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Savvis IT Infrastructure2012 Global IT Leadership Report Fast-Forward to 2013 550 Global IT Execs Share Their IT Outsourcing Strategies

IT OutsourcingA Proven Way to Fast-Forward to Business SuccessA message from SavvisSimple survival amid economic turbulence was is to enhance the ability to respond with more agilitythe theme of our market survey in 2010. In last to changing business needs. With the fast pace ofyear’s report, we saw budgetary constraints eased business today, companies are finding it even moresomewhat, but IT leaders still needed to heed important to take a strategic approach to making surea general cry to do more with less even as their that their IT operations can keep up. In fact, the moreorganizations began positioning themselves for successful companies will leverage their IT operationspotential growth. as a key differentiator that propels them towards faster business success.Our 2012 report is able to deliver much more positivenews. Businesses are again thinking strategically. And Cloud continues to grab ever-larger mindshare of ITIT must remain at the forefront of enabling this. Our leaders as a way to accomplish this. Cloud is already2012 report shares key learnings and strategies from being used by 85 percent of organizations and cloudIT leaders around the globe, comparing attitudes, outsourcing will play a huge role in the IT landscape ofissues and potential solutions so you can steer your IT the next decade. The United States appears to be takingorganization in the right direction. the lead in this. In particular, a significant proportion of US organizations plan to migrate the majority of their ITThis year, heads of IT told us that budgets are less operations over the next 10 years from in-house IT, torestrictive than even 12 months ago. Only one in managed service providers, to cloud outsourcing.four organizations reported that budget constraintswere preventing them from accomplishing their IT In summary, the priorities of IT executives across thegoals. Instead, IT is seen as a key enabler of business globe are to provide a competitive advantage throughsuccess. Reading between the lines we believe that IT enhanced agility, scalability, and enhanced operationaldepartments need to focus on three critical business efficiencies. One of the key ways to do this, as evidencedgoals: first, increase collaboration both internally and by this survey, is to adopt an outsourcing strategy.throughout the extended enterprise; second, enableoperational efficiencies at all organizational levels and At Savvis, outsourcing is at the heart of what we do forall departments; and finally, achieve a competitive enterprises. With Savvis’ best-of-breed enterprise-classadvantage in the marketplace. cloud and colocation solutions, we promote business agility; provide transparency, predictability, and controlBut how to get there? According to the respondents of over IT cost models; and maximize the adaptability ofour survey the answer is one word: outsourcing. IT operations with one-stop shopping across a broad portfolio of services for cloud, network, managedIT leaders are beginning to understand the strategic hosting, colocation, security and application support.importance of outsourcing. Globally, organizations areswiftly moving up the learning curve about outsourcing. Whether you are taking your first foray into outsourcing,More respondents in 2012 agreed that owning IT or whether you are ready to embark on a completeinfrastructure wasted resources (60 percent) than in transformation of how your IT operations are managed,2011 (46 percent) or 2010 (38 percent). And from this we can work closely with you, as we do with all ouryear’s survey, we find at least one third of organizations global clients to understand your business challengesworldwide are not outsourcing applications that they and design solutions to help you achieve meaningfulfeel should be outsourced. results. We look forward to hearing from you.This is a trend that we see in the Savvis global client Best regards,base as well. Increased efficiencies that results incost savings are some of the drivers behind thistrend. That’s not surprising. In fact, looking forward,companies now say they expect to save a whopping25 percent of their IT budgets through outsourcing.But what you might find surprising is that cost is notthe primary driver. The primary reason to outsource Bill Fathers2012 Global IT Leadership Report IT Outsourcing 2

