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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 2002

OR

EXCHANGE ACT OF 1934

For the transition period from                         to                        

Commission file number 0-29375

SAVVIS COMMUNICATIONS CORPORATION

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

1 SAVVIS PARKWAY

ST. LOUIS, MISSOURI 63017

(Address of principal executive offices) (Zip Code)

(314-628-7000)

(Registrant’s telephone number, including area code)

12851 Worldgate Drive

Herndon, Virginia 20170

(Address of principal executive offices) (Zip Code)

(703)-234-7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:    None

Securities Registered pursuant to Section 12(g) of the Act:    Common stock, par value $.01 per share

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes    x             No     ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).  Yes  ¨     No   x

The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2002 was approximately $41,742,000.

The number of shares of the registrant’s common stock outstanding as of February 14, 2003 was 94,028,638.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents incorporated by reference and the Part of the Form 10-K into which the document is incorporated:

Portions of the definitive proxy statement for the 2003 annual meeting of stockholders to be held on June 4, 2003, to be filed within 120 days after the end of the registrant’s fiscal year, are incorporated by reference into Part III, Items 10-13 of this Form 10-K.

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SAVVIS COMMUNICATIONS CORPORATION

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PART I

ITEM 1.    BUSINESS.

Cautionary Statement

Some of the statements contained in this Form 10-K discuss future expectations, contain projections of results of operations or financial condition or state other forward-looking information. Any statements in this report that are not statements of historical facts, are intended to be, and are, “forward-looking statements” under the safe harbor provided by the Private Securities Litigation Reform Act of 1995. These statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual events to differ materially from those contemplated by the statements. The forward-looking information is based on various factors and was derived using numerous assumptions. In some cases, you can identify these so-called “forward-looking statements” by our use of words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “intend” or “potential” or the negative of those words and other comparable words. You should be aware that those statements only reflect our predictions. Actual events or results may differ substantially. Important factors that could cause actual events or results to be materially different from the forward-looking statements include those discussed under the heading “Business—Risk Factors” and throughout this Form 10-K. Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, we can give no assurance that we will attain these expectations or that any deviations will not be material. Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this annual report on Form 10-K and the information incorporated by reference in this report to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

The terms “SAVVIS,” “we,” “us,” “the Company,” and “our” as used in this report refer to SAVVIS Communications Corporation, a Delaware corporation, formerly SAVVIS Holdings Corporation, and its subsidiaries, except where by the context it is clear that such terms mean only SAVVIS Communications Corporation.

OVERVIEW

SAVVIS is a global managed service provider, delivering Internet Protocol (“IP”) applications for a diverse mix of business customers. SAVVIS offers its customers the latest technology at an affordable price because its network and hosting infrastructure was built from the ground up to support real-time IP applications worldwide.

SAVVIS’ services are briefly described below:

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HISTORY

SAVVIS Communications is the result of a combination of two companies with distinct competencies: one that sold high-performance Internet services and the other that pioneered Private IP and hosting services for financial services institutions worldwide.

The Internet company began commercial operations in 1996, offering Internet access services to local and regional Internet service providers. We pioneered the use of Private Network Access Points (“PrivateNAPs^SM”), where SAVVIS exchanges data through dynamic “on net” connections with the other major Internet network providers. PrivateNAPs^SM dramatically minimize latency and packet loss by bypassing the PublicNAPs, which are the bottlenecks of the Internet.

Bridge Information Systems, Inc. (“Bridge”), a global provider of real-time/historical financial information as well as news about stocks, bonds, foreign exchange and commodities, acquired the Internet company in April 1999. Bridge had constructed a highly redundant, fault tolerant network based on IP and ATM (asynchronous transfer mode) technologies to provide its services to some of the largest financial companies and institutional investors in the world.

In September 1999, the two networks were combined: the original Internet network, which was constructed to provide high quality Internet access in the United States, and the IP network of Bridge, which had been constructed to meet the exacting requirements of the financial services industry worldwide. Both of these networks have been operational since 1996, and we refer to the combined network as the “SAVVIS Intelligent IP Network^SM.”

On February 18, 2000 simultaneously with the completion of our initial public offering, SAVVIS acquired the IP network assets of Bridge, for total consideration of approximately $150 million, and the employees of Bridge who operated that network were transferred to us.

We currently provide IP VPNs, hosting services and Internet access to approximately 1,900 customers. Each of these services is described below:

SAVVIS Communications Corporation was incorporated in Delaware in 1998.

Network-based IP VPNs

Three months after our IPO, SAVVIS enhanced its IP VPN offerings by introducing network-based IP VPN services across our entire global platform. SAVVIS was the first global network service provider to provide IP VPNs that were network-based, i.e., the “intelligence” needed to make networking decisions resides inside our network, rather than residing inside complex hardware at the customer’s premises. In-Stat/MDR, an Industry Analyst firm, predicts that U.S. revenues of network-based VPNs will grow twice as fast as customer premise equipment (“CPE”)-based VPNs, reaching $4 billion in 2006. We currently have 475 customers and approximately $194 million in revenue in this category.

The SAVVIS Intelligent IP Network^SM architecture, which connects customers in 107 of the world’s major commercial cities in 45 countries, is based on the unique marriage of two technologies:

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We believe that the widely predicted growth in Internet-based IP VPNs was not attained because of the inherent unpredictable performance of the Internet, which SAVVIS’ unique architecture solves. SAVVIS’ Intelligent IP Networking^SM combines the security, reliability and performance of private networking with the affordability and flexibility of the Internet.

