Savvis expanded its geographic footprint earlier this year with the acquisition of Fusepoint Managed Services in Canada. Savvis CEO Jim Ousley said the company’s international push will continue. The company, however, will pursue partnerships rather than purchases. Here's how.
Ousley, speaking Wednesday at a Bank of America Merrill Lynch conference, said the company hopes to ink an international partnership in India by year’s end. He said the partnering thrust will continue next year, with Australia, Brazil, and China on the list.
Savvis has already gone the partnering route to extend its geographic reach. For example, Savvis is collaborating with Thomson Reuters to launch data centers in Frankfurt, Tokyo and Singapore among other cities.
Ousley said the partnering route will minimize the amount of capital needed to expand globally.
Savvvis paid a healthy premium when it bought Fusepoint and Ousely acknowledged that “prices out there are a bit frothy these days.” In the case of Fusepoint, however, he said Savvis “saw a lot of synergies” and the opportunity to establish a presence in Toronto, Canada’s financial hub.
Here are a few other takeaways from Ousley’s presentation:
- Financial services growth -- Ousley said financial services is Savvis’ fastest growing sector and accounts for 27 percent of the company’s revenue. He said customers in that sector are looking for new growth opportunities, but may lack the IT capacity to seize upon them. Consolidation stemming from the financial crisis set the stage for this situation.
- Another factor behind financial services demand: an increased willingness to outsource. Ousley said companies are actively pursuing the “outsourcing of the family jewels” -- private wealth platforms, for example. He added that such items weren’t previously under consideration for outsourcing. “That is demand that wasn’t there two or three years ago,” he said.
- Data center build out -- When asked about the industry’s ongoing investment in data center capacity -- and when that might become concerning in term of excess capacity -- Ousley said he believes the demand is still out there. He noted that less than 20 percent of worldwide IT spend is outsourced today. A ten point uptick would be more than the industry could absorb in a short amount of time, he said.
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