Leaving constraints behind, fast-forwarding after looking back, they now see a better path for fast-to the future forwarding their organizations to business success.2008 seems a long time ago. Yet organizations untilrecently were still struggling with the aftermath of the What other lessons have 550 surveyed organizationsfinancial crisis and the resulting economic downturn. learned? Read on for some surprises from our 2012Today, budgets are still somewhat constrained — in report.some parts of the world more than others. But in ourthird annual survey of CIOs and IT decision makers, Owning infrastructure results in high costs,we’re seeing the shift from a focus on cost cutting to wasted resourcessetting business strategy nearly complete. And in this Conventional IT wisdom has been that owning andenvironment, the strategy an organization pursues for operating your own IT infrastructure is more costits IT operations is more important than ever. effective than outsourcing. But our 2012 survey definitively shows that most organizations’ experienceSpecifically, over the next 12 months, organizations has been the opposite. Three in five organizationstold us that they need their IT departments to facilitate surveyed reported that owning and operating theirthree critical goals: first, increase collaboration both own IT infrastructures resulted in higher costs andinternally and throughout the extended enterprise; wasted precious resources (see Figure 1). The US andsecond, enable operational efficiencies at all Singapore are the most likely to recognize this (73organizational levels and all departments; and finally, percent and 74 percent, respectively).achieve a competitive advantage in the marketplace. Interestingly, organizations in Japan — which wereThe good news is that organizations reported 2011 the most likely to be resource constrained — werebudgets that were overall less restrictive than in also the least likely to realize that owning their own2010. This year, only one in four organizations overall IT infrastructure creates higher costs (44 percent).reported having IT budget constraints. This varied Likewise, UK organizations, almost half of which werefrom region to region. Japanese companies were the budget-constrained, were also among the least likelymost likely to be challenged by reduced budgets (48 to understand that owning IT infrastructure wastespercent of respondents). The United Kingdom was resources (49 percent).only slightly behind that (45 percent) compared tojust 22 percent in the US and Germany. Otherwise,companies reported other challenges as being either Figure 1:equal or more top of mind than doing more with less. The number that agree that owning their own IT infrastructure createsHong Kong companies were equally divided between higher costs and wasted resourcesbeing challenged by budget constraints, needing varies across the globeto increase collaboration, and being under pressureto drive efficiencies (28 percent each). German 80%organizations said their toughest challenge was ITstaffing (31 percent). And in Singapore, more than half 70%of respondents (56 percent) cited greater operational 60%efficiencies as their No. 1 challenge. 50%But looking back over the past year’s IT decisionsand activities raised some regrets. CIOs and VPs of IT 40%reported that they made mistakes when spending their 30%IT dollars. Specifically, most admitted that purchasingtheir own IT assets turned out to be a mistake. In 20%retrospect, outsourcing IT infrastructure would have 10%been the wiser choice. 0%Indeed, looking forward, companies now say they USA UK Germany Hong Japan Singaporepredict they would save a whopping 25 percent of Kongtheir entire IT budgets through outsourcing. And that2012 Global IT Leadership Report IT Outsourcing 3

We also found a correlation between the global annualrevenue of respondents and their opinions about Figure 3:the costs of owning and maintaining their own IT Organizations with larger revenuesinfrastructures. The higher the annual revenue of the are more likely to realize previousorganization, the more likely they are to agree thatowning IT infrastructure wastes resources and results investment mistakes 70%in unnecessary cost. 60%The good news here: globally, organizations arecatching on. More respondents in 2012 agreed that 50%owning IT infrastructure wasted resources (60percent) than in 2011 (46 percent) and 2010 (38 40%percent). See Figure 2. 30% Figure 2: 20% More organizations now, than ever 10% before, agree that owning their own IT infrastructure creates higher costs and 0% wasted resources Owning and operating My organization has IT 70% our own IT infrastructure equipment that we now creates higher costs and regret purchasing wasted resources 60% $1 Billion - $25 Billion global revenue $25 Billion - $50 Billion global revenue 50% $50 Billion - $100 Billion global revenue 40% 30% US companies seem most comfortable 20% with non-ownership IT model Judging from the fact that three quarters of 10% organizations in the United States agree that owning IT infrastructure creates high costs 0% and wastes resources — the second highest The number who The number who The number who agreed in 2012 agreed in 2011 agreed in 2010 percentage globally — we believe that US companies will have a very positive attitude toward outsourcing. This opinion about owned IT infrastructure has changed significantly sinceMore regrets: unnecessary infrastructure 2010, when just 47 percent of respondentspurchases agreed that owning IT infrastructure wastesAnother important insight from the survey is that more resources, and since 2011, when 50 percent ofthan half of organizations surveyed admit to having IT respondents agreed.equipment that they now regret purchasing. Additionally, we found that US organizationsOnce again, we see that organizations with the highest are most likely of all countries surveyed to haverevenues are more likely to agree with the statement IT equipment that they now regret purchasingthat they regret IT purchases. Figure 3 shows that (66 percent), compared to 38 percent in Japan,awareness of previous investment mistakes rises as and just 34 percent in both Hong Kong andcompany size increases. Singapore. From this we conclude that US-based organizations may be the most comfortable with a non-ownership IT model.2012 Global IT Leadership Report IT Outsourcing 4

