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October 22, 2001 — (WEB HOST INDUSTRY REVIEW) — Savvis Communications Corp. (savvis.net), a global network
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services provider, announced that it has secured a $200 million, five-year
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agreement with MoneyLine Network, Inc. (moneyline.com) for networking
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services.
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Savvis also announced that it now projects that it will achieve breakeven
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this quarter, sooner than its previous projection of the fourth quarter of
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2002. Savvis will manage MoneyLine’s entire network, providing networking
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services to the 6,000 client connections that MoneyLine has acquired from
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Bridge Information Systems, including its Telerate business, and its
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European and Asian businesses.
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“In spite of a difficult environment for telecommunications sales, Savvis is
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pleased to have now secured more than $500 million dollars in minimum
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committed revenue for the next five years through its contracts with Reuters
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and MoneyLine,” said Rob McCormick, chairman and CEO of Savvis. “Exclusive
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of these two significant contracts, Savvis’ revenue grew 10% from Q1 to Q2,
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far exceeding the sector growth rate of 2%. Savvis has succeeded in creating
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a solid foundation for the future, based on both top and bottom line
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performance.”
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In August, MoneyLine had entered into an agreement for Savvis to provide a
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minimum $122 million in services, and had announced its intent to begin
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migrating off the Savvis network in the second year of the five-year
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contract. The previous agreement also called for MoneyLine to purchase
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Savvis’ switches and customer premises infrastructure. The new $200 million
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agreement calls for MoneyLine to buy services according to the following
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minimums: $70 million in year one, $50 million in year two, $35 million in
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year three, $25 million in year four, and $20 million in year five. The new
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agreement no longer includes the hardware purchase, since Savvis will manage
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all network equipment and services over the full five-year term.
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In addition to managing a satellite network that MoneyLine also uses, Savvis
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will also manage, and eventually migrate, an additional 1,000 legacy
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circuits for MoneyLine.
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“MoneyLine’s decision to broaden its contract with us is a validation of our
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business strategy and recognition of the global reach of our network into
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the financial community,” said Jack Finlayson, president and chief operating
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officer for Savvis. “Savvis appreciates the confidence that MoneyLine has
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placed in us and looks forward to being their networking partner.”
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Commenting on the financial impact, David Frear, chief financial officer of
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Savvis, said, “In the past three quarters, Savvis has dramatically improved
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its EBITDA performance from an EBITDA loss of$24M in Q2 to a projection of
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breakeven in Q4.”
About theWHIR.com
Since 2000, The Web Host Industry Review has made a name for itself as the foremost authority of the Web hosting industry providing reliable, insightful and comprehensive news, interviews and resources to the hosting community. TheWHIR is an iNET Interactive property. For more information on iNET Interactive, visit http://www.inetinteractive.com
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