CenturyLink Buys Savvis

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| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

CenturyLink Buys Savvis

centurylink_logo.gifIt hasn't even finished swallowing Qwest and CenturyLink makes a deal to buy Savvis for $2.5B plus the assumption of $700M in debt. From the press release, "With the addition of Savvis, CenturyLink will achieve global scale as a managed hosting and colocation provider and will accelerate its ability to deliver quality managed hosting and cloud capabilities to its business customers. The combination of CenturyLink's hosting and network assets with Savvis' proven solutions in colocation, managed hosting and cloud services substantially enhances CenturyLink's capabilities and provides the company with a solid platform for future growth." So they want to be global?

"Together, CenturyLink and Savvis will operate 48 data centers located in North America, Europe, and Asia with more than 1.9 million square feet of gross floor space; a robust, national 207,000 route mile fiber network; a 190,000 mile global access network; and have a customer list that includes a majority of the Fortune 500 and Fortune 1000 companies."

Everyone is chasing cloud and global. It's interesting because while there are 1000 companies in the Fortune 1000, there are over 5 million other businesses who are looking for business services. It is almost like the telcos are all chasing the same Corporations and Federal dollars, and have given up on small business to cellcos and cablecos.

I don't know how this Cloud play works out long term. (I'm still working on a blog post about my cloud views.)  I look at the Cloud space and see the federal government consolidating its data centers. So too is HP. Meanwhile Google, Facebook, Microsoft and others are building their own data centers - and exiting others. It just seems to me like telco business moves from telco to reseller to reseller to telco - without really growing. Cloud, I fear, will become that as well.

How do you buy Savvis for over $3B total and pay it back with $10-14M in income? Or worse, since Savvis runs in the red.

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