SAVVIS’ Intelligent IP Networking^SM platform has four other significant distinctions:

All of this capability is provided with simplified pricing, modeled after the price structure of the Internet, i.e. one price per site. Furthermore, the customer does not need technical staff at each location, which provides further cost saving benefits. Unburdened by complex information technology (“IT”) requirements, businesses can focus on their core competencies.

We charge each customer an initial installation fee that typically ranges from $500 to $3,000 and a monthly fixed fee that varies depending on the services provided, the bandwidth used, and the QoS level chosen. Our customer agreements are typically for 12 to 36 months.

Our revenue is derived primarily from the sale of IP VPN services. Our two largest customers, Reuters plc (“Reuters”) and Moneyline Telerate represent approximately 73% of our revenues. Reuters and Moneyline Telerate acquired substantially all of the operating assets of Bridge in September and October 2001, respectively. Reuters and Moneyline Telerate have each entered into network service agreements with us, which expire in October 2006 and October 2009, respectively.

Managed Hosting

SAVVIS’ Intelligent Hosting^SM services have been developed from the ground up to meet the demanding needs of the financial services sector. Our proprietary systems were created to remotely manage more than 20,000 servers for this demanding industry. With this foundation, SAVVIS has assisted enterprises of all types and sizes in the launch of new services and applications. International Data Corporation (“IDC”) forecasts the United States (U.S.) managed hosting will grow from $5.1 billion in 2002 to $10.4 billion in 2007, a 15% combined annual growth rate.

SAVVIS believes that there are four key characteristics that drive businesses’ decision-making for hosting: data center availability and high-performance Internet connectivity; experience of the hosting provider; the level of support provided; and the customer’s ability to monitor performance at the site.

Data Center Availability & Connectivity:    SAVVIS operates data center facilities around the globe, with the highest levels of security, redundancy, availability and on-site support. For instance, in the St. Louis data center, walls are constructed with reinforced concrete four-feet thick; tanks hold 20,000 gallons of diesel fuel to provide redundancy in the event of power outages; and the Center is built to withstand an earthquake of 7.5 on the Richter scale. The company has data centers in St. Louis, Santa Clara, San Francisco, London, Tokyo, Singapore, Northern Virginia and New York.

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Experience:    SAVVIS has years of experience supporting mission-critical systems for high profile clients in the financial industry. Currently, SAVVIS manages more than 7,500 servers around the globe. Acting as the customer’s de-facto computer operations department, we manage the total application infrastructure. SAVVIS has the unique experience of providing both managed hosting and managed network services and, as a result, can combine the two in order to provide customers with the option to connect users through Intranets, Extranets or a top-performing Internet backbone.

Support:    SAVVIS provides an extensive monitoring service that allows for constant health reports. Events are proactively recognized and repaired, virtually alleviating any performance issue before it happens. Many functions of setting thresholds and sending alerts are done locally, triggering an automated script or process at the time of event detection, allowing for self-repair in many cases.

All actions, whether self-healing or not, are monitored and directly alerted to the SAVVIS Network Operations Center where any problems are reacted to and acknowledged in a swift and effective manner by a team of highly trained, highly experienced personnel. In most cases, SAVVIS recognizes a problem before it has an impact to a customer’s service.

Integrated Site Monitoring and Reporting:    Customers gain full visibility into their hosted environment through the SAVVIS Customer Command Center, which is a secure information portal that allows customers remote access to statistics and information regarding the performance of their site. The Customer Command Center is unique because it integrates hosting and network statistics.

In addition to managed hosting services, SAVVIS also provides colocation at its Private Network Access Point (PrivateNAP^SM) locations for companies that want direct access to the top ranked Internet backbone, but prefer to manage their own hosting environments.

Internet Access

SAVVIS offers a wide range of Internet access options designed to meet the needs of businesses of all sizes. From its inception in 1995 as a national Internet service provider, SAVVIS designed its global network infrastructure to deliver the superior performance, reliability and security demanded by companies for whom data transmission is critical to success. SAVVIS’ backbone has been consistently rated high (#1 in previous years 1999 and 2000) by Keynote Systems in Boardwatch magazine, and the network was declared “perfect” for reliability in Network World Magazine’s study of ISP backbone performance in 2002.

SAVVIS pioneered the use of strategically located Private Network Access Points (PrivateNAPs^SM) to provide businesses with the most direct route on the Internet. Today, SAVVIS has 10 PrivateNAPs on our network, including international locations in London, Sao Paulo, and Singapore.

SAVVIS has also deployed 133 Points of Presence (POPs), and the global network currently reaches 107 cities in 45 countries. POPs bring the edge of the network closer to customers and provide cost-effective geographic outreach. Customer traffic is then routed through a PrivateNAP^SM, directly connecting to the ultimate Internet destination over 95% of the time. In contrast, most competitive ISPs must traverse multiple PublicNAPs to reach the desired location. These publicNAPs are where most of the bottlenecks of the Internet occur.

SAVVIS offers both fully managed Internet solutions as well as Internet access. With managed solutions, we provide all of the equipment, installation and technical support to manage the circuit and CPE. We also provide other in-network services such as firewalling, without the enterprise having to incur the expense of buying or managing security equipment. These solutions provide the flexibility that growing companies need, as they can add new Internet applications or increase their bandwidth virtually instantaneously.

