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NTT Com

Home / Posts Tagged "NTT Com"

Tag: NTT Com

Interview with Hiroo Unoura, NTT President – the courage to say we are only one of many

As outlined in a previous blog, NTT, the partly state owned Japanese telecoms company, is undergoing a major global shift.  Nikkei Business interviewed the president of the NTT group, Hiroo Unoura, about how he has been trying to change NTT since he became president in 2012.

In June 2013 he announced to the top executives of the group companies that “we should not leave any homework for future generations”, by focusing on what kind of services would be needed for the era of cloud computing, and that NTT must no longer regard itself as the main player, but simply “one of them” due to the diversification and globalization of the telecoms services and applications market. He is reshaping the organisation globally, using North America as a starting point for global expansion.

NTT has set up a 100 strong cloud research center in Silicon Valley.  Unoura believes that businesses in the USA are far more inclined to see shifting to the cloud as a life or death matter, whereas the Japanese market is still hampered by regulation.

Unoura was involved in cleaning up the mess after the major losses made by NTT in the early 2000s from overseas investments.  Those acquisitions were not about increasing turnover, he points out, rather about acquiring 3G technology from AT&T Wireless or building a global internet network in the case of Verio.  The current acquisitions are about expanding the business.  As Dimension Data is a specialist in cloud, by acquiring them, NTT is hoping they will find further candidates for NTT to acquire in the cloud business.

Acquisitions such as the recent purchase of Spanish IT company Everis are all discussed with NTT overseas operations such as NTT Com, NTT Data and Dimension Data first.  However NTT has no intention to abandon Japan – the idea is to learn from overseas, and bring that knowledge back to Japan once Japan’s own industrial structure has changed.

NTT is of course putting itself into direct competition with the very Japanese companies who used to rely on NTT as a key customer, such as Fujitsu and NEC, by focusing on cloud and global markets.  Fujitsu in particular already expanded overseas decades ago through purchases of European and North American companies, although it took many years before it then tried to integrate them into “One Fujitsu”.  Time is not on NTT’s side, and trying to integrate strong and distinctive companies such as South African Dimension Data into “One NTT”  may need all of Unoura’s apparent boldness and courage and then some to push through.

 

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NTT’s global acquisitions bear fruit

Nikkei Computer magazine has run a 4 part series (articles in Japanese) on whether the formerly domestic oriented telecoms company NTT group can really succeed globally.  The answer appears to be yes, in part thanks to its agressive acquisitions over the past few years of Dimension Data, Keane, Centerstance and others.  The major question is whether a strong enough leader can be found in Japan to keep the momentum going.

The first part of the series examines NTT’s recent successes in winning deals in the USA – with the Texas Department of Transportation for application maintenance and support involving NTT Data, Dimension Data and MSSP Solutionary (which it acquired last June) and an IT services contract with Yum! Brands (KFC, Taco Bell and Pizza Hut) in Kentucky. Both of these deals involve the transfer of hundreds of employees over to NTT Data, which I imagine will prove quite a challenge for NTT.

An insider says that because NTT is very much seen as a challenger in the North America, this sense of being an outsider has united NTT ‘s various companies to cross sell and bring in deals such as the TDoT and Yum! deals.

The NTT group lost a trillion yen (around $10bn) in the US market a decade or so ago on investments in AT&T Wireless and Verio.  In response to the question of why they are trying again now, Tsunehisa Okuno, Director of the Global Business Office at NTT Holdings says that as the USA is the largest and most competitive IT market in the world – “if we can’t succeed there, we will not succeed in globalizing our business.  The winner in the cloud market is  not decided yet, and North America is the key to that market”.  NTT’s intention is to develop its technology and skills in North America, then bring that to Europe, the simplify further and bring to developing markets.

Nikkei Computer highlights three areas of concern for NTT:

1. Developing the strongest services

In particular, NTT need to address the duplication of IaaS and MSS offerings from its subsidiaries NTT Communications, Dimension Data, Solutionary and NTT Security (in Germany) if it is to compete effectively with Amazon, IBM, Dell and Verizon.

2.Standardizing knowhow and methodology

NTT is finding that rolling out what they have developed in Japan as the global standard has not been easy, and instead is now looking to standardize methodologies originating in its overseas subsidiaries.

3. Complex organisational structure

NTT has retained the brands and the founders of the companies it has acquired, believing this to be key to keeping motivation high.  However it can lead to lack of oversight and any sense of unity across the group, as well as a very complex organisational structure. NTT Holdings is still over 30% owned by the Japanese government, and there are laws in place preventing anyone of a foreign nationality becoming a director in the holding company.

Up until now NTT has  relied on posting a small group of executives across its subsidiaries who knew each other well and had the same vision for NTT – Okuno was from NTT Com, Kazuhiro Nishihata a director at NTT Data also comes from NTT Com and used to be President of NTT Europe.  Okuno feels a limit has been reached on this management by jinmyaku (human network) and from now on NTT will have to communicate more based on logic, taking as long as necessary to persuade others.

Takashi Enomoto, former Senior EVP of NTT Data, in charge of overseas business, was very keen that there should be one NTT Data brand, and was able to persuade the founders of acquired companies by pointing out that IBM is IBM, Accenture is only the Accenture brand. A second Enomoto is needed at NTT to ensure the success of its global strategy, says Nikkei Computer.

 

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Last updated by Pernille Rudlin at 2014-02-11.

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