VP Managed Hosting

SaaS – From Concept to Profitability through IT Infrastructure as a Service

Phill Lawson-ShanksPhill Lawson-ShanksVice President Vice President

Hosting and Utility ComputeHosting and Utility Compute

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Agenda

• SaaS Infrastructure – The Cost Transference Dilemma

• SaaS Infrastructure – The Self-Management Quagmire

• Introducing SAVVIS

• SAVVIS and OpSource – Partners in your SaaS Deployment

• Infrastructure as a Service: Utility Computing - The Perfect Compliment to SaaS

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Introducing SAVVIS

• End-to-end IT infrastructure as a service model leads the sector– colocation/managed colocation – traditional managed hosting– on-demand computing, data storage, and security (pay-as-you-grow)– traditional managed security– managed applications – managed data networks– professional services– industry solutions (core focus on Financial Services)

• Global service provider with extensive infrastructure in place– 24 data centers worldwide (1.4 million sq ft); 4 in development for late 2007 opening– tier 1, private IP-VPN platform in 45 countries / 21,000 managed end points– tier 1 U.S. Internet backbone (roughly 25% of all routes) – “follow the sun” operations centers - U.S., Europe and Asia– 2,200 employees – majority focused on service delivery

• Strong enterprise customer base– approximately 4,600 clients worldwide

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Highly Capable Service PlatformOffers Choice and Flexibility

• Networkbandwidth

• Colocation • Managednetwork

• Managedhosting

• Utility compute,storage, security

Unmanaged Value-added managed

Higher value requires greater SAVVIS capability/customer trust

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Comparatively Speaking…

Telcos

SAVVIS

HostingCentric

WholesaleCarriers

TechnologyOutsourcers

• Networkbandwidth

• Colocation • Managednetwork

• Managedhosting

• Utility compute,storage, security

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Critical Praise in North America…

Gartner report available at www.savvis.net/magicquadrantleader

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Gartner chooses Savvis as Tops in Web Hosting

“Savvis bested IBM, AT&T, Verizon Business and Qwest for this honor, which was announced in an August report. Gartner ranked 12 Web hosting providers in terms of their completeness of vision as well as their ability to execute on that vision.

Gartner praised Savvis for its broad portfolio of services, particularly its utility offerings. Gartner says Savvis has focused on standardizing its infrastructure and using automated management.  Savvis "has a strong vision of utility computing that is distinguished by a solid track record of stable delivery of utility offerings to a significant range of customers, and its blade-based utility pricing can be competitive," Gartner says. "Its other offerings are also solid, and priced on par with the market."

– Quote from Network World, September 6, 2006

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… and in Europe

Gartner report available at www.savvis.net/magicquadrantleader

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LondonMetal Exchange

Financial Retail HealthcareMedia &Entertainment

U.S. FederalGovernment

Representative Customers

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Agenda

• SaaS Infrastructure – The Cost Transference Dilemma

• SaaS Infrastructure – The Self-Management Quagmire

• Introducing SAVVIS

• SAVVIS and OpSource – Partners in your SaaS Deployment

• Infrastructure as a Service: Utility Computing - The Perfect Compliment to SaaS

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SaaS Infrastructure – The Cost Transference Dilemma

• Customers turn to you for SaaS delivery because it saves them money

– Typically businesses spend 75% of their total IT budgets on maintaining and running existing systems and software infrastructure

• Maintaining the people, processes and technology to deliver applications is an extremely expensive proposition

– SaaS becomes an attractive alternative as companies can “pay by the drink” under an OpEx versus CapEx model

• Companies no longer need to attract and retain personnel with deep technological expertise • The risk of building out too much infrastructure is reduced given the on-demand nature of

the SaaS solution

– The under-utilization challenge is eliminated • The risk of technological obsolescence is reduced as they no longer have to make the

purchase decision – They rely on you for the technology and thus you take on the risk

• Companies are now given service level guarantees that they could not get through an internal solution

– You now provide money back for the same outages that would occur under their internal watch

– However - they “pay by the drink” because you put up the capital and assume most of the risk!!