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MARKET OVERVIEW

Market opportunity.    As the telecommunications industry continues to experience turmoil, there continues to be growth and new market opportunities; internationally and with IP converged offerings. SAVVIS offers services in one of the fastest growing sectors of telecommunications: the IP services sector. A recent Yankee Group report states that the IP VPN services market was “totally up for grabs” with no one provider or carrier dominating. We believe that the real opportunity comes from SAVVIS’ ability to marry managed hosting and managed private networking, giving us a market advantage. Outsourcing is favored by about 35 percent of Global 2000 companies but is expected to become the norm among 60 percent of those companies by 2004, according to the Aberdeen Group. As more enterprises look to outsource their network and hosting solutions, they will also look to maximize their purchasing power by looking for “one-stop” shops that offer both solutions.

IP VPNs.    The majority of business data communications today take place over private or managed corporate data networks. IDC forecasts U.S. IP VPN services revenue to reach $14.7 billion in 2006, which is an annual growth of 22%. Network-based IP VPNs, which Savvis offers, is forecasted to grow 46% each year. More companies are looking to provide communication between their employees, partners and customers over the same connection that also provides data, voice and video services. This convergence is best done using IP technology because of its scalability, security and ubiquity. SAVVIS’ Intelligent Network platform was designed to provide these services at an affordable price.

Hosting.    We believe SAVVIS is poised to play a significant role in a hosting market that is rapidly consolidating. IDC, projects the hosting sector to grow to over $10 billion by 2007 from its current projection of $5.6 billion in 2003.

Internet.    Internet access has become a strategic component necessary for a company’s success, regardless of their industry focus. Access services include dial-up access for mobile workers and small businesses, and high-speed dedicated access used primarily by mid-sized and larger organizations. Use of Internet services continues to increase as evidenced by IDC’s estimate that Internet service providers’ corporate access revenues will grow to $15 billion by 2006, an 8% compound annual growth rate.

Convergence between the Internet and corporate data networking.    Companies are looking to have a single local loop connection that links everyone to their network and centralized database. This means the network has to perform much better than was previously accepted. This network connection needs to be able to separate out different applications and guarantee each its appropriate bandwidth and quality. SAVVIS’ network was designed inherently to share the local loop and to transport mission-critical data with extreme reliability. Application-aware QoS, which assigns priority based on the customers’ needs, and industry leading end-to-end service level agreements (SLAs) are two ways SAVVIS ensures the highest quality is delivered to its customers. By converging multiple applications onto one network and local loop, it’s possible to save up to 70% in monthly network costs.

Rapid growth in e-commerce.    In an effort to lower the overall costs associated with managing massive supply chains and customer bases, enterprises are looking at e-commerce solutions. A recent Gartner report stated that e-commerce growth will be driven by the demand from the following industries: manufacturing, retail, government and healthcare because they have some of the largest supply chains in the world. Corporations continue to use e-commerce solutions to generate new revenues, increase efficiency through improved communications with suppliers and other third parties, and improve internal communications. Savvis’ services are well suited to serve this emerging market.

Outsourcing of IP based services.    In order to capitalize fully on the new opportunities presented by IP applications, businesses will require high quality, reliable and flexible data communications and infrastructure services capable of supporting mission-critical applications. We believe that an increasing number of businesses will seek to outsource these services to third-party providers for several reasons. First, companies need network and hosting services that are ubiquitous, scalable, and secure. Second, they can take advantage of new technologies without reconstructing their network or hosting solutions. Finally, they are finding that outsourcing provides compelling return on investment (“ROI”) versus more traditional solutions that require a significant up-front investment. Companies are choosing to preserve their capital to invest in activities that are integral to their business strategy and are outsourcing services rather than investing in networks, systems and equipment.

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BUSINESS STRATEGY

SAVVIS’ objective is to tap the rapidly growing market for reliable, high-speed IP VPNs, managed hosting and Internet services. Specifically, we intend to:

Establish SAVVIS as a leading provider of public and private IP transport solutions for business-to-business communications. We intend to market a combination of our Intelligent IP Networking^SM services, Intelligent Hosting^SM and Internet services to meet the demand in the market. We see customers demanding a combination of Internet, extranet and intranet networking services and believe our Intelligent IP Networking^SM platform and Private NAP^SM architecture sets us apart from the competition in meeting the demand.

Capitalize on the demand for outsourced services in the VPN, managed hosting and Internet markets.    Data communications and the Internet are mission-critical to thousands of businesses worldwide and, according to industry studies, the market for these services continues to grow rapidly. Corporations are expanding and enhancing existing networks and deploying new services in response to this growth. We are focused on the demand for simple, flexible solutions, and our market-leading IP VPN products and managed hosting services allow us to address untapped segments of the business market.

Capitalize on our connectivity to financial institutions worldwide.    We are aggressively marketing our services to the traditional and emerging financial services companies, based on our connectivity to over 4,700 companies. In today’s rapidly deregulating financial market, financial institutions must be fast-to-market with innovative delivery methodologies that speed transactions or they risk obsolescence. We believe that we are well positioned to meet the need, because our community-of-interest network, Financial Xchange^SM, provides the performance and security of a private network with the reach and rapid deployment of the Internet.

Provide the Application Infrastructure Platform to meet customers’ hosting requirements, while leveraging our IP transport solutions. Many customers are establishing new or more robust Internet, extranet and intranet applications and want their service provider to provide the application infrastructure platform for their servers, their operating system, and their software. SAVVIS is focused on providing full management of the customers’ application platform, hosted in our state-of-the-art data centers in St. Louis, San Francisco, Santa Clara, Northern Virginia , London, Tokyo and Singapore. In addition, we intend to provide both private and public IP transport to the customers’ hosted site.