Figure 4: If IT budget was not an issue, IT departments could focus on helping the company grow and evolve Having to do more with less budget Increasing collaboration across the organization Gaining efficiencies throughout the company Focusing our resources on activities that will provide a competitive advantage Recruiting the best people with the right skill set Supporting business expansion and aggressive development Finding the best breed of suppliers to deliver cost-effective solutions 0% 5% 10% 15% 20% 25%Outsourcing frees up money for morestrategic initiatives Figure 5a:A logical inference we can make from the results of Organizations predict to save anthis survey is that if a larger number of organizations average of 26 percent of their ITused outsourcing to free up money from their budgets, budget through outsourcingthey could focus their attention on more strategicissues. Figure 4 shows how once budget challengesare eliminated from the picture, organizations can USAturn their attention to increasing collaboration withinthe organization, being more agile and flexible, andimproving competitiveness. UKOutsourcing — and expected savings from Germanyoutsourcing — on the riseAlthough we could infer that organizations would benefitfrom outsourcing, we were curious as to how many Hong Kongactually outsourced IT infrastructure, or had specific plansto outsource all or part of their IT operations. JapanWe found that outsourcing plays a significant rolein today’s IT strategies. Organizations are presently Singaporeoutsourcing slightly more than a quarter of their ITinfrastructure. By doing so, they anticipate saving 26 0% 5% 10% 15% 20% 25% 30% 35%percent, on average, of their IT budgets. US companiesanticipate saving the most — in fact, they expect tosave twice as much as Singapore through outsourcing(see Figure 5a). “ e prioritize outsourcing because the companies we W outsource to provide better services than we couldWe also found differences in what organizations ever offer in-house — and for a reduced cost.”expected to save through outsourcing across vertical – 2012 Survey Respondentindustries. Media firms expect to save the most (29percent), and government/public sector organizationsthe least (22 percent). See Figure 5b.2012 Global IT Leadership Report IT Outsourcing 5

Not surprisingly given these numbers, organizations Figure 5b: expect that within five years a full 40 percent of their infrastructures will be outsourced. On average, this is The average IT budget savings predicted a global increase of 15 percent, although the specific as a result of outsourcing varies across percentage varies from country to country (see Figure the verticals 6a). Singapore organizations expect to outsource the most infrastructure (53 percent), followed by Finance the United States (44 percent). Germany plans to outsource the least (33 percent). Media, ent. publishing & retail Taking a look at this same point from the vertical industry perspective, although the private healthcare Public sector & government sector currently outsources the largest amount of infrastructure (28 percent), organizations in that Healthcare vertical are predicted to have the smallest increase in public sector outsourcing over the next five years (see Figure 6b). Healthcare private sector One very notable point: When analyzing outsourcing plans based on organizations’ global revenues, smaller Software companies plan to increase their outsourcing over the next five years at a much faster rate than larger Automotive transport ones, implying that this is where much of the growth in & logistics (GER only) outsourcing activity will be. 0% 5% 10% 15% 20% 25% 30% 35% Figure 6b: Percentage of infrastructure outsourced Figure 6a: now, and estimated percentage to be The percentage of outsourced IT outsourced in 5 years infrastructure will rise over the next five 15% years as organizations realize fiscal rewards Finance 14% USA Media, ent. publishing 13% & retail 13% UK 15% Public sector & government 12% Germany Healthcare 14% public sector 14% 11% Hong Kong Healthcare private sector 14% 15% Japan Software 26% Automotive transport 23% Singapore & logistics (GER only) 0% 10% 20% 30% 40% 50% 60% 0% 10% 20% 30% 40% 50% Average percent of infrastructure currently outsourced Average percent of infrastructure currently outsourced Average percent of infrastructure estimated to be Average percent of infrastructure estimated to be outsourced in five years outsourced in five years Estimated percentage increase of outsourced infrastructure Estimated percentage increase of outsourced infrastructure in five years in five years2012 Global IT Leadership Report IT Outsourcing 6

