ANALYSIS: NTT Com eyes further acquisitions to support enterprise strategy

26 August 2015 |


NTT Communications is to heighten its focus on serving the enterprise segment under newly-appointed CEO Tetsuya Shoji.

The operator has indicated that it is set to pursue further acquisitions in the cloud and data centre space. 

At his first press conference in London, UK, in June, Shoji stated the company’s ambitions to act as a “single point for enterprises”. 

“Sprawling ICT estates across multinationals prevent business transformation. They reduce speed and add unnecessary complexity. Our role as the global ICT partner will be to reduce this friction. We’ll continue to invest in growth areas – data centre services and cloud services,” said Shoji. “To do that effectively, we realised we needed to expand the geographical range of our core services.” 

NTT Com has embarked on a string of cloud and data centre acquisitions in North America, Europe and Asia in recent years.

In 2013, the company acquired approximately 80% of Sacramento-based data centre company RagingWire for $350 million.

The deal – finalised in January last year – more than doubled NTT Com’s data centre footprint in the US, adding 650,000 square feet.

In April 2015, RagingWire opened its third colocation centre in Sacramento and said there are further US expansion plans in the pipeline.  

In a similar bid to bolster its presence in Europe, NTT Com acquired German data centre operator e-shelter for $830 million in 2013, marking it as the third largest data centre operator in the region. 

“Together with e-shelter, we are looking at where else we can deploy in Europe,” said Shoji.. “It is a good asset for us to build new businesses.” 

The  e-shelter deal follows its earlier acquisition of an 85% majority stake in UK data centre services provider Gyron in 2012. The acquisition has significantly strengthened NTT Com’s cloud-based offerings in the UK, accelerating its growth with the addition of data centres in Slough and an upcoming one in Hemel Hempstead. 

At the press conference, NTT Com revealed that the launch of the Hemel Hampstead facility has been delayed to the end of 2015, having originally been scheduled for June 2015.   

The data centre is said to provide approximately 10,000 square meters of server room, more than doubling the total server room area in the UK for the company. 

NTT Com added that it plans to announce more details about its expansion plans in Europe in the coming months, with several markets under consideration. 

"We are expanding our footprint because being close to customers is important, not only physically but also culturally,” said the CEO."It's important to have people who can speak the local language."

NTT has been slightly less prolific with its data centre acquisitions in Asia. In July 2015, it acquired Indonesia’s largest data centre provider Cyber CSF.  

“In this market, we have been looking for land and real estate for several years. It was difficult to find, so we made the judgement that it is quicker to buy a company that already has a data centre facility,” said Shoji. 

Based in Jakarta, the 7,700 square metre facility is connected to 32 domestic and international carriers as well as an internet exchange point used by multiple ISPs. The acquisition will further bolster NTT Com’s data centre capabilities in the Asia-Pacific region, where it presently serves customers in the finance, IT and manufacturing industries. 

NTT Com presently offers cloud services from 13 locations in 10 countries and aims to introduce more facilities in Spain, India and China by the end of the year.

It has positioned itself as a frontrunner in NFV-based commercial services. In 2014, it boldly launched a cloud-based offer that enterprises can activate themselves and pay for on a per-use basis. Built on a platform developed by Virtela, a company it acquired for $525 million in January 2014, the services are independent of any single vendor’s vision and available right across the carrier’s global footprint.

“Enterprise cloud is as much about people as it is about technology,” said Shoji. “Enterprises are trusting us with their reputation. We want to earn this respect.”

It looks set to take its leadership with next-generation technologies even further at the end of the year when it launches its  latest cloud platform. The platform will use software-defined networking (SDN) to allow enterprises to manage their public and private clouds as it they were on one cloud. 

“We have been using SDN for many years,” said Shoji. “Now we are making some features available directly to customers. By allowing them to create and shift networks, as well as enabling colocation, we are making it simpler for [enterprises] to manage [their workload].”