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SaaS Infrastructure – The Cost Transference Dilemma

• Using traditional infrastructure models, SaaS does little more than transfer the cost and risk to you…

– Three traditional approaches to SaaS infrastructure • Build it all and manage it all

– You employ the experts, you provide the data center space, you buy the servers, you buy the networking equipment, you buy the security systems, etc, etc…

– The most costly and risky of the traditional approaches

• Colocate and just build the infrastructure– Turn to a data center company for the “environmentals,” you employ the experts, you buy the servers,

you buy the networking equipment, you buy the security systems, etc, etc…– Still incredibly costly, only slightly less risky

• Outsource it all and rely on traditional hosting solutions – Rely on an outside partner to purchase (and lease back) the systems and to manage all of the

infrastructure – Still quite costly due to the 1:1 infrastructure ratio and the under-utilization challenge, far less risky as

your partner assumes all infrastructure management responsibility

– You are willing to risk the capital because of the economies of scale benefit that you enjoy BUT these traditional models do not map to on-demand pricing and delivery

• Profitability is delayed as you recoup the capital that you’ve invested in systems • To support perceived growth, you have no choice but to buy more infrastructure than today’s business warrants

– You charge per seat but you’ve already purchased the entire bus – customer money is liquid, your money is frozen

There is an alternative - we’ll discuss momentarily…

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Agenda

• SaaS Infrastructure – The Cost Transference Dilemma

• SaaS Infrastructure – The Self-Management Quagmire

• Introducing SAVVIS

• SAVVIS and OpSource – Partners in your SaaS Deployment

• Infrastructure as a Service: Utility Computing – The Perfect Compliment to SaaS

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SaaS Infrastructure – The Self-Management Quagmire

There is a reason that customers want to off-load infrastructure management responsibility…

The landscape is slippery and there are pitfalls at every turn - a constant eye must be kept on the following (to name but a few)…

• Physical security controls • Logical security controls • Hardware vendor management • Telecom/network vendor management• Data center environmental management (power, cooling, etc.) • Adherence to compliance mandates and data privacy laws• Software (OS) patch monitoring and upgrades• 24x7 availability • Back-up and Disaster Recovery

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SaaS Infrastructure – The Self-Management Quagmire

• You are already asking your organization to change from application development to application management…

Don’t try to become technology service providers as well!!

– You’re most likely betting the farm on your SaaS strategy – reduce your risk as much as possible • Develop a partnership with a technology services firm

– Leverage investments that have already been made into data center facilities – Spare yourself the expense of hiring infrastructure management experts– Let the partner manage all required vendor relationships – Avoid exposure due to compliance and data privacy laws – Rely on the partner to ensure service levels are met – transfer their SLAs to your customers – Gain credibility with your customers – they know you aren’t in the infrastructure management business

Most importantly…look for an infrastructure as a service model that maps to the on-demand solutions you are providing!!!

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Agenda

• SaaS Infrastructure – The Cost Transference Dilemma

• SaaS Infrastructure – The Self-Management Quagmire

• Introducing SAVVIS

• SAVVIS and OpSource – Partners in your SaaS Deployment

• Infrastructure as a Service: Utility Computing - The Perfect Compliment to SaaS

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SaaS Providers are Increasingly Turning to SAVVIS’ Utility Computing Offering

Shift Towards SAVVIS’

Services Model

Key Drivers

• Understanding that traditional infrastructure models do not map to the SaaS pricing and delivery structure

• Recognition that infrastructure management expertise is not a source of competitive advantage

• Realization that security and compliance requirements are increasingly demanding and introduce tremendous risk

• Understanding that it is difficult to keep pace with the rapid evolution of technology

• Difficulty attracting and retaining staff

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Colo

Customer ManagedCustomer Owned

Space, Power, BW

Customer Infrastructure

Colo + SIM (SAVVIS Intelligent

Monitoring)

SAVVIS ManagedCustomer Owned

Consulting

Space, Power, BW

Customer Infrastructure

Managed Services

ManagedHosting

SAVVIS ManagedSAVVIS Owned

Traditional Nodes

Consulting

Space, Power, BW

SAVVIS Infrastructure

Managed Services

UtilityHosting

SAVVIS ManagedSAVVIS Owned

Virtualized Nodes

Consulting

SAVVISUtility Infrastructure

Managed Services

Flexible IT Services Model

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Utility Computing – The Perfect Compliment to SaaS

• What is Utility Computing?