Figure 7: Reasons that drive organizations’ need to increase the percentage of infrastructure they outsource Increase IT agility to address changing business needs Eliminate dependence on legacy infrastructures Need to shift CapEx to OpEx To refocus resources on core strengths Mitigating compliance risk Gain transparency and control over cost models Lack of IT staff Need to expand globally Need for common platform and/or infrastructure processes 0% 10% 20% 30% 40% 50% 60%Outsourcing for agility Overall, global organizations are warming to the ideaCost savings are not the only reason organizations are that outsourcing delivers numerous benefits — all ofturning to outsourcing. A full half of all organizations which combine to make them more competitive. Weacross the globe are outsourcing to enhance their ability saw this reflected in the fact that 59 percent of theto respond more agilely to changing business needs. senior IT decision makers we surveyed agreed that new IT applications and services should be outsourced.This reason for outsourcing is most prevalent in the Only 47 percent agreed with that statement in our 2011United States (where 59 percent of respondents survey. However, the precise percentages varied bypointed to agility as a reason to outsource), Japan industry (see Figure 8).(56 percent) and the UK (50 percent). Figure 8:Looking more closely, we found that many Those who agree that their companyorganizations feel their agility is being hampered byexisting legacy systems. Outsourcing, then, is seen should prioritize an outsourcedas a way to eliminate their dependence on such infrastructure solution over owned ITlegacy-owned infrastructure. Indeed, more than two infrastructure for new applications/in five respondents overall pointed to aging in-house services they deployinfrastructure as a reason to outsource. In Singapore Financeand the United States, the percentages were muchhigher — 56 percent in Singapore and 53 percent in Media, ent. publishingthe United States. & retailOutsourcing solves staffing problems, allows Public sectororganizations to focus on core businesses & governmentThe organizations we surveyed pointed to other Healthcarebenefits of outsourcing other than simply cost and public sectoragility. In Germany, for example, organizations arehaving trouble finding qualified IT personnel. For them, Healthcareoutsourcing is a way of easily and efficiently solving private sectortheir staffing challenges. Hong Kong companies,on the other hand, wish to increase outsourcing so Softwarethey can redirect IT resources to enhance their corebusiness strengths. Automotive transport & logistics (GER only) 0% 10% 20% 30% 40% 50% 60% 70% 80%2012 Global IT Leadership Report IT Outsourcing 7

United States leading in some Huge need for quality outsourcing services outsourcing areas — but not all in coming months and years When we looked at the amount of infrastructure Given that so many organizations plan to prioritize organizations have already outsourced, the outsourcing of new IT applications and services, we United States was in the lead (30 percent). US were curious about the specific technology areas they companies also predict the biggest savings as were targeting. a result of outsourcing (31 percent). However, although this expected savings is almost twice As Figure 9 shows, fewer than half of organizations, on that of Singapore (16 percent), within five average, currently outsource in each area, ranging from years we expect Singapore to have the highest a high of 49 percent for test and development, and a percentage of outsourced infrastructure — 52 low of 27 percent for pre-production infrastructure. percent, compared to 44 percent in the United However, between 31 percent and 38 percent of States, and just 3 percent for Germany. organizations are evaluating outsourcing infrastructure for each area. This implies a huge opportunity for Singapore-based organizations are also outsourcing in coming months. For example, 38 the most likely (78 percent compared to 76 percent of respondents are investigating infrastructure percent in the United States) to agree that they outsourcing for big data analytics and regional should prioritize an outsourced infrastructure applications. Meanwhile, pre-production infrastructure solution over owned IT infrastructure for new is looking to play catch up, with 35 percent of applications or services. organizations evaluating outsourcing for this area. Figure 9: Elements currently being outsourced, versus those being evaluated Test and development Websites Back-up and disaster recovery Storage eCommerce Non-mission critical applications Mobility Regional applications Big Data analytics Production infrastructure Mission critical applications Pre-production infrastructure 0% 10% 20% 30% 40% 50% We are currently outsourcing infrastructure for this area We are evaluating outsourcing for it2012 Global IT Leadership Report IT Outsourcing 8

