Savvis Realigns Business Units

The other day Savvis realigned itself into three business units:  Hosting, Network, and Financial Services. The move will be overseen by Bill Fathers, who has been appointed as SVP, Managing Director US.  The move makes sense given that Savvis’s customers really do break down on these lines, and the needs of each group are quite different from the others.  Financial Services customers are interested in business continuity and VPNs and such, customers of Savvis’s Tier-1 IP network and infrastructure  are looking at connectivity of various sorts, and Hosting customers care manly about servers, rack space, cross connects, etc.  Separate groups will let Savvis target each more effectively, in theory anyway.

Dividing into and rearranging business units is a common pastime of companies in this sector, but there are different ways of going about it.  Last year Level 3 reorganized itself into 4 divisions: Wholesale, Enterprise, Content, and Europe.  But when they ran into provisioning problems while integrating their 7 acquisitions, those problems spilled over into more than one division – mostly Wholesale and Enterprise.  They weren’t and aren’t really separate units so much as separate front ends on top of the same provisioning systems.  There are many variations on such customer facing business units throughout the industry.

Zayo is way on the other end of the spectrum, when they reorganized into Zayo Bandwidth, Zayo Managed Services, and Onvoy Voice Services, they really separated them.  Separate NOCs, sales, service, separate everything – except capital allocation, there is a great discussion at the bottom of that post also that is worth reading.  The idea behind Zayo’s plan is that there may be savings in centralization, but there is greater focus and accountability with truly independent business groups.

One can’t always tell from the PR, but Savvis’s move seems to be more of the Level 3 variety – three customer-friendly faces on top of the same organization.  We’ll just have to see whether their realignment helps them  or not.  I am not qualified to say which is the right way to go, so I’m just going to watch and throw the occasional peanut.

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Categories: Datacenter · Internet Backbones