Grow domestic and international distribution channels.    We intend to grow our distribution channels aggressively, by expanding our direct channel, as well as utilizing alternate channels. We intend to continue to increase the size of our direct sales force for VPN, Internet and managed hosting services. We have entered into agreements with multiple partners to resell our services and intend to continue to sign up additional partners in 2003.

Leverage our network and PrivateNAP^SM infrastructure which include industry-leading “intelligence” built into our platform. We have completed a major build out of our global network, which reaches 107 cities in 45 countries, and 133 POPs on the SAVVIS Intelligent IP Network^SM . With the industry’s first European PrivateNAP^SM in London, for a total of 10 currently in operation, SAVVIS also has international PrivateNAPs^SM in Singapore and São Paolo.

SAVVIS SERVICES

The SAVVIS Intelligent IP Network^SM is designed to offer a guaranteed high level of performance for both Internet and data networking services. We deliver a comprehensive range of high performance, QoS-differentiated products, including data networking, Internet access, intranets, extranets, e-business hosting and other services.

Customers can have the required level of reliability for each application while also receiving 100% of the bandwidth they purchased, something that no other carrier provides.

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INTEGRATED NETWORK SOLUTIONS

We put IP “intelligence” into our network and extended the benefits all the way to the customer’s premises. This enables us to deliver functionality, security and performance to our customers, and enables our customers to customize our products according to their needs. Our customers need only to tell us whom they want to talk to, which of five Quality of Service (QoS) levels is appropriate for each application, and how much bandwidth they require. SAVVIS then provides them with a bundled solution that delivers the security, flexibility and affordability they need.

Many companies have to work with various service providers, forcing them to spend lots of time and money patching together different network configurations to address each of their multifaceted needs. But with the IP Intelligence in our network, SAVVIS is able to integrate numerous networking strategies — Internet, intranet, extranet and e-business hosting — into one simplified and affordable solution over one local loop. Customers can take advantage of a full continuum of solutions, without having to manage CPE for routing or firewalling. Our customers can prioritize their applications and select the QoS level, from e-mail to video streaming that meets their requirements. Additionally, they can hook up to the Internet or roll out complex extranet applications, with a fully integrated networking solution from SAVVIS.

Extranet Solutions.    Much of business success depends on being able to exchange information and communicate with suppliers, partners and customers. SAVVIS’ Intelligent IP Network^SM platform enables our customers to choose between having their own private extranet or combining a private extranet with Internet access to off-net locations. Our customers can communicate and conduct transactions with multiple partners in a secure and managed environment, without having to spend lots of time and money deploying expensive premises-based security. With a SAVVIS extranet, they can take advantage of our networking capabilities, define who gets access to their community of users, and determine their own set of rules. We offer a broad range of ATM-based QoS levels and advanced network-based IP features, with security policies defined by the customer. The customer is in control, secure in the knowledge that their extranet application is running on the SAVVIS Intelligent IP Network^SM.

Intranet Solutions.    Intranet communications are confidential, highly proprietary information that need to be protected from competitors. Businesses need to maintain tightly controlled user rights and privileges. Until now, however, businesses only had one choice: spend money on expensive, inflexible traditional private networks, based on either frame relay or private lines. Today they have new choices. Now enterprises can get intranet solutions that combine the security and performance of private networking with the flexibility and economy of the Internet. Once again, SAVVIS makes everything easy. Customers just need to define whom they want to connect to, choose one of four different QoS levels, and determine their bandwidth requirements. They won’t have to waste money or resources deploying routers and firewall devices at each office location. SAVVIS packages everything into one simple, flexible bundled solution. In addition, customers can use the excess bandwidth of their local loop for extranet or Internet access.

Internet Solutions.    SAVVIS built its global Intelligent IP Network^SM for high performance and reliability. Customer data speeds through a controlled, performance-guaranteed environment that completely bypasses the congested public Internet exchange points. Through our PrivateNAPs^SM, their data is directly connected, giving them the most direct route on the Internet and instantaneous access to the world. SAVVIS offers a wide range of Internet access options, including DS1, DS3, OC3 and Ethernet. Our customers are able to add new services easily or change existing applications by using the excess bandwidth of their existing access circuit to add or change applications virtually instantaneously.

Managed Hosting Services

Regardless of whether a business is deploying a Web site, an extranet or an intranet, SAVVIS can help create hosting and networking solutions that will grow with them. If a business needs to establish a presence on the Internet quickly, provide a high level of system availability and ensure that their customers and users have a positive experience, SAVVIS Intelligent Hosting^SM is the answer. Intelligent Hosting^SM includes the full management of customer hardware, operating systems, and servers within a secure, reliable data center environment. Traffic is distributed over our highly rated Internet backbone or over a private network solution developed to meet the customer’s intranet or extranet requirements.

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Based on the business needs, a customer can choose other value-added options including database management, load balancing, security services, back-up and recovery solutions, WebTrends(TM) reporting and managed storage services (including business continuance and managed testing environment). Our fully managed Intelligent Hosting^SM solutions eliminate the need for customers to monitor and manage hardware and operations, stay abreast of the latest software upgrades and patches, or hire and train the personnel necessary to do the job.

By selecting SAVVIS hosting services, enterprises are able to reduce capital expenditures for expensive networking equipment, eliminate the expense of supporting their servers and avoid having to spend time and money on building a secure data center facility. Our customers get direct connectivity to the SAVVIS network — giving them reliability, availability and security — with no local loop charges, and no router or hub charges. We allow our customers to lease the hosting equipment, which helps to further reduce their capital costs and be able to scale for future business growth.

