Light Reading

CenturyLink Clouds Up With Savvis Buy

Jeff Baumgartner
News Analysis
Jeff Baumgartner
4/27/2011
50%
50%

CenturyLink Inc. (NYSE: CTL) is the latest service provider to use M&A to shore up and accelerate its cloud networking strategy after putting up $2.5 billion for Savvis (Nasdaq: SVVS). But some analysts are already wondering if it will be enough to seal the deal.

CenturyLink said Wednesday it will acquire Savvis for $40 per share, or $2.5 billion, plus net debt of $700 million. Savvis shareholders are to receive $30 per share in cash and $10 per share of CenturyLink stock.

Although the deal represents an 11 percent premium over Savvis's closing price of $36.02 on April 26, there's speculation that CenturyLink may have to sweeten its offer.

"We would not be surprised if Savvis were to potentially receive a higher bid from another party, as traditional communication providers are looking for new avenues for revenue growth and are showing high interest in entering the managed hosting and cloud computing market," Mizuho Securities USA Inc. Analyst Michael Nelson said in a note issued this morning.

Of recent note, that kind of interest has led Time Warner Cable Inc. (NYSE: TWC) to buy NaviSite (Nasdaq: NAVI), and Verizon Communications Inc. (NYSE: VZ) to snap up Terremark.

Why this matters
Service providers and carriers are clearly racing to boost their cloud strategies and are looking to fill the gap with acquisitions rather than bridging it with something built from scratch. The deal should allow CenturyLink, which just wrapped up its Qwest Communications International Inc. (NYSE: Q) acquisition, to penetrate the cloud-computing and hosted-services market more deeply and rapidly than it could on its own.

As scale goes, a combined CenturyLink and Savvis will operate 48 data centers located in North America, Europe and Asia, a national 207,000 route-mile fiber network and a 190,000 mile global access network.

CenturyLink intends to integrate its hosting business with Savvis's and base the business unit in St. Louis, where it will be headed by Savvis CEO James Ousley.

For more
For more on the recent cloud computing M&A frenzy, check out:



— Jeff Baumgartner, Site Editor, Light Reading Cable

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
12/5/2012 | 5:06:38 PM
re: CenturyLink Clouds Up With Savvis Buy


Savvis is one of the early SaaS companies and has an established presence in cloud computing, so it makes sense that CenturyLink would target them. I'm wondering who the other bidders might be - AT&T, BT and Orange all have developed cloud services, but then so had Verizon before it bought Teremark.


For a peek at what Savvis has been doing, here's a link to a blog by Larry Steele, VP of SaaS at Savvis and a long-time cloud services proponent: http://blog.savvis.net/SaaS/.

Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
12/5/2012 | 5:06:34 PM
re: CenturyLink Clouds Up With Savvis Buy


The few sources I've spoken to on this don't think it's a sudden move by any means. The Level3/Global Crossing deal may have made this one more urgent but chances are CenturyLink has been working on thsi for a while but wanted to get the Qwest deal completed before moving.

scottdTBR
50%
50%
scottdTBR,
User Rank: Light Beer
12/5/2012 | 5:06:34 PM
re: CenturyLink Clouds Up With Savvis Buy


I wouldn't be surprised if Orange was involved in the bidding. This would go a long way towards their goal of 500M Euro in cloud revenue by 2015.


Any sense if this has been in the works for a while, or if the Level 3/Global Crossing deal had any impact on the decision?

From The Founder
Light Reading sits down at CES with the head of Cisco's service provider video business, Conrad Clemson, to discuss how NFV and cloud security relate to video, the challenge of managing 4K/8K traffic, the global expansion of Netflix and virtual reality.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Custom TV
Join Us at the Digital Operations Transformation Summit

2|4|16   |   03:52   |   (0) comments


The Digital Operations Transformation Summit on February 21, 2016 at the Crowne Plaza Barcelona Fira Centre will bring together 50 senior executives to engage in a unique debate on the opportunities and challenges presented by the transformative evolving digital landscape. RSVP now at events@lightreading.com.
LRTV Custom TV
Making the Test: ADVA Ensemble Connector vs. Open vSwitch