Figure 10: At least a third of organizations are currently NOT outsourcing applications that they think they should be Networking devices Storage Data center space Big Data analytics Enterprise applications Servers/mainframe Back-up & disaster recovery Mobility SAP Laptops & PDAs/ smart phones/desktops eCommerce Security devices 0% 10% 20% 30% 40%Contractual obligations main barrier to Keeping a sense of control over IT is still an issue.outsourcing Although the public healthcare and software sectorsOne of the most interesting findings from our 2012 are most likely to say that they don’t outsource becausesurvey was that at least one third of organizations they feel more in control if they manage infrastructureworldwide are not outsourcing applications that they feel themselves, they are not alone. Altogether, 40 percentshould be outsourced. Figure 10 shows the applications of all organizations state a lack of control as a reasonand services they feel they should be outsourcing. not to outsource. This supports our theory that starting with managed services could be perceived as a less“ would prefer all new applications and services that the I risky way for organizations to get their foot on the organization deploys this year to be outsourced, we can outsourcing ladder. utilize our funds in a more targeted way, and then have all the latest applications and services, as our needs as a company change.” US firms beginning their journey to - 2012 Survey Respondent cloud outsourcing Currently, most organizations around the worldWhy would this be? Organizations today are most still maintain the majority of their infrastructurelikely to name contractual obligations as the main in house. For the first time, however, less thanreason not to outsource, whereas in 2010 and 2011 half of respondents from the United States (49company culture was the most common inhibitor. This percent) said they kept the majority of theirindicates a major shift in thinking. The exceptions are infrastructure in house. This number is beat onlythe United Kingdom, where company culture is still the by Singapore (42 percent).No. 1 roadblock; and Hong Kong, where sunk cost isthe biggest inhibitor. Adding to this, a significant proportion of organizations in the United States seek to migrate over the next 10 years from in-house, to managed service providers and to the cloud in the next ten years (see Table 1).2012 Global IT Leadership Report IT Outsourcing 9

Table 1:A glance at the next ten years of outsourcing in the USA The majority will be outsourced The majority will be Timeframe The majority will be in-house to a managed provider outsourced in the cloud Currently 49% 9% 6% In 12 months 29% 19% 9% In 2 years 19% 31% 15% In 5 years 19% 32% 30% In 10 years 17% 20% 40%Table 2:Reasons why organizations in the USA are not outsourcing have changed in the past 12 months Reasons why organizations in the USA are not 2012 2011 2010 outsourcing have changed in the past 12 months If we manage it, then we are in control 55% 23% 25% Contractual obligations 47% 23% 40% Previous poor service from a supplier 47% 18% 24% Concerned about vendor lock-in 47% - - Company culture 46% 42% 39% Benefits of a utility-based, pay-per-use Why some US organizations don’t outsourcing model outsource Outsourcing services can be delivered in a variety of We were curious as to why some US ways. An increasingly popular model for outsourcing organizations did not outsource. Company is the “utility-based” model, in which the usage of IT culture, although a big inhibitor in other services is flexible and adaptable to business needs geographic areas — notably, the United Kingdom and, therefore, rather than paying a fixed upfront — was only the fifth most common reason in our CapEX or long-term contract fee, the cost varies with 2012 survey. This marked a significant change the amount of services used. from previous years (see Table 2). Our respondents believed that the utility model For US companies, the overwhelming reason delivered significant benefits. The three most not to outsource is control. But the fact that commonly cited were cost reduction or containment poor vendor service (47 percent) and fear of (39 percent), infrastructure scalability and flexibility vendor lock-in (47 percent) were also high on (39 percent) and improved quality of service (37 the list indicates that the choice of vendor is percent). Interestingly, enhanced security wasn’t far a key decision — companies need a trusted behind (35 percent). See Figure 11. service provider before they are confident enough to outsource.2012 Global IT Leadership Report IT Outsourcing 10