ACCESS ALTERNATIVES

SAVVIS offers a wide range of scalable Internet access methods ranging from fractional DS-1 through OC-3, and SAVVIS also supports Ethernet access. Whether a customer is using the Internet to conduct business communications or e-commerce, they will get Internet access that is of “mission critical” caliber with SAVVIS. Down the road, if they decide they also need an intranet or extranet, they will not need to design a whole new network. SAVVIS enables its customers to use the excess bandwidth of their existing access circuit to add or change applications virtually instantaneously.

SALES AND MARKETING

We contact potential new customers through our direct sales force and our lead referral program. Our direct salespeople, together with our sales engineers, develop sales proposals for potential new customers.

Direct Sales.    Our direct sales force utilizes a “solution selling” approach, qualifying the customer’s IP networking and hosting requirements. We then bring in product and engineering experts to design the final solution for the customer. Under this approach, we are able to manage the relationship effectively with the customer while utilizing more specialized resources to ensure that the right solution is proposed and implemented. All sales representatives take part in an extensive training program designed to develop in-depth technical expertise so they can better understand customers’ complex networking needs and develop customized solutions. In addition, they participate in “solution selling” training to teach them the best techniques to qualify and sell the SAVVIS product line. We employ approximately 130 people in the U.S. Europe, Asia and Latin America.

Lead Referrals.    We believe additional content providers will be interested in establishing lead referral programs. We seek to enter into relationships with content providers to enable them to deliver their services in a real-time, high quality manner and provide an incremental revenue opportunity through a lead referral commission

Alternate Channels.    In addition to relationships with content providers, we are developing new distribution arrangements with small to large partners. To help these companies compete in today’s changing market, our alternate channels strategy provides companies with network infrastructure, sales and technical support, and value-added data services. Our partners have web access to our lead referral program, free marketing materials and collateral, and an exclusive incentive promotion. Our channel partners will benefit by generating additional revenues, providing a more complete service bundle and reducing customer churn. We have identified distribution opportunities with Internet service providers, competitive local exchange carriers, and other communications and Internet-related companies in the United States, Europe, Asia and Latin America.

Client Solutions.    Our client solutions team is responsible for customer relationship management. The team alerts customers when their bandwidth utilization approaches capacity and advises customers on methods to improve the performance and the security of their network using additional SAVVIS services. This team is also able to cross-sell additional services to existing customers, such as advising on VPN and managed hosting solutions.

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Marketing.    Our marketing programs are designed to build national and global awareness of the SAVVIS brand name and its association with high performance, high quality IP VPN, managed hosting, and Internet services. We use brand awareness and direct marketing programs to generate leads, accelerate the sales process, retain existing customers and promote new products to existing customers. Our print advertisements are placed in trade journals, newspapers and special-interest publications. We participate in industry tradeshows, and also use direct mail, e-newsletters, surveys, telemarketing, Internet marketing, on-line and on-site seminars, collateral materials, welcome kits and direct response programs to communicate with existing customers and to reach potential new customers. Our marketing programs are targeted at information technology executives, as well as senior marketing and finance managers. We closely track the impact and effectiveness of our primary marketing programs.

Sales Force Automation.    We use our proprietary sales force automation system to manage all pre-sales communications with our prospective customers. All distribution and tracking of sales leads occur through this system. Sales leads are imported from data sources such as corporate web sites, telemarketing, direct mail and national advertising campaigns, and assigned regionally to the desktops of the appropriate sales representatives. All contact with these prospects is documented in the sales force automation system through every step of the sales cycle, from initial contact to contract receipt. In addition, this system allows sales management to monitor the sales activity of their specific sales representatives and generate sales forecasts based on that activity. Further, our sales force automation system tracks all marketing communications with the prospective customers, allowing us to measure the effectiveness of various collateral materials and marketing campaigns in an effort to optimize our marketing dollars. Lastly, our sales people use our sales force automation system to track and manage their personal sales prospects and to send customized packages of sales literature, brochures and faxes directly from their computer desktops, thereby improving sales efficiency.

CUSTOMERS

We currently provide services to approximately 1,900 customers. In September and October 2001, we entered into five year agreements with Reuters and MoneyLine Telerate which replaced the monthly revenue from the Bridge Information Services network services agreement. The Moneyline agreement was extended in October 2002 for an additional three years, expiring in September 2009. Bridge, which was our largest customer through the fall of 2001, represented approximately 81% and 58% of our 2000 and 2001 revenues, respectively. Reuters (12% and 43% of total revenue in 2001 and 2002, respectively) and MoneyLine Telerate (6% and 30% in 2001 and 2002, respectively) represented approximately 18% and 73% in 2001 and 2002, respectively. No other individual customer accounted for more than 5% of our revenues during the year ended December 31, 2002. We also provide services to many financial service companies and a diverse group of enterprises in legal, retail, media, healthcare and professional services.

Our contracts with our customers are typically for one to three years in length. Many of our customer contracts contain service level agreements that provide for service credits should we fail to maintain specified levels of quality.