– Virtualized, dedicated network, server, and storage solutions dynamically provisioned from a global IT resource pool

• Inherent high availability • Eliminates the hardware interoperability nightmare

– Offered under a unique “pay as you go, grow as you go” pricing model • Solutions are infinitely scalable and can be implemented in near real-time to address

changes in your business environments• Allows you to purchase what you need for today and scale for tomorrow’s requirement in

real time– Solutions eliminate waste brought about through the traditional over provisioning

model

– All solutions are designed to minimize or eliminate capital expenditure requirements

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Ethernet Interconnects

Utility Compute Service Architecture

• Utility Service combines a compute blade frame for diskless processing function

• Uses a SAN for high performance, scalable, flexible and highly available fiber channel based storage

• Blade boots from SAN

• Uses network-based appliances for a variety of security, performance enhancement and data integrity services

Compute Blade Frame

with Diskless Blades

CPU + MemoryOnly

Storage Area Network

Fiber Channel Interconnects

Network BasedServices:

Managed FirewallNAT Services

SSL AccelerationLoad BalancingUtility Backup

NIDS

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Application Delivery Infrastructure

Security Computing Storage

Next-Generation

Network Data CenterAccessBusiness

Customers

Ethernet

T1, OC, DSL

Services

Customer portal: visibility through entire value chain

Support systems to manage and monitor infrastructure

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SAVVIS Infrastructure as a Service at Work for a Leading SaaS Provider

• Global Supplier of Online CRM solutions turns to SAVVIS

– Entellium offerings are tailored to meet the sales force and customer management needs of the vast mid-market

• Core value delivered to clientele is an a easy to use, affordable CRM platform – the cost of IT cannot negatively impact this model

• Potential for exponential growth requires an incredibly flexible, economically viable infrastructure

– SAVVIS provides a fully managed, hosted computing infrastructure • Computing, storage, network, security and Professional Services • SAVVIS infrastructure allows Entellium to offer the industry’s most comprehensive service level

agreement (SLA) to its customers – Including a money-back system availability guarantee

– Entellium customer data is protected by SAVVIS managed security services • Security Controls are audited and tested by SAVVIS Professional Services

“SAVVIS, as a trusted partner, allows us to focus on developing the best CRM solutions possible while they manage the critical elements of our IT Infrastructure, ultimately providing an advantage for us and our customers, while also accommodating our rapid growth.”

Paul Johnson – CEO, Entellium

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Agenda

• SaaS Infrastructure – The Cost Transference Dilemma

• SaaS Infrastructure – The Self-Management Quagmire

• Introducing SAVVIS

• SAVVIS and OpSource – Partners in your SaaS Deployment

• Infrastructure as a Service: Utility Computing - The Perfect Compliment to SaaS

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SAVVIS and OpSource – Partners in your SaaS Deployment

• Providing a bundled solution for SaaS enablement

– Bundled offering eliminates the need for your firm to invest time and resources into the creation of a service delivery capability

– One contract, one bill, one point of contact for support – OpSource provides industry-leading SaaS enablement and

delivery services to transition from “boxed” solutions to on-demand applications

• Fully managed IT infrastructure delivered by SAVVIS• 24x7x365 call center support for you and your customers

(delivered under your brand)• Application management, et al.

• Reducing risk in your SaaS strategy – Pay-as-you go, grow-as-you-go model allows you to

preserve your capital – Fully-managed solutions backed by industry leading SLAs

provide both you and your customers with peace of mind

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Thank You and Best of Luck!!

Have you any questions?

Nationwide and Worldwide Sales Support1-800-SAVVIS-1

Phill Lawson-Shanks Vice President, Managed Hosting and Utility Compute [email protected]

Stephen WardDirector – Market Development, Alliances [email protected]

SAVVIS/OpSource Combined Solution [email protected]

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Market Evolution and SAVVIS Products