Savvis Plans to Forge Strategic Partnerships with China!

 
11/25/2013

Jeff Von Deylen says Savvis has customers already signed up and ready to turn on their operations at its new data centre in Tseung Kwan O in January. Photo: Nora Tam
Savvis, an international provider of managed information-technology infrastructure services, plans to forge strategic partnerships on the mainland early next year to tap into the growing demand for data centres in the world’s second-largest economy.
That expansion would follow the launch of the US company’s second data centre in Hong Kong under a joint venture with San Francisco-based Digital Realty Trust, the world’s largest builder and wholesale provider of such facilities.

The Savvis-Digital Realty venture bought an old industrial site in Tseung Kwan O last year to redevelop it into an 18,000-square metre data centre at a cost of about US$200 million, the first phase of which is scheduled to open today (Tuesday).

“We have customers already signed up and ready to turn on their operations at the site in January,” Savvis president Jeffrey Von Deylen said in an interview on Monday.

A data centre is a secure, temperature-controlled facility built to house large-capacity server computers and data-storage systems, with multiple power sources and high-bandwidth links to the internet.
Savvis, a subsidiary of CenturyLink, the third-largest telecommunications services provider in the United States, operates 55 data centres around the world, including six in the Asia-Pacific. The region accounted for less than 10 per cent of Savvis’ overall business last year.

“It’s really important for us to figure out who we’re going to be partners with in [mainland] China,” said Von Deylen, pointing out that Savvis has virtually no business in that market.

For our customers to be successful in China, we need to operate in the country
Jeffrey Von Deylen, Savvis
“For our customers to be successful in China, we need to operate in the country.”

Von Deylen is visiting the mainland later this week to continue discussions with potential partners and hopes to clear the way for the signing of formal agreements in the first half of next year.

“It can be more than one [partnership], but we’re not going to do 10,” he said.

A report by British firm BroadGroup Consulting in February said the expansion of data centre capacity on the mainland would accelerate over the next few years, largely owing to domestic demand.

It estimated overall investments in new data centre projects across at least 15 mainland provinces would reach US$370 billion by 2016.

Savvis, which is targeting total revenue of about US$1.5 billion next year, expects to initially set up operations in Beijing and Shanghai.

Gery Messer, the newly appointed managing director for Asia-Pacific at Savvis, said: “Shanghai is particularly important, because many of our clients are financial services providers.”

Competitors in the Asia-Pacific, including NTT Communications, Pacnet, Equinix and Fujitsu are already ahead of Savvis in establishing data centre operations on the mainland.

Consulting firm Frost & Sullivan has forecast the Asia-Pacific data centre services market will reach US$9 billion by 2017, from US$2.5 billion in 2010. The mainland would account for US$3.2 billion in 2017, it said.