Figure 11: There are several benefits of outsourcing IT infrastructure using a utility-based model Cost reduction or containment Infrastructure scalability and flexibility Improved Quality of Service (QoS) Enhanced security Reduced administration time Faster time-to-market Environmental considerations Ease-of-provisioning Ability to more quickly leverage innovative platforms Future-proofing infrastructure Support variable traffic needs and dynamic business requirements 0% 10% 20% 30% 40%Nine-tenths of organizations already orbeginning to benefit from outsourcing Figure 12:Companies were overwhelmingly positive about Organizations that are satisfied with theeither already seeing benefits from their outsourcing benefits of outsourcing IT infrastructure,arrangements (48 percent) or beginning to see by global revenuethe benefits (39 percent). Overall, 87 percent ofrespondents viewed the actual or probable benefits ofoutsourcing in a positive light. 80% 70%Organizations with larger revenues are more likelyto be already seeing benefits from their outsourcing 60%arrangements (Figure 12). 50% 40% US Firms Benefit Most from Flexibility and Scalability of Utility Model 30% Although all other countries surveyed cited 20% cost reduction as the top benefit of the utility- based outsourcing model, US firms ranked 10% that particular benefit seventh. Instead, US 0% organizations told us that infrastructure $1 Billion - $25 Billion - $50 Billion - scalability and flexibility was the single most $25 Billion $50 Billion $100 Billion important benefit, followed by improved quality global revenue global revenue global revenue of service and enhanced security (see Table 3). Yes, we are satisfied the organization is benefiting It is early, but we are starting to see the benefits A full 62 percent of US organizations — the largest percentage of all countries surveyed — expressed satisfaction with the benefits they had received from outsourcing.2012 Global IT Leadership Report IT Outsourcing 11

Table 3:Benefits of a utility-based model to organizations in the USA compared to the rest of the world Benefits of a utility-based model to organizations in the USA compared to USA Global Total the rest of the world Infrastructure scalability and flexibility 38% 39% Improved Quality of Service (QoS) 36% 37% Enhanced security 36% 35% Environmental considerations, e.g. reduced power use and CO2 emissions 35% 25% Ability to more quickly leverage innovative platforms 31% 22% Faster time-to-market 28% 25% Cost reduction or containment 27% 39%Adoption of cloud computing increasing Although a relatively new technology — on average,You can’t talk about IT in 2013 without talking about organizations that we surveyed have only deployedcloud computing. Cloud computing is the delivery cloud for 11 months — cloud is already being used byof computer resources (hardware and software) 85 percent of organizations. This represents a sizableas services over a network, usually the internet, in increase from 2010 and 2011. Cloud computing usea utility-based, pay-per-use delivery model. Most is more prevalent in larger organizations, and theenterprises have either already begun moving IT majority of cloud users have implemented privateapplications and services into the cloud or area rather than public clouds (see Figure 13).planning to do so.“ e just made some large IT investments into hardware W to support the large virtual cloud infrastructure which we are planning to roll out shortly.” - 2012 Survey Respondent Figure 13: Organizations are more likely to be using, or partly using, private cloud than public cloud 30% 25% 20% 15% 10% 5% 0% Back-up and Batch Big Data Mission critical Non-mission Storage Test and disaster processing analytics applications critical development recovery applications Using private cloud throughout organization in this area Partly using private cloud Using public cloud throughout organization in this area Partly using public cloud2012 Global IT Leadership Report IT Outsourcing 12

Cloud on the horizon: The coming juggernaut As Figure 14 also illustrates, currently the majority ofin outsourcing organizations keep their IT infrastructure in-house (redWhen we asked our 550 survey subjects about their line), but that will change over the next 10 years to justprojected use of cloud outsourcing, their responses 18 percent. The software industry sector is most likely toindicated it would be a major force within 10 years. keep infrastructure in-house (80 percent) — probablyGiven the patterns we saw in the responses, we believe for control reasons — compared to around half that (44that organizations may consider using a managed percent) for the private healthcare sector. Especiallyoutsourcing service as a “transitional” step before noteworthy is the fact that the number of organizationsoutsourcing completely into the cloud. keeping the majority of their infrastructure in-house has decreased over the last three years. We expect this toAs you can see from Figure 14, the number of continue in coming years.organizations that plan to outsource the majority oftheir infrastructure to managed service providers Concerns about security are the main impediments(grey line) will increase over the next two years, then to cloud adoption. But organizations are also worrieddecrease as cloud begins to dominate the landscape, about their ability to manage and control cloudrising from just four percent today to 40 percent deployments, and have concerns as well about thewithin 10 years. legal and compliance issues that could arise when storing or processing workloads remotely.We believe this gradual movement to the cloud couldbe due to a number of reasons, perhaps to acclimate “ loud providers are constantly developing and offering Cinternal cultures to outsourcing, to pilot outsourced more specialist services for the applications we use. Ifunctions, or to mitigate security concerns. think cloud is becoming more secure and it’s certainly significantly more widely available than ever before.” - 2012 Survey Respondent Figure 14: Cloud outsourcing will overtake both in-house management and the use of outsourced managed services in the next five to ten years 60% 50% 40% 30% 20% 10% 0% Currently In 12 months In 2 years In 5 years In 10 years In-house/owned Outsourced managed services Outsourced cloud2012 Global IT Leadership Report IT Outsourcing 13

