Savvis CEO suggests more Toronto investment

Savvis Inc. wants to be a “major force” in the Canadian data centre hosting market and will continue to invest in the Greater Toronto Area.


The pledge was made by Savvis CEO Jim Ousley just hours after his company closed its US$121-million acquisition of Toronto-based managed hosting and collocation provider Fusepoint Inc. on Wednesday. With its purchase, the St. Louis-based cloud hosting provider will take over Fusepoint data centre facilities in Mississauga, Ont., Montreal and Vancouver. Nominate someone you work with for a ComputerWorld Canada IT Leadership Award 

“We came to Canada to be a major force in the market and I spent time today listening to the (Fusepoint) management team and the marketing team talk about future opportunities,” Ousley said. “Clearly, that would involve expansion.”


After the buy was first announced earlier this month, Mark Schrutt, director of strategic sourcing at IDC Canada Ltd., said that Fusepoint is a very good purchase for Savvis, but warned that the company’s Toronto area data centre is “pretty well full.”


Ousley recognized this issue and reiterated his company’s commitment to servicing the “financial capital of Canada.” He added that Savvis’ significant financial services customer base will be looking for the hosting provider to offer even more hosting options around the GTA, including in the downtown core and in the east end.


“We have a strong presence in what we call proximity hosting in many other financial centres around the world,” Ousley said. “So we need to be closer to the financial exchanges … and we’ll be exploring that.”


“We probably need to expand a little closer to downtown Toronto,” he added.


As for Fusepoint’s future as a brand, Ousley confirmed the company and its employees will be sticking around for the time being.


“We’re looking long term at how we’re going to integrate the brand, but they do have good brand identity, so we will continue to call Fusepoint, a division of Savvis,” he said. “We will continue to use the brand. The phones will be answered by Fusepoint and so on.”


“Customers will be dealing today with the same people they dealt with yesterday,” he added.


Ousley said that Savvis has a fairly good history of both smaller and larger scale acquisitions, so he doesn’t expect customers will face any surprises.


Savvis’ entry into the Canadian market, and more specifically into the Toronto area, comes at a time of rapid expansion for the hosting industry.


Just days after the purchase was first announced, Toronto-based Q9 Networks Inc. announced it was injecting $125 million to build a new GTA data centre. And last month, Vancouver-based Peer 1 Hosting Inc. announced it completed a new US$40-million Toronto area facility.


Jay Newman, Peer 1’s vice-president of sales, said that while the market is certainly filling up in Toronto, its ability to provide a great customer experience will hopefully keep Peer 1 ahead of its competitors.


“Let’s not diminish that Fusepoint’s a good company and they have clients that they’ve attracted and I don’t anticipate because of the acquisition those clients will be going away,” he said. “I will say that I think Peer 1 has without a doubt one of the most loyal customer bases of any company in the hosting industry. We are in the top five of the world’s largest hosting providers, which puts us a little bit above of where Fusepoint was.”


Newman said Peer 1 measures its customer experience via the Net Promoter score, adding that he’d like to see more hosting providers latch onto the benchmarking system.


As for Peer 1’s newly up-and-running Toronto data centre, Newman estimated it would take about two to three years to fill up.

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