CUSTOMER SERVICE

Our goal is to provide the highest level of customer service in the industry. We believe that high quality customer service is critical to attracting and retaining customers and to satisfying the rapidly growing data networking, hosting and Internet services needs of these customers. Our comprehensive approach to customer service and satisfaction includes a focus on:

We believe our network architecture, proprietary routing policies and industry leading service level agreements provide our customers with very high service quality. We are able to offer our customers different levels of service priority for their different data transmission needs over one high-quality network. For example, e-commerce and real-time applications, such as market data delivery, voice service and video conferencing can be assigned higher quality of service levels, while other applications, such as e-mail, can be assigned a lower priority of service. By assigning the highest level of service only to mission-critical or real-time applications, customers can lower their overall data services costs without compromising their data networking requirements.

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Customer Call Centers.    Customer support personnel located in call centers in St. Louis, Missouri (24 hours a day, 365 days a year), London, England and Singapore handle service inquiries from our customers from a single, uniform customer database. These personnel are organized in client teams and are highly trained to identify and resolve customer issues rapidly and completely. To track trouble tickets and customer information, we use a proprietary management platform based on Vantive enterprise software, a highly scaleable platform for problem tracking and customer record access and maintenance that is easily accessible by personnel at all of our network operations centers. We use an integrated client/circuit information database that allows our customer support personnel to quickly access a customer’s profile from any of our support centers. In our local markets, we have outsourced field technical services with firms who are experts in Internet protocol, Unix, NT and ISDN technology and who are generally able to respond to customer requests within two hours.

Management, Monitoring and Maintenance.    We provide our customers with detailed monitoring, reporting and management tools that allow them to review their usage patterns, network availability, outage events, latency and data loss. These tools allow our customers to evaluate the performance of our service against our service level guarantee as well as review utilization and performance data to facilitate their network planning and design activities.

Service Level Agreements.    The consistent, reliable performance of the SAVVIS Intelligent IP Network^SM enables us to provide effective service level agreements to our customers. We believe that companies unable to support a commensurate level of predictable network performance will not be able to provide competitive service level agreements with value to the customer or will do so at substantial risk to their own business.

SAVVIS INTELLIGENT IP NETWORK^SM INFRASTRUCTURE

OVERVIEW

The SAVVIS Intelligent IP Network^SM reaches 45 countries, with facilities in 107 major cities, including 60 international cities and 47 U.S. cities. Our network is based on ATM, frame relay and Internet Protocol (IP) technologies. In addition, our network incorporates 15 PrivateNAPs^SM, which allows our Internet traffic to bypass the congested public Internet access points.

We have designed our network to enable us to offer our customers a range of quality service levels with multiple levels of redundancy and transport speeds. Our network is designed with:

Open System Architectures.    Our network is based on Asynchronous Transfer Mode (ATM), frame relay and Internet Protocol technologies. These are open systems networking protocols that are in widespread use in data communications. Internet Protocol is the most commonly used and fastest growing networking protocol in the world. By carrying Internet protocol on our network, we generally allow our customers to connect to their customers, suppliers and remote offices using equipment already installed in their networks and the networks to which they connect. Additionally, by using ATM and frame relay in our network, we enhance network utilization and quality of service, and we are able to easily communicate with third party networks for the delivery of traffic on and off our network without procuring special interface technologies or devices.

Quality of Service Differentiation.    Our network architecture allows us to offer and guarantee different levels of service priority for customers’ different data transmission needs. For example, e-commerce and real-time applications, such as voice, can be assigned the highest level of priority, while other applications, such as e-mail, can be assigned a lower priority of service. By offering a quality of service differentiated product, we enable customers to select a price/performance combination that is appropriate for their needs. In addition, our network gives our customers the capability to run multiple applications, such as Internet access, intranet and private voice, over the same equipment and local access, thereby saving on local network transport and equipment costs.

High Reliability.    We utilize redundant circuits, switches and physical locations to substantially reduce the effects of a single point of failure within our network. This redundancy, combined with our switching and routing equipment, generally enables us to automatically reroute traffic when a failure occurs, resulting in higher overall network performance and integrity. Our backbone switches also incorporate high levels of equipment-specific redundancies, resulting in higher levels of availability than those found in traditional routing platforms. We also employ uninterruptable power supplies and/or electric generator back-ups at each switching facility, designed to mitigate the impact of local power outages on our service performance.

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Global Network Components

The components of our network include the following:

Switching Facilities.    There are over 250 Lucent ATM and frame relay switches, providing a highly redundant switch backbone deployed throughout the global SAVVIS Intelligent IP Network^SM. We have over 200 backbone routers installed and there are over 12,000 customer premise equipment devices located in office buildings and at customer sites. Our switches are located in secure facilities, which provide highly reliable, direct access to high-speed telecommunications infrastructure. In each switching facility, we rent space, install networking equipment, including ATM and/or frame relay switches, routers and high-speed analog and digital modems.

Backbone Capacity.    Our network is designed with a highly redundant backbone infrastructure, including diversely routed long haul and local access connections from multiple carriers. We interconnect our switching facilities through high speed lines leased from a variety of carriers, including Level 3 Communications LLC (“Level 3”), AT&T, Corp. (“AT&T”), Sprint, MCI WorldCom, Inc. and Broadwing, Inc. Our leased line connections range in capacity from 45 Mbps through 620 Mbps in the U.S. and up to 155 Mbps internationally. This backbone network has generally been established in a ring architecture so that at least two diverse paths exist between our switching facilities. The “fault tolerant” configuration of our network allows data packets to travel on two or more alternate paths between different points on our network.

