NTT DATA - a global organization with the ambition of local client proximity

NTT DATA has been operating with a new organizational structure since April 1, 2024. The integration efforts that had been made for years came to a temporary halt with the merger of NTT DATA and NTT Ltd. The new organizational structure provides for three regional go-to-market units (APAC, North America, EMEAL) and two global units, one focusing on infrastructure services (NTT DATA Technologies Group), the other on application-related services for SME customers (NTT DATA Business Solutions), with the latter focusing almost exclusively on SAP-related services. 

PAC recently had the opportunity to discuss NTT DATA's corporate strategy, portfolio, and go-to-market with relevant executives at an analyst relations event in Barcelona in mid-April. These discussions have given us a clearer picture of how NTT DATA intends to bring its strengths to customer projects in a special way.
 
It is remarkable, for example, that NTT DATA is aiming for a broad portfolio and has therefore taken a different path from its main competitors. Thanks to the integration of NTT DATA and NTT Ltd., the infrastructure-