Cloud enablement

NTT Splashes $3.2B on DiData

NTT Group (NYSE: NTT) signaled its intention to be a leading global provider of integrated communications and IT services to enterprises and other network operators with a £2.1 billion (US$3.23 billion) cash bid for international IT solutions firm Dimension Data (DiData). (See NTT to Buy Dimension Data.)

DiData, which helps companies build, integrate, and run their data, voice, video, data center, and security networks, has more than 6,000 customers in 49 countries, employs 11,500 staff, and generated revenues of $4 billion and net income of $135 million in 2009.

NTT, meanwhile, serves more than 3,000 Japanese companies and multinationals outside of its home turf and generated about $3 billion in revenues in 2009.

NTT is offering £1.20 per share for the South African-based company. News of the offer, which is supported by the boards of both companies and expected to close by the end of October, sent DiData's share price up by more than 20 percent to £1.22 on the London Stock Exchange.

It seems clear that the potential growth in cloud services, a big focus for the Japanese giant domestically and globally, is a key driver behind NTT's move, though the two say their combined strengths will also cover messaging, VoIP, and security. (See NTT Takes Biz Hosting to Singapore, NTT Com Dons Red Hat in Its Cloud, NTT Offers Cloud Hosting, NTT Develops Cloud-Based Security, NTT America Touts Cloud Support, NTT, OpSource Bring Cloud Services to US, and NTT Trials Cloud Services.)

"By leveraging the complementary strengths of both companies, we are confident that we will provide end-to-end, global-one-stop and high quality ICT services," said NTT's CEO Satoshi Miura in a prepared statement. "Dimension Data and NTT share the common vision to create new services and values to succeed in the coming age of cloud computing."

DiData executive chairman Jeremy Ord added: "NTT’s network carrier capabilities and assets coupled with Dimension Data’s global system integrator expertise create an incredibly powerful and unprecedented combination of capabilities and skills. The combined companies will hold a strong competitive position serving global corporations [that are] moving to managed infrastructure services and cloud computing."

Ord added: "NTT and Dimension Data have a shared vision of how the market will evolve. The combination of NTT's global resources and Dimension Data's system integrator capabilities is an extremely powerful combination."

NTT also sees DiData as a way to become a force in regional markets -- Latin America, West Coast US, Western Europe, Africa and the Middle East, the Indian subcontinent, and Australia -- where it currently isn't a force, but where the IT services firm is strong. The Japanese operator regards Southeast Asia, Central and Eastern Europe, and East Coast US as its areas of international strength.

In addition, NTT is hoping some of DiData's energy will rub off: Part of the official "rationale" for the acquisition is the aim to create a "new corporate culture" that will "accelerate growth by leveraging Dimension Data's entrepreneurial corporate culture."

The move will undoubtedly make NTT a greater international rival to the likes of AT&T Inc. (NYSE: T), BT Global Services , Orange Business Services , and Verizon Enterprise Solutions , all of which are pushing cloud and IT services to their domestic and global customers. (See AT&T Shifting Capex to App Support, AT&T Joins Cloud Computing Set, BT, Cisco Claim Cloud Coup, BT, Microsoft Get Cloudy , Orange Unveils Cloud Formation, Verizon Eats Its Own Clouds, Cloud Formation at Verizon Business, Verizon Trials Cloud Unified Comms, Verizon Puts Security in the Cloud, and Verizon, IBM Offer Cloud-Based Data Backup.)

— Ray Le Maistre, International Managing Editor, Light Reading

digits 12/5/2012 | 4:29:54 PM
re: NTT Splashes $3.2B on DiData

Whether NTT can make this one fly, this will surely light a fire underneath the global ICT services market, because now NTT has the REAL chance to be an international provider to so many companies that aren't Japanese.

It's been working hard on cloud services and IPV6, has plenty of international IP networking experience, and with DiData's help can really deliver a meaningful package to a lot of companies in growth markets.

V interesting move.

Gabriel Brown 12/5/2012 | 4:29:49 PM
re: NTT Splashes $3.2B on DiData

NTT doesn't have the greatest track record in international acquisitions. Okay this is not the mobile division again, but still...


digits 12/5/2012 | 4:29:48 PM
re: NTT Splashes $3.2B on DiData

Yes, this isn't DoCoMo trying to go all international again like it did 9-10 years ago. I think this is a different kettle of poisson.

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