Network-based VPN Infrastructure.    Within our network, we have deployed over 50 Nortel Shasta routers to support our network-based Virtual Private Network (VPN) service. This service is used to provide connectivity between customer sites in private networks that range from two to several thousand sites. The routing intelligence used to route data packets from source site to destination site resides in our network, thus simplifying the complexity of the equipment needed at the customer premise. In addition, customers do not need to get involved in complex “traffic engineering” exercises, where site-to-site connectivity paths and bandwidth requirements are determined, as our network-based VPN service model transparently solves these problems for our customers.

PrivateNAPs^SM.    For our customers’ Internet traffic, we have built private network access points, or PrivateNAPs^SM, where we generally connect to other Internet backbones through a combination of paid Internet transiting connections and/or settlement free peering connections. For transiting connectivity, we incorporate connections to Sprint Corporation and UUNET, an affiliate of MCI WorldCom, within the United States, and MCI WorldCom, Cable & Wireless, plc, Starhub, Stix and Metrored internationally. These transiting connections allow us to connect to the transiting provider’s Internet network, along with the rest of the Internet for a monthly fee. Since we are a paying customer of each of these Internet backbone providers, we believe we realize better response times, installation intervals, service levels and routing flexibility than Internet service providers that rely solely on free public or private peering arrangements. Our settlement free peering connections enhance our connectivity to the rest of the Internet by providing direct connections to other large Internet backbones. Over these connections, we and our peering partners agree to carry one another’s Internet traffic free of charge for all sites directly connected to our respective networks. We currently have peering arrangements in place with a number of companies, including America Online, Inc., Abovenet, Bell Nexxia, Global Crossing, Level 3 Communications, LLC, Inc., MSN and PSInet (Cogent). These peering arrangements allow for settlement-free, direct connections between networks, where local access charges are generally split evenly between the applicable parties. Smaller Internet service providers typically connect to our network through transit agreements that allow them to connect to our network for a fee. We currently operate 12 PrivateNAPs^SM in the U.S., one in London, one in Sao Paulo, Brazil, and one in Singapore.

Our PrivateNAP^SM architecture combined with our proprietary routing policies enables us to route customer traffic directly onto the Internet backbone of its destination for a substantial portion of global Internet addresses. This network architecture allows our customers’ Internet traffic to generally bypass congested public Internet network access points, thereby reducing data loss and latency and improving reliability and performance.

Managed Hosting.    We have data center facilities located in St. Louis, San Francisco, Santa Clara, New York, Northern Virginia, London, Tokyo and Singapore. All of these facilities are served by high speed connections for local access. These facilities are built to state-of-the-art levels with high availability, mission-critical environments, including uninterruptable power supplies, back-up generators, fire suppression, separate cooling zones and seismically braced racks. These facilities are accessible 24 hours a day, 365 days a year, both locally and remotely, and have high levels of physical security.

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SAVVIS Operations Centers

Our global network operations center located in St. Louis, Missouri, operates 24 hours a day, 365 days a year, and is staffed by our skilled technicians. We also have regional network operations centers in London and Singapore. These regional centers operate for ensuring backup for the St. Louis facility. From these SAVVIS operations centers, we remotely monitor the components of the SAVVIS Intelligent IP Network^SM, including our PrivateNAPs^SM, and perform network diagnostics and equipment surveillance. The SAVVIS operations centers use sophisticated, proprietary network management platforms based on the Lucent NavisCore, HP OpenView, and Nortel Optivity programs to monitor and manage our switching facilities and our routers. Unlike most of our competitors, our entire global network is managed by a single network management system for all SAVVIS products. This makes our customer service uniform worldwide, and makes rolling out new products far easier than having to deal with the myriad of legacy systems with which our competitors often have to contend.

TECHNOLOGY OVERVIEW

Private networks. Private networks typically comprise a number of private, leased lines that interconnect multiple corporate locations. The advantages of private lines include quality, since capacity is reserved for the exclusive use of the network owner,

and security, since the owner’s data transmissions are not commingled with those of other customers. Private line networks have been most popular in the U.S., where capacity prices are lowest. While private lines are typically secure and reliable, they do not use network capacity efficiently and are not flexible or scaleable as changes in network topology are implemented.

Shared networks.    Until recently, prices for long-haul telecommunications capacity outside of the U.S., particularly international capacity, were relatively expensive. Since the advent of data networking, only users with extremely high capacity requirements invested in private networks in these locations. Most other users employed shared networking technologies, whereby multiple corporate locations would be interconnected with the data network of a major telecommunications carrier or value-added network service provider for carriage to the appropriate destination. X.25 was an early open shared network protocol that was designed to support mission-critical communications over analog networks. Historically, X.25 has been extremely popular outside of the U.S., where private line networks have remained expensive, and in developing markets, where the telecommunications infrastructure is sometimes unreliable. X.25 contemplates extensive error detection and data recovery processes, which slows the effective rate of transmission.

Today, ATM, frame relay and Internet Protocol are driving the migration of traffic from private line networks to shared networks and from older open protocols such as X.25 to newer architectures.

Frame Relay.    Frame relay evolved from X.25 networks and today is widely used for applications such as local area network-to-local area network communications. Unlike X.25, frame relay does not perform any complex error detection or error recovery of data. As a result, it is a simpler and faster technology. Frame relay circuits are effective to create a network of interconnected sites because each site needs only one physical link into the frame relay network to communicate with all other sites. Over this physical link, separate virtual circuits are defined to the remote endpoints to which each site needs to directly interconnect. Frame relay is less costly than point-to-point private networks, and its software-defined “virtual circuits” make it easier to alter network topology as connectivity requirements change. One limitation of the frame relay protocol is its application for real-time services. Frame relay packets are variable in length, and as large data files transit the network they can cause delays at key aggregation and switching points, often causing other traffic to be delayed. These delays can materially degrade the quality of real-time services such as voice and video. A second limitation of frame relay is the inherent difficulty in scaling out a network that requires separate virtual circuits for each remote endpoint. Small networks are relatively straightforward to build in this fashion, but larger networks create problems in determining which sites need to directly interconnect and in determining the appropriate network resources (such as bandwidth) to reserved for each virtual circuit.

