NTT crashes the global IT party

Jens Butler and Mike Sapien/Ovum
19 Jul 2010

Mergers such as NTT's plans to acquire Dimension Data (DiData) for $3.2 billion always create an interesting split in opinion, not around the proposed future value but around how the combined organizations will fare as a single entity.

The parties claim the merger will enable them to “offer new IT services worldwide in the age of cloud computing,” combining NTT’s network and hosting capacity with DiData SI capabilities, but will the combined entity be able to create an integrated set of global services offerings to take advantage of this trend?

Given DiData’s substantial footprint and rates of growth, this merger does certainly provide NTT with access to some previously relatively untapped and expanding geographies ($1 billion in revenues in each of Africa, Europe, and ANZ), as well as greatly expanding its network integration, IT, and managed services capabilities. However, the combined entity will still be no more than a buzz within the North American market.

To date, NTT has been noticeably quiet in the global services space and one of the few large, global telcos not to have such a pronounced, global strategy. Then again, maybe it has just watched as its peers have more often than not stumbled in this arena and has waited to pick up the “cheaper” pieces.

What’s in it for DiData? Access to NTT’s extensive hosting capacity, a strong balance sheet to invest in its “cloud” vision, and an end-to-end stack to bring to market. Interestingly, DiData was making progress in transforming itself from a purely Cisco-centric network integrator to a more mainstream, multi-vendor systems integrator. Clarity around the future of this program will be a top priority.

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