Friday, September 22, 2017

NTT Group seeks growth through diversification – part 3

Preamble – The first part of this article presented an organizational look at the NTT Group, which consists of five main groups and an astounding number of subsidiary companies: 944 at last count with interests as diverse as IT outsourcing, mobile apps, real estate, data centers, finance, construction, and even electrical power. The second part of the article looked at NTT’s Global Cloud Business Promotion, which aims to provide full-stack, full-lifecycle integration from the data center, to the managed ICT layer, to the applications.

From its annual report, we know that the NTT Group currently generates about US$16.9 billion in overseas revenues, of which 65% is for IT infrastructure and 35% is for application services.  This breaks down as follows:

Americas         $5.9b, including 55% for IT infrastructure and 45% for applications
EMEA             $6.6b, including 60% for IT infrastructure and 40% for applications
APAC              $4.4b, including 90% for IT infrastructure and 10% for applications




NTT Communications

The network resides between the data center layer and the managed ICT solutions and it is here that NTT perhaps has its greatest strength. Inside Japan, NTT’s fiber infrastructure, through its various subsidiaries, is unrivaled for wholesale operations and FTTH residential connections. The global enterprise networking segment is addressed by NTT Communications.  The second part of this article covered the NTT Comm’s recent Global SD-WAN launch. The company is also well-known for its Global IP Network, which is IPv4/IPv6 backbone network connected through a single AS 2914 and offering high-speed, high-capacity IP communications to all major countries in Europe, North America, Oceania, and Asia. Alongside this IP backbone, NTT Comm operates a global MPLS service that delivers Layer 3 IP-based MPLS and Layer 2 Ethernet-based VPLS in 190 countries/regions.

More recently, NTT Com has developed a Multi-Cloud Connect service that is directly connected to public clouds hosted in key markets across Europe, North America and Asia Pacific. Multi-Cloud Connect currently connects to Oracle Cloud and other third-party cloud services including Amazon Web Services (AWS), Microsoft Azure, Office 365, Dynamics CRM Online, as well as NTT Com's private cloud service, via a security-enhanced, private Layer 3 connection, avoiding the public Internet.

NTT Comm is an active participant in the subsea space. One project it has led is the recently-completed, consortium-backed Asia Pacific Gateway (APG) optical submarine cable network, which spans a total length of 10,400 km and leverages 100 Gbps optical transmission and digital coherent technology to deliver a capacity of more than 54 Tbps, the highest of any network in Asia. NTT Com has established two diverse landing points, one in the East and the other in the West of Japan for the APG and Pacific Crossing-1 (PC-1) submarine cable which connects between Japan and the U.S. having diverse route such as north and south routes. The company has also implemented diverse landing points in Hong Kong and Singapore for the APG and for the Asia Submarine-Cable Express (ASE), which was launched in August 2012.

It should also be noted that NTT Comm, like other companies in the group, sometimes deploys proprietary technologies developed in-house. Earlier this year, NTT Communications began deploying a 400 Gbps optical transmission system in its data centers. The system raises the transmission capacity of NTT Com's core network above 19Tbps per optical fiber, or more than double existing capacity. The company said the 400G rate is achieved by using advanced digital-signal processing technology developed in house.

Connecting the pieces - Dimension Data

Dimension Data, which was founded in 1983, is probably the best-known technology firm from South Africa having built a global reputation for excellence in networking integration, IT management and data centers. Over the years, Dimension Data expanded into markets worldwide, sometimes acquiring local integration companies, including Australia's ComTech. Dimension Data has also served as Cisco Systems exclusive distributor in South Africa. The company reports an annual turnover of US$7.5 billion. It now has offices in 52 countries and 30,000 employees, 

In 2010, the NTT Group acquired Dimension Data for £2.1 billion ($3.2 billion). Since then, NTT has preserved Dimension Data as an independent subsidiary. Dimension Data still maintains its headquarters in Johannesburg with mostly local management. Jeremy Ord, who served as Managing Director since its inception, continues on as Executive Chairman. In 2016, Dimension Data appointed Jason Goodall as Group Chief Executive Officer. Goodall previously served as Dimension Data's Group COO, where he has been responsible for the regions and several global functions including sales, marketing, Group Information Services (GIS), HR and commercial finance. Goodall is a veteran of Dimension Data having served many roles during his 18-year career with the company. 
Even while under the NTT umbrella, Dimension Data has persevered in its strategy of acquiring other integration companies to add to its team and customer base.

NTT Data

The NTT Group has another global IT integration and management company.  NTT Data, which was founded in 1967 and is based in Tokyo, maintains business operations in 42 countries. For 2016, NTT Data posted annual revenue of US$14.6 billion. It currently has about 120,000 employees. Unlike Dimension Data, which is a fully-owned subsidiary, the NTT Group holds a 54% equity stake in NTT Data. 

(NTT Comware is another IT integration subsidiary, although its operations are focused on the physical assets of the NTT Group itself rather than outside customers)

Overseas acquisitions are also a key element of NTT Data's strategy in Europe, the United States and APAC. In 2016, NTT DATA acquired Dell Services, an IT services provider recognized for its depth in vertical industries and for its offerings around infrastructure services, cloud services, application services, and business process outsourcing. The purchase price was reported at $3.05 billion. This deal significantly increased NTT DATA’s presence in North America particularly in healthcare and insurance industries. Prior to 2009, the Dell Services groups was known as Perot Systems, a business consultancy founded by H. Ross Perot.

Both NTT Group and Dimension Data identify digital transformation as a key business opportunity. Enterprise companies are under pressure to evolve their IT infrastructure or be crushed by more agile competitors. A big part of this revolves around process automation and finding cloud-optimised software that streamlines operations. Hybrid public/private infrastructure is required as is expertise in rapidly evolving open source technologies, such as blockchain. It is here that theses sister companies provide overlapping services and both have access to NTT Group's vast resources.

For example, earlier this year, Dimension Data and NTT Com agreed to explore how to deliver a unified cloud experience to clients through greater collaboration within NTT, initially via closer integration of the Dimension Data and NTT Com cloud IaaS platforms.


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