C&W Acquisition Pays Off For Savvis In Web Hosting And VPN Services Sectors

In the wake of its Cable & Wireless acquisition earlier this year, IT utility provider Savvis Communications has been able to carve out a number two position in rapidly growing market sectors: Web Hosting and VPN services.

According to a recent 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 projects that the hosting market will grow from $6.1 billion in 2004 to more than $10.4 billion in 2008.

Separately, analysts at In-Stat/MDR, report that Savvis has moved out of a second place tie with MCI, and now owns the number two slot all by itself -- behind AT&T. This second place ranking reflects IP VPN services revenue overall (including network and CPE-based installations). Instat/MDR places the firm as the number one provider of network-based IP VPNs.

Analysts forecast 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.

Savvis officials say they currently have over 7,000 enterprise customers and have booked $700 million in revenue for 2004.