LONDON, September 16, 2004 — In a first for the European market, SAVVIS Communications (NASDAQ: SVVS), a leading global IT utility, today announced availability of their virtualized IT services delivery platform in the United Kingdom. Employing a utility model, in which companies only pay for the services they use, the new 100 percent outsourced technology platform allows UK businesses to eliminate hardware and associated IT infrastructure. This cuts their annual IT expenses by as much as 50 percent.
The new SAVVIS platform integrates the virtualization technologies and deploys an array of managed utility services from its world-class data centre in Reading. Services include: managed hosting and network services for a variety of vertical markets such as financial services, media services (printing and publishing) and retail; application utilities, such as managed voice over IP; and managed MS Exchange services.
"Virtualizing storage, computing and hosting infrastructure makes sense for a lot of companies,” said James Eibisch, Research Director, EMEA IP and Hosting Services, IDC. “The potential to reduce in-house resource costs is one attraction, but switching from a capital to operating expenditure model can be a major financial benefit. Service providers that have the necessary technical and process skills can offer compelling services to organizations looking to make the most of the IT infrastructure they buy."
Leveraging more than 10 years of custom development and a heritage of exceptional network performance, SAVVIS’ virtualized platform runs on advanced, automated software management and provisioning systems. This provides customers with a simple, yet comprehensive end-to-end view of their IT infrastructure. This visibility across network, hosting, compute and storage platforms creates efficiencies enabling SAVVIS to be much more responsive to customers’ needs and to reduce customer dependence on redundant hardware.
SAVVIS’ virtualized platform enables customers to dynamically allocate the resources of massive, carrier-grade super servers, utility storage, and firewalls. Load balancers and resources can be automatically and regularly optimized for each client. This allows customers to pay for only what they use. Additionally, these on-demand services require no up-front capital expense and can provide tailored service levels to match the unique needs of each application. As a result, the platform increases a company’s flexibility and agility. It makes it possible to add new applications, increase server and storage, and expand the network in less time than conventional alternatives.
SAVVIS’ virtualized utility services are made possible in part through technology partnerships with Egenera, Inkra Networks, 3PAR, and Nortel Networks who contribute key virtualization technologies that power the end-to-end platform. See background attached for additional information.
“SAVVIS’ virtualized services delivery platform is now available on a global scale. It has already proven itself to provide superior network and infrastructure performance that reduces internal IT costs by as much as 50 percent,” said Richard Warley, managing director, SAVVIS EMEA. “We remain dedicated to helping companies make better use of their internal IT resources and focus on building applications that grow the business, not maintaining IT infrastructure.”
In the US market, where SAVVIS unveiled their virtualized IT services delivery platform earlier in 2004, premiere companies such as Deluxe Entertainment and Innovest Systems have already deployed the platform.
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 managed IP network and hosting services. For more information about SAVVIS, visit: www.savvis.net. 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.
SAVVIS Virtualized Services Delivery Platform - Additional Information
SAVVIS in a Nutshell Despite a difficult economic environment, SAVVIS has demonstrated a remarkable ability to drive its business forward and attract new investment during one of the most turbulent periods in the industry. It has survived the telecom storm in the US and, in fact, has grown significantly, both organically and through acquisition, during an era of consolidation. The company believes this primarily attributable to its virtualized approach to managed services, which is an inherently more profitable model and one that is increasingly being embraced by customers and prospects.
Last year, SAVVIS acquired the commercial business of WAM!NET Inc., a global provider of content management and delivery services with a significant UK customer base. The addition of WAM!NET provided a significant set of enterprise clients (many in the UK) in key vertical markets, such as print and publishing, retail and consumer goods, and has strengthened SAVVIS’ presence in the media and entertainment sector.
Earlier this year, SAVVIS acquired the assets of Cable & Wireless America (CWA) which included CWAs robust customer base – 2,000 additional enterprise customers, 1,000 additional hosting customers, 15 world-class data centers, and expanded global infrastructure needed to effectively challenge the current model of providing managed services.
