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Why CenturyLink’s Savvis Deal is No Big Deal

May 4, 2011 No Comments

I’ve received a lot of questions around the recent announcement that Savvis has agreed to be acquired by CenturyLink for $2.5 billion. Although this seems like a cloud computing superdeal on the surface, the cloud computing angle is really very thin.

Many managed hosting services providers have seen the cloud computing light, which means that they can get a much higher valuation if they spin their way into the cloud. Recently, Savvis has been moving in this direction, along with other managed hosting services players, and — cha-ching! — a multi-billion-dollar offer. You can’t blame them, really.

However, those who consider this to be a cloud computing deal are naive as to the real value of cloud computing technology and the companies that provide it. While I would consider the ability to host data and processes to be paramount, the core value is around the innovation. Otherwise, everyone who manages a data center or any item in a data center for a customer would now be managing a cloud. They’re not.

The reality is that in the public cloud computing space (specifically IaaS), there is one major provider, Amazon.com, followed by Rackspace. These companies are ahead of the rest, not because they have the most processes occurring within their servers but because they have the most innovative way of providing IaaS services. Providers in the managed services space, such as Savvis, are not even close.

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