidly than CPE-based revenues, because network-based VPN services will take a growing share of the overall market. In-Stat/MDR forecasts that network-based VPN services revenues will grow at a CAGR of 32% from 2004 –2008, while CPE-based VPN services revenues will grow at CAGR of 12%. Network-based revenues are about 35% of overall 2003 revenues, and In-Stat/MDR estimates that this share will grow to 55% by 2008.
“With over 7,000 enterprise customers and $700 million in 2004 pro forma revenue, SAVVIS has earned its spot as a global market share leader in hosting and IP VPNs,” said Rob McCormick, Chairman and Chief Executive Officer of SAVVIS. “Our customers bet their business on SAVVIS IT services because we can increase the reliability of their IT infrastructure, significantly reduce their IT costs, and enable companies to become more agile in executing their business strategy.”
IDC is the world’s leading provider of technology intelligence, industry analysis, market data, and strategic and tactical guidance to builders, providers, and users of information technology.
In-Stat/MDR offers a broad range of information resources and analytical assets to technology vendors, service providers, technology professionals, and market specialists worldwide. The company stands alone in its ability to integrate both supply-side and demand-side research methodologies into a single comprehensive view of technology markets and products. This capability relies on a unique ability to cover the entire value chain from engineering-level technology, through equipment, infrastructure, services and end-users. In-Stat/MDR is a part Reed Business Information, a leading provider of critical information and marketing solutions to business professionals and a member of Reed Elsevier.
SAVVIS Communications (NASDAQ: SVVS) is a global IT Utility that leads the industry in delivering secure, reliable, and scalable hosting, network, and application services. SAVVIS’ strategic approach combines the use of virtualization technology, a utility services model, and automated software management and provisioning systems. This allows customers to focus on their core business while SAVVIS ensures the quality of their IT infrastructure. With its recent acquisition of the assets of Cable & Wireless America, SAVVIS becomes one of the world’s largest providers of IP computing services and the world’s third largest provider of hosting services. For more information about SAVVIS, visit: . For more information about end-to-end media services from SAVVIS’ WAM!NET division, visit: www.wamnet.com.
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from SAVVIS’ expectations. Certain factors that could affect actual results are set forth as risk factors in SAVVIS’ SEC reports and filings, including its annual report on Form 10-K for the year ended December 31, 2003, as filed with the Securities and Exchange Commission on February 24, 2004, and all subsequent filings. SAVVIS assumes no obligation to update or supplement forward-looking statements.
Carter B. Cromley
Ricochet Public Relations