Following the deal between Verizon and Terremark earlier this year, Louisiana- based CenturyLink has agreed to a deal to acquire Savvis for $2.5B. CenturyLink is a fixed-line phone and Internet access company, saying that it intends to let business customers store and access data and applications over the Internet.
This is a continuation of the trend we see with carriers purchasing hosting companies as a way to acquire cloud service product capabilities. In the case of CenturyLink though, this acquisition of Savvis comes on the heels of the recent acquisition of Qwest Communications (a $20B deal).
Savvis had targeted a ten percent growth in revenue from its hosting business this year, prior to the announcement of this deal. The publicly available plans say that current Savvis CEO, Jim Ousley will run the new hosting unit within CenturyLink. Integration of Savvis may be complicated by the concurrent integration of Qwest. This marks an aggressive step by CenturyLink to expand revenues, and continues the pattern of telecom companies merging with hosting companies to meet the market of rising cloud demand.