NTT Com extends its global reach
NTT Communications has had an active year, expanding its stake in the global data centre and cloud and managed services markets by acquisition, and extending the reach of its global IP network footprint. Capacity caught up with Michael Wheeler, Executive Vice President, NTT America, to uncover the company’s strategic thinking.
It has been a year of acquisition and expansion for NTT Communications (NTT Com).
The company has significantly grown its presence in the US data centre sector by taking an 80% interest in RagingWire Data Centers for $350 million. It has also moved to buy the whole of Virtela Technology Services, a global managed and cloud network services company, for $525 million.
The idea behind the latter move, it says, is to match Virtela’s services platform with NTT Com’s own global ICT infrastructure, to create a cloud networking services operation that enjoys global scale.
We asked Michael Wheeler, EVP, NTT America, to talk us through what these two buy-outs say about NTT Com’s strategic direction and its plans for the future.
“Our acquisition of RagingWire is really an extension of our data centre strategy in other markets,” he explains. “In the UK, for example, we recently added capacity through our acquisition of Gyron. And we did something similar in India with the purchase of Netmagic Solutions. The strategy is similar for each – taking a majority stake in a data centre company with multiple sites.”
The common driver, says Wheeler, is the desire to acquire not just infrastructure, but expertise too. He says NTT Com remains open to future data centre acquisition opportunities, while intending also to continue a policy of organic growth in the market, as evidenced by the building of new facilities in Hong Kong, Singapore and its home market of Tokyo.
“The Virtela acquisition is a little different,” he claims. “That was about adding customers and revenue, yes. But it is also to do with enhancing what we already do today by taking something successful and giving it a global scale, for the benefit of our enterprise customers. You’ve already seen us do this with Integralis, which is now NTT Com Security.”
NTT Com is extending its reach in other ways, and not always through acquisition. It has, for example, just extended its relationship with CoreSite Realty Corporation by entering CoreSite’s Silicon Valley and Northern Virginia campuses, and growing its presence at the company’s Chicago and Los Angeles sites.
“With CoreSite we’re really just looking to expand our IP network footprint,” explains Wheeler. “We have relationships with other players like TelX and Equinix on a similar basis. It means that we’re working with companies that are our competitors in the data centre market, but ‘coopetition’ is the name of the game these days. It’s good news for these data centres to have us there in their facilities. The more Tier-1 carriers they have the better it is for their customers.”
Expanding in Asia
NTT Com is not neglecting its core stake in the Asian networking market. It has just expanded its global IP network footprint with two new points-of-presence in Jakarta, Indonesia – one of the fastest-growing markets in the world for internet-related business. NTT Com is to provide IPv4/IPv6 dual-stack access not only to domestic providers of internet and content services, but also to foreign companies providing internet-related services to the Indonesian market.
“We have a strong history in Asia, and now we are looking at prime south east Asian markets where we don’t yet have a presence, but want to grow into,” adds Wheeler. “We’ve grown our footprint in Europe a lot in the past two years also, in Milan, Barcelona and Stockholm. And our PoP in São Paulo is starting to reach fruition after a slow start. I think we’ll be looking at more Latin American moves next, to create a proper regional network. It’s about being able to establish the right business case.”
Surveying the global wholesale landscape in a more general and holistic sense, Wheeler believes the relationship between carriers and content providers is rapidly evolving and taking shape to mutual benefit.
“We’ve seen deals between Akamai and both AT&T and Turkcell, for example,” he says. “Some traditionally-minded telcos are too zealous in their beliefs to embrace this, but they risk being affected by market realities. They could not only miss some good business opportunities, but eventually see some customers leave them for other providers.”
Carriers, he says, have to figure out how to exist and thrive in the ecosystem they find themselves in: “The relationship between content and carriers has got to be symbiotic, even if it means a bit of a rough ride on the way,” he believes. “The same goes for OTTs. Every OTT is different and you can’t treat them all the same way. But carriers should be open to working with them, on a case-by-case basis.”