SAVVIS

SAVVIS, Inc.
Type	Public (NASDAQ: SVVS)
Founded	1995
Headquarters	Town and Country, MO, USA
Key people	Philip J. Koen, CEO Jeffrey H. Von Deylen, CFO Bryan S. Doerr, CTO James D. Whitemore, CMO
Industry	Information Technology
Products	IT Services including Hosting and Network Services
Revenue	$793.8 million USD (2007)
Operating income	$338 million USD (2007)
Net income	$250.6 million USD (2007)
Employees	2,233 (as of December 31, 2007)
Website	www.savvis.net

SAVVIS, Inc. (NASDAQ: SVVS; formerly SAVVIS Communications Corporation) provides technology infrastructure for enterprise applications. SAVVIS delivers "IT infrastructure as a service" by combining virtualization technology, a global network and 28 data centers (approx. 1.3 million square feet) in the United States, Europe, and Asia, automated management and provisioning systems, and a best practices operations model. SAVVIS has 4,200 business and government customers. ^[1][2]

History

The company was founded in 1995 under the name "Diamond Net" by Tim Roberts and Andrew Gladney. It changed its name to "SAVVIS Communications Corporation" in 1996. In 1999 SAVVIS was acquired by Bridge Information Systems, and subsequently listed on the NASDAQ stock exchange via an Initial public offering as SVVS in 2000. In May of 2005 the company announced a change in its name from "SAVVIS Communications Corporation" to "SAVVIS, Inc.". The company press release stated, "The change reflects the company’s expansion from a network services company to a global IT services company..."^[3]

Like many "dot-com boom" startups, SAVVIS suffered from highly questionable management practices (SAVVIS was infamous for its nepotism during this period: at one point, 4 of the most senior executives were direct, 1st degree relatives of the CEO), and posted significant operating losses for several years after its IPO: Savvis stock fell from its IPO price of $24.00 to $0.22 before management changes and a reverse split rescued the company. The main investor in SAVVIS, "Welsh Carson Anderson & Stowe" (a private investment bank) has been widely reported to have lost almost three quarters of a billion dollars in the first 3 years of SAVVIS' existence as a public company.

Despite its rocky start and checkered operating history, SAVVIS is a ".com bust" survivor that in 2006 was positioned in the "Magic Quadrant for Hosting" published by Gartner.^[4]

SAVVIS has grown both organically and through strategic acquisitions. In 2002 SAVVIS purchased the hosting operation and customers of Intel Online Services. In 2003 it purchased WAM!NET, a content management and media application service. In 2004 the company purchased the assets of Cable & Wireless America which included 15 data centers and the customers of Exodus Communications, the Tier-1 Internet backbone previously owned by MCI, the content delivery network (CDN) from Digital Island, and a significant professional services organization for $155 million in cash and assumed liabilities of approximately $12.5 million.

SAVVIS sold the CDN business it acquired in 2004 to Level 3 Communications in December of 2006, for $135 million.

Spam allegations

On 8 September, 2004, SAVVIS' Operations Security Manager, Alif Terranson, abruptly quit and went public with internal SAVVIS documents,^[5] releasing these documents to media outlets including the BBC^[6] the Register,^[7] and others.^[8]These documents disclosed that SAVVIS was soliciting the business of some of the worlds worst spammers and that SAVVIS was realizing "between $200,000 to $2,000,000 per month" from these customers alone.^[9] Additionally, SAVVIS was accused of engaging in some highly questionable "bulletproofing" practices for these spamming customers, for instance, swapping out new IPs for "soiled" ones. As a result of the negative media attention, SAVVIS was forced to resume using Spamhaus (a worldwide organization of spam fighters) to prevent and resolve customer spam issues. In a joint press release, Steve Linford, CEO and Founder of the Spamhaus Project was quoted, "Spamhaus has long recognized SAVVIS as a 'White Hat Network' with exemplary policies and procedures to control the proliferation of spam. We are pleased to work with SAVVIS to fight against spam and encourage others in the industry to adopt their leadership model."^[4] SAVVIS is still considered by many to be a haven for spammers, due to the fact that they refuse to accept "munged" reports. A "Munged" report deliberately obfuscates the origin of the person making the complaint, in order to prevent the practice of "listwashing" from being used against the complainant. SAVVIS requires any reports of spam sent to them to have the full email headers, including an unmunged address, intact in order to act on a complaint.^[10] This specific practice is what has lead a number of people in the antispam community to continue to class SAVVIS with the hard core spam supporting networks. Despite this issue, SAVVIS has successfully transitioned from the #1 most abusive network in North America (based on having over 200 open Spamhaus "cases" in 1994), to a network where actual spam issues are seldom seen and usually acted upon (notwithstanding the non-munging requirement).

CEO and AMEX lap dance charges

In October 2005, then CEO Robert McCormick and SAVVIS were listed as defendants in a claim brought by American Express. The case involved charges made on an American Express Card issued to McCormick that were reported to be $241,000 at a New York strip club, Scores. McCormick asserted that the charges were fraudulent, similar to two other lawsuits brought against Scores,^[11][12] while Scores claimed to have fingerprints of McCormick's to verify his charges were legitimate.^[13] In November 2005, after an investigation into the matter by the Audit Committee of the Board of Directors, SAVVIS accepted McCormick's resignation - amid extensive public ridicule by the media. McCormick was tagged as "The Lap Dunce" in The New York Daily News^[14] - a reference to the almost quarter of a million dollars he was alleged to have spent on lap dances at the nightclub. In March 2006, SAVVIS announced that the litigation brought by American Express against SAVVIS, McCormick and Scores had been resolved in a negotiated settlement.^[15]

The current CEO, Philip J. Koen, was named in March 2006. He was formerly president and COO of Equinix.

References

External links

• SAVVIS website
• One of thousands of savvis.info archival mirrors (not related to or endorsed by SAVVIS)