ATM.    The ATM protocol was specifically designed to support the transmission of all types of content, including data, video and voice, over a single network. ATM generally has the ability to prioritize cells to ensure that real-time data takes priority over less time-sensitive material when transiting the network. This enables service providers to offer service guarantees with a greater degree of confidence and facilitates the introduction of real-time services that are difficult under other protocols.

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Additionally, ATM data cells are small and fixed in size, facilitating high-speed line transport at speeds up to 10 billion bits per second. One limitation of ATM is that the benefits created by the small, fixed nature of ATM cells also create incremental traffic on the network. Each cell requires its own identification and addressing information, which is repeated in each of many individual ATM cells that comprise a given data transmission. The replication of this “header” information generates additional overhead for the network, requiring the network operator to provision additional transmission capacity. Finally, since ATM is connection based (using virtual circuits between sites, much like frame relay), the same scaling problems associated with frame relay apply to ATM.

Internet Protocol.    Internet Protocol is a simple, highly scaleable protocol that is a core element of the architecture of the Internet and can be used across most network technologies in use today. Internet Protocol has also become the communications protocol of choice for the desktop and the local area network, thus data networking over Internet Protocol requires no protocol conversion, reducing overhead and improving performance. The protocol does not distinguish among classes of traffic, which limits its ability to deliver real-time services.

Our Network.    We have built the SAVVIS Intelligent IP Network^SM to take advantage of the rapid growth of Internet Protocol in corporate networks, to offer customers the ability to run multiple applications on a single network and to allow customers to choose the quality of service level which best meets their needs. By building our network to run Internet Protocol over ATM, we allow our customers to overcome the limitations of Internet Protocol and designate the level of priority to be accorded to their traffic. Furthermore, our network-based VPN service provides our customers with a simpler and more flexible interconnection model for private networking service. By locating the routing intelligence inside the network, we are able to simplify the networking model presented to the customer by making transparent the details of routing and traffic engineering.

COMPETITION

The telecommunications industry underwent dramatic changes in 2002. Some of SAVVIS’ most formidable competitors filed for bankruptcy, and others ceased operations in some markets; for them, consolidation and restructuring will continue to be a primary focus for 2003. Some of our other primary competitors will continue to have greater financial, technical and marketing resources, larger customer bases, greater name recognition and more established relationships in the industries that we operate in than we do.

We believe that a highly reliable network infrastructure, a broad range of quality products and services, a knowledgeable sales force and quality customer support are the primary competitive factors in our targeted markets and that price is generally secondary to these factors. We believe that we presently are well positioned to compete favorably with respect to most of these factors. Our current and potential competitors in our targeted markets include:

VPN and Data Networking Companies.    While global competitors such as Cable & Wireless, Concert, Global One and Global Crossing have become less of a competitive threat because of financial woes, SAVVIS continues to face global competition from data networking companies such as Equant N.V. and Infonet Services Corporation. In addition, many competitors in the U.S. offer traditional data communications services, such as AT&T, Sprint, and Qwest, as well as WorldCom and Level 3. While WorldCom filed for bankruptcy in 2002, it continues to retain a major portion of its customer base, and is expected to emerge from bankruptcy as a formidable competitor. All of these companies have experience in offering tailored services such as ATM, frame relay, private line, Internet access and network outsourcing. In addition the regional bell operating companies (RBOCs) such as Verizon and SBC, are increasingly obtaining inter-LATA authorizations to provide data communications services to business customers on an interstate and international basis, and thus are emerging as new competitors in this sector.

Managed Hosting Competitors.    Two of the top U.S. hosting market share leaders, Digex and Exodus were purchased by WorldCom and Cable & Wireless, respectively, and therefore have been adversely affected by their owners’ financial condition. This has limited the number of competitors in the hosting market. As well, some companies have exited the market all together, such as Intel Online Services (IOS), which gave SAVVIS the opportunity to assume some of IOS’ assets and customers. As a result, the share of the managed hosting market is shifting, with IBM emerging as the dominant player. Other carriers and Internet service providers are also in the hosting market, including AT&T, Sprint and Qwest, although they are consolidating their assets. Most of these competitors have been more focused on colocation services rather than managed hosting.

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Internet Service Providers.    Our current and potential competitors in the market include Internet service providers with a significant regional, national or global presence targeting business customers, including formidable competitors such as AT&T and Sprint. Other competitors include Level 3, Cable & Wireless, and UUNET (owned by WorldCom).

Telecommunications Carriers.    Many large carriers, including AT&T, WorldCom, British Telecommunications plc, Deutsche Telekom AG and Sprint Corporation, offer data networking and Internet access services. They compete with us by bundling various services such as local and long distance voice, data transmission and video services to their business customers. We believe that there is a move toward horizontal integration by telecommunications companies through acquisitions of or joint ventures with Internet service providers to meet the Internet access and data networking requirements of business customers. Furthermore, the RBOCs are increasingly gaining authority to bundle theses various services, as well. Accordingly, we expect to experience increased competition from these telecommunications carriers and RBOCs.