Wednesday 08 June 2022

*UKHotViewsExtra* NTT and NTT DATA – moving forward together

NTT DATAOn the 9th May, Japanese-headquartered technology corporation  NTT and IT services and consulting player, NTT DATA, announced a plan to merge their respective IT services operations outside of Japan, creating a new joint operating company (see NTT DATA and NTT combine operations outside Japan). The new company is scheduled to be legally established in October and operational by July next year and will create an organisation of significant global scale employing c.180,000 people with revenues of $18bn outside of Japan (c.$31.5bn when including its Japanese operations).

NTTThe initial release was relatively light on detail, so we took the opportunity to catch up recently with management from both NTT and NTT DATA to get a more detailed briefing and better understanding on the rationale behind the move, and crucially what it means for their customers. 

What are the benefits of bringing the businesses together?

At a recent Q&A event for tech analysts we heard from Vito Mabrucco, NTT Corporation’s Global Chief Marketing Officer, NTT’s Sumukh Tendulkar, VP Portfolio Marketing and Robb Rasmussen NTT DATA’s SVP Global Marketing. The management team started by outlining the four main drivers for the merger, as follows:

  • Firstly, there is a logic to bringing together the Group’s combined IT services capabilities alongside the networking and R&D investments of NTT. The challenge is then in turning these foundation technologies and services into tangible client value over the long term. 
  • Secondly, to deliver on the above there is a desire to improve governance, primarily by offering faster and more coordinated decision-making outside of Japan. This should allow for more autonomy in market, removing the time-consuming need in deferring to Japan. This should also help local management better align resources - people, portfolios, investment, and acquisitions - to the specific requirements of their respective market.
  • Thirdly, there is an ambition to accelerate synergies across NTT companies. The Group collectively possesses lots of R&D, IP and capabilities and wants to find a better way of bringing these together to create value for its clients. The NTT Group is currently over $110bn in revenue and includes a major mobile operator (NTT Docomo) with some 80m subscribers. Collectively, this gives it networking, cloud and edge computing, with primary R&D in areas such as AI, ORAN, quantum computing and photonic networks as well as alternative energy solutions and real estate capabilities, all of which could potentially benefit customers if they can gain suitable access.
  • Finally, this blend and depth of capabilities provides the Group with a differentiated value proposition that management believes no other IT service provider, mobile operator or network operator can match.

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Posted by Marc Hardwick at '08:32' - Tagged: merger   itservices   integration   mobile   telecommunications