2|4|16   |   01:28   |   (0) comments


Light Reading, in partnership with EANTC, recently tested ADVA's Ensemble Connector, which replaces open vSwitch and offers carrier-grade capability and interoperability. The test results strengthen ADVA's credibility as a provider in the virtualization space.
LRTV Custom TV
Bridging the Gap Between PoCs & Deployment in NFV

2|4|16   |   31:50   |   (0) comments


Charlie Ashton of Wind River presents the keynote at Light Reading's 2020 Vision executive summit in Dublin.
Between the CEOs
CEO Chat With Mike Aquino

2|3|16   |   17:34   |   (0) comments


The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Shades of Ray
MWC: Buckle Up for 5G & the IIoT

2|2|16   |   02:28   |   (0) comments


This year's Mobile World Congress looks set to be a 5G land grab and a chance to get down and dirty with the Industrial Internet of Things (IIoT) – but what will the 5G discussions actually be about?
LRTV Custom TV
Case Study: Building China's Next-Gen TV Networks

2|2|16   |   5:01   |   (0) comments


With over 2 billion viewers worldwide, Shenzhen Media Group is one of China's largest content producers. By partnering with Huawei and Sobey, SZMG was able to modernize media operations with the Converged News Center, a production studio that is a model for next-generation workflows.
LRTV Custom TV
Quad Channel Modulator Driver with 46 Gbaud Capability from MACOM

1|28|16   |     |   (0) comments


MACOM's MAOM-003427 is the industry's first surface-mount modulator driver with 46 Gbaud capability to support next generation 200G and 400G applications.
LRTV Custom TV
Video Infographic: Validating Cisco's NFV Infrastructure

1|26|16   |   02:24   |   (1) comment


We all know that the network of the future will be virtual, but when will virtual become a reality? This video infographic covers the four key areas in which Light Reading, in partnership with EANTC, tested Cisco's NFV infrastructure: performance, reliability, multi-service capabilities and single pane of glass management.

For the full report, see

Between the CEOs
CEO Chat With Phil McKinney, CableLabs

1|22|16   |   13:36   |   (1) comment


At CES in Las Vegas, we met with Phil McKinney, CEO of CableLabs. Phil provides an update on the rollout of DOCSIS 3.1, his views on the future of open source and how consumer interest in virtual reality could affect network traffic.
Between the CEOs
Ericsson CTO on the Changing Telecom Market

1|21|16   |   10:26   |   (0) comments


At CES 2015, CTO of Ericsson, Ulf Ewaldsson, sits down with CEO of Light Reading, Steve Saunders, to discuss the changing telecom market, the new partnership with Cisco and the future of the telecom industry.
LRTV Interviews
Ireland's Data Dream

1|21|16   |   14:31   |   (0) comments


Host In Ireland president Gary Connolly tells Light Reading's Steve Saunders about the role Ireland is playing in hosting data for the world's largest organizations.
LRTV Custom TV
Brocade Keynote: Transitioning to the New IP

1|20|16   |   27:23   |   (0) comments


At 2020 Vision in Dublin, Andrew Coward, VP of Service Provider Strategy at Brocade, presents the transition to the New IP.
Infographics
Cisco's latest VNI numbers suggest the world will be using 366.8 exabytes of data on smartphones and Internet of Things devices, up from 44.2 exabytes, in 2015.
Hot Topics
Alphabet Is Serious About Google Fiber
Mari Silbey, Senior Editor, Cable/Video, 2/1/2016
Did Juniper Pay 'Peanuts' for BTI?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 2/2/2016
Google's 5G Radio Ambitions Are Expanding
Dan Jones, Mobile Editor, 2/5/2016
How Data Center Outsourcing Fuels AT&T NetBond Growth
Carol Wilson, Editor-at-large, 2/3/2016
3.5GHz Startup Gets $22M for Small Cells
Dan Jones, Mobile Editor, 2/2/2016
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
As anyone who knows me will tell you, I like to think I know a fair bit about this next-gen-comms malarkey, but there's nothing like an interview with one of the ...
Animals with Phones
Happy Groundhogs for Technology Day! Click Here
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and G.fast for copper plant evolution and the various deployment possibilities for FTTH/B.