Financial Vertical Fuels Savvis Cloud Revenue Growth

Savvis Inc.'s growing cloud revenue is getting a boost from the financial services vertical. Company executives updated analysts during the company’s earnings call for its second quarter ended June 30. Here’s a summary of what they had to say on the managed services front and regarding the cloud market.

Key points to note included:

  • Savvis’ cloud business has hit an annual revenue run rate of $14 million. Q2 cloud revenue grew 24 percent on a quarter-over-quarter basis. Savvis’ cloud revenue for the whole of 2009 was $7.4 million.
  • Financial services firms are contributing to the uptick in cloud services, as the sector moves away from the mindset of having to own and manage IT infrastructure. Savvis cited a 2Q at a U.K.-based retail bank that involves both traditional hosting services and its Savvis Symphony cloud solutions. The bank deal generates about $345,000 in monthly recurring revenue.
  • In February, Savvis reported that its existing media industry customers were  showing interest in adopting cloud computing. That pattern continued in Q2: a media firm that had been doing managed hosting with Savvis expanded its relationship with the company to include colocation and cloud services. The three-year deal is worth $30 million.
Overall, Savvis executives emphasized the rebound of the financial services sector, which generated $60 million in Q2 revenue -- 27 percent of total revenue. The financial vertical “has returned to strength,” noted Jim Ousley, Savvis’ chairman and chief executive officer.

Bill Fathers, senior vice president and global head of sales and marketing at Savvis, cited a significant increase in bookings in the financial sector during Q2. Financial services represented more than 40 percent of the bookings in the quarter, according to the company.

Here’s a summary of Savvis’ Q2 results:
  • Revenue of $221.8 million compared with $219.9 million in last year’s Q2.
  • Net loss of $13.2 million compared with net loss of $6.2 million last year.
Managed services contributed nearly half of Savvis’ Q2 hosting revenue, growing 5 percent quarter over quarter and 10 percent year over year.  The company said the increase in revenue “reflects client interest in both standard managed services and cloud services.”

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