NTT tackles the cloud with $3.6b DiData bid

Japanese telco powerhouse NTT has made a $3.6 billion offer for global IT services firm Dimension Data

NTT's president and CEO Satoshi Miura said an acquisition would ensure NTT is competitively placed "in the coming age of cloud computing".

"We are confident that we will provide end-to-end, global-one-stop and high quality ICT Services," he said.

"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 two companies feel they are a complementary fit with services that "do not substantially overlap".

Geographically, NTT Group's business focuses on Asia, Europe and the USA, while Dimension Data boasts extended coverage in Africa, the Middle East and Australia.

In terms of services, NTT offers network services, data centres, system integration and mobile services. Dimension Data is stronger in development, operation and maintenance of IT infrastructure.

In Australia, however, Dimension Data is arguably stronger than its regional peers in terms of both networking and systems integration.

EMC's CTO and global marketing VP Chuck Hollis called the deal "surprising but not totally unexpected" in a blog post today.

"I see it as an early signpost in the restructuring of the IT industry: from IT as a product, to IT as a service," he wrote.

Hollis congratulated both companies on the deal, using it as evidence that "cloud changes everything".

He forecast a trend of large service providers acquiring customer-facing systems integrators, noting, "I've even got a private list of who I think is going to want to buy who."

Historically, Australian telcos have attempted to purchase IT services firms in similar fashion, but not always with stellar results.

Telstra purchased KAZ Computer Services for $333 million in April 2004, only to spin it back out to Fujitsu in March 2009 for $200 million.

SingTel-owned Optus' acquisition of Alphawest is being used to combine IP WAN services with 'cloud computing' style outsourced IT, but the company remains tight-lipped as to how much the Alphawest business contributes to SingTel's profitability.

"Together, NTT and Dimension Data define a new industry standard for IT service quality, delivery, and support. 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," Dimension Data executive chairman Jeremy Ord said in a statement.

The acquisition has been unanimously approved by Dimension Data directors but is subject to shareholder approval.