Figure 15: Important benefits of cloud computing for enterprises Ability to scale up & down consumption to manage ﬂuctuating demand Improved reliability Enhanced security Reduced administration time Lower TCO for whole infrastructure Low cost of entry Environmental considerations Faster time-to-market Flexible billing models 0% 10% 20% 30% 40%Benefits of cloud computing Organizations that are using, or plan to use, cloud doScalability — or the ability to match computer, storage, so most frequently for email (59 percent) and internetand bandwidth resources to fluctuating needs — was (57 percent). However, this differs considerably bythe No. 1 benefit of cloud cited by respondents across sector: the media sector is more likely to put customermost countries (see Figure 15). The only exception was relationship management (CRM) into the cloud, andHong Kong, where improved reliability was the most organizations in the software sector are more likely toimportant benefit (38 percent). put their intranets into the cloud (see Figure 16). “ everal key business tools such as email have been S moved to the cloud to largely divorce us of management responsibility — driving cost efficiencies through headcount reduction more than systems.” - 2012 Survey Respondent Figure 16: Enterprise organizations are putting multiple applications into the cloud Email Intranet Website & Microsite CRM ERP Supply chain management Finance applications Big Data analytics 0% 10% 20% 30% 40% 50% 60%2012 Global IT Leadership Report IT Outsourcing 14

Table 4:Organizations in the USA are ahead of the rest of the world in terms of cloud adoption Organizations in the USA are Those using PRIVATE cloud Those using PUBLIC cloud ahead of the rest of the world in throughout organization in this area throughout organization in this area terms of cloud adoption Global Total USA Global Total USA Storage 19% 22% 10% 18% Big Data analytics 17% 24% 9% 17% Test and development 16% 28% 6% 10% Non-mission critical applications 15% 23% 9% 16% Mission critical applications 15% 18% 9% 19% Back-up and disaster recovery 12% 16% 8% 17% Batch processing 10% 16% 8% 16% company culture is no longer perceived as holding US organizations use cloud the most organizations back from attempting to outsource all or More organizations in the United States are using part of their IT operations. cloud now than in 2011 or 2010. However, although they have increased use of both private and public Moreover, organizations now clearly understand clouds, they have decreased use of hybrid clouds how outsourcing can enable them to focus and from 28 percent in 2011 to just 13 percent in 2012. improve other areas of the business other than IT. Still, organizations based in the United States are By redirecting resources away from infrastructure more likely than those from the rest of the world to their businesses’ core competencies, increasing to use, or plan to use, private and public clouds for collaboration, and enhancing operational efficiencies, each of the applications listed in Table 4. they position themselves to become more competitive in today’s fast-changing environments.Today, just four percent of organizations in the United Fast-forwarding 10 years ahead to the IT landscapeStates don’t deploy cloud in some way, compared to as forecast by answers to our 2012 questions, we see48 percent in Singapore. This is interesting considering that outsourcing — both traditional managed servicesthe large percentage of organizations in Singapore as well as cloud-based — promises to play a dominantthat currently outsource their infrastructures. Also role in enterprise IT around the world. However, forinteresting is the fact that companies in Singapore have these forecasts to come true, organizations need tobeen using cloud the longest of any other country (one first address some key challenges. Alleviating securityyear and five months). This implies that movement to concerns is one of these. Convincing organizationsthe cloud may have stalled there. that they can safely relinquish control of their IT infrastructure to an outsourcing vendor is another.On the other hand, organizations in the United Stateshave been using cloud for the least amount of time, The benefits of IT outsourcing are wide and varied. Andimplying a recent uptick in deployments. And US trusted outsourcing providers like Savvis can amplifycompanies are more likely to put their intranets in the these benefits, reduce the risks, and allay the concerns ofcloud than their email systems — the opposite of the organizations by offering a broad range of flexible, high-rest of the world. performing, and secure solutions capable of meeting business needs both today and in the future.ConclusionOrganizations have come a long way in the last 12 To receive more information on Savvis and to learnmonths when it comes to attitudes and behaviors why our enterprise-class IT outsourcing solutionsabout outsourcing. Most prominently, a larger number are leading the field, please contact Savvis atof IT leaders realize the benefits of outsourcing, and 1.800.728.8471 or email us at strategicITO@savvis.com.2012 Global IT Leadership Report IT Outsourcing 15