SAVVIS is now one of the world’s largest managed IP infrastructure providers and is focused on delivering a wide range of network, hosting, and application services to enterprises looking for high-performance and affordable IT infrastructure. SAVVIS was recently named the number two hosting services provider by IDC (behind IBM) and the number two provider of IP VPNs by In-Stat/MDR (behind AT&T).
US Market Trends
In the United States, IDC forecasts that the market for utility-based virtualized services is growing rapidly and will increase from $800 million to $3.6 billion in 2007. One reason for this growth is that virtualized services deliver a rapid payback on new investments, while protecting previous ones. Virtualized services complement and enhance existing hardware and network infrastructure without forcing companies to make additional capital expenditures.
Excipio Consulting, a specialist in detailed ROI analysis, cites a business case analysis for a global client running nearly 150 database, Web, and application servers on SAVVIS’ virtualized platform. It found a $479,000 per year annual operating cost savings that climbed to $579,000 over three years. Much of the savings resulted from the extra redundancy and disaster recovery capabilities that come from moving an in-house-managed data center to a provider network where costs are cross-subsidized but resources are easily redistributed.
"Utility computing is the next biggest thing that will happen across the communications industry, the IT industry, and the consumer electronics industry," says David Tapper, an analyst with research firm IDC. "This may be the biggest disruptive technology in a century. This is real, and everybody better figure out how they are going to play in it, because there will be winners and losers."
About The Technology Partners
Each of SAVVIS’ key technology partners in the virtualized services delivery platform – Egenera, Inkra Networks, 3PAR, and Nortel Networks (1) – lead the industry in the core services they provide.
Egenera is the primary technology behind SAVVIS’ virtualized server and compute architectures. The Egenera® BladeFrame® system virtualizes data center infrastructure by creating a pool of server resources that are easily divided into private, secured configurations. These resource configurations can be dynamically allocated to support an application and then disbanded if necessary. Server capacity is then freed from dedication to individual applications, and services can move fluidly between different hardware or network paths. This means SAVVIS clients can pay only for the resources they use. In addition, they gain access to advanced features such as high availability, disaster recovery and real-time scalability without the expense of inflexible and over-provisioned legacy systems.
Inkra Networks’ Virtual Service Switch centralizes network, security, and performance services onto a single platform that simplifies the management and improves the operation of the network. By consolidating and virtualizing multiple functions including firewall, intrusion detection, SSL acceleration, and load balancing, the Inkra Virtual Service Switch enables SAVVIS to deploy and adapt network and security services in real time for its customers. This further boosts cost-effectiveness and efficiency of the SAVVIS platform by allowing SAVVIS to become more responsive to its customers’ needs.
3PAR InServ® Storage Server’s utility storage architecture allows customers on the SAVVIS platform to experience the benefits of simple, efficient, and scalable storage. 3PAR Utility Storage reduces the cost of storage, adds agility to the storage environment, and provides easy information sharing. SAVVIS customers have access to storage capacity as their application data is written, which saves them money and eliminates the costly upfront over-provisioning and poor capacity utilization typical of traditional storage solutions.
Nortel Networks Shasta (1) 5000 BSN provides the wide area network infrastructure for SAVVIS’ new end-to-end virtualized services delivery platform. Shasta was initially deployed in SAVVIS’ network in 2000, and has been instrumental in cementing SAVVIS reputation for providing highly efficient and reliable network-based IP VPN services to its enterprise customers.
Egenera and BladeFrame are trademarks or registered trademarks of Egenera Inc. in the United States and/or other countries.
© 2003-2004 3PARdata, Inc. All rights reserved. 3PARdata, the 3PAR logo, 3PAR, Serving Information, InServ, InForm, and InSpire are all trademarks or registered trademarks of 3PARdata, Inc.
(1) Nortel Networks and Shasta are trademarks of Nortel Networks.