About SavvisSavvis, a CenturyLink company, is a global leader in cloud • row globally. With more than 50 data centers in Ginfrastructure and hosted IT solutions for enterprises. North America, Europe and Asia (including India),Nearly 2,500 unique clients, including more than 30 of we’re already where you want to be — with proactivethe top 100 companies in the Fortune 500, use Savvis monitoring and management as well as round-the-to reduce capital expense, improve service levels and clock and onsite support. And, with our globally-harness the latest advances in cloud computing. consistent standardized ITIL processes, we ensure seamless delivery and operational support.Savvis IT Outsourcing SolutionsAt Savvis, our Strategic ITO specialists know Savvis provides:infrastructure and applications for large enterprises. • Commercially-flexible contract termsWhile you focus on your core strengths and • Option to tailor SLAsdeveloping products that differentiate your company, • Pay-per-use utility modelslet us provide the IT infrastructure and applications • Support for hybrid infrastructuresthat sharpen your competitive edge in today’sdemanding, ever-changing global marketplace. • roadest product portfolio with enterprise-grade B quality-of-serviceSavvis offers a broad set of services that helps large • Global network and data centersenterprises to: • Globally-consistent standardized ITIL processes• ncrease business agility. Respond to changing I • Team of large enterprise IT outsourcing specialists needs and opportunities in real-time with a tailored • xpertise in Banking and Financial Services, Media, E yet flexible infrastructure. Gain transparency, Consumer Brands, Government and Software sectors predictability and control over your cost models, time-to-market, product portfolio and many other business drivers. Learn more at: www.savvis.com/StrategicITO• aximize IT flexibility. Savvis offers one-stop- M shop convenience across a broad portfolio of About the Research This independent survey was commissioned by Savvis services for cloud, network, managed hosting, and conducted with 550 CIOs, IT Directors, Heads of colocation, security and application services — IT and Senior IT Managers of global large enterprises all with predictable and reliable enterprise-class based in the USA, UK, Germany, Japan, Hong Kong performance and security, and with customizable and Singapore, and was completed in August 2012. The service-level agreements (SLAs). research was conducted by Vanson Bourne, a research• itigate risk. Maintain business continuity with M based technology marketing consultancy offering our proven migration approaches, integration and clients analysis and advice based on incisive, rigorous governance best practices, regulatory know-how research into their market environment. The research and SLA expertise — for the life of your contract and used a combination of online fieldwork methodology all tailored to adapt to your changing business and and telephone interviewing. All research carried out customer needs. by Vanson Bourne adheres to the latest MRS Code of Conduct. Demographic detailing of respondent communities includes industry sector, country in which the respondents were based, and size of business.Global Headquarters Canada EMEA Asia Pacific Japan1 Savvis Parkway 6800 Millcreek Drive Eskdale Road 50 Raffles Place 7th FloorSt. Louis, MO 63017 Mississauga, ON Winnersh Triangle Singapore Land Tower Kyodo Building L5N 4J9 Wokingham #13-01 (Jinbocho 3cho-me)Tel 1.800.SAVVIS.1 Berkshire RG41 5TS Singapore 048623 3-29 Kanda Jinbocho(1.800.728.8471) Tel 1.877.387.3764 United Kingdom Chiyoda-kuwww.savvis.com www.savvis.ca Tel +65 6768 8000 Tokyo 101-0051 Tel +44 (0)118 322 6000 www.savvis.sg Japan www.savvis.co.uk Tel +81.3.5214.0151 www.savvis.jp2012 Global IT Leadership Report IT Outsourcing 16© 2012 CenturyLink, Inc. All rights reserved. The Savvis mark, logo and certain Savvis product namesare the property of CenturyLink, Inc. All other marks are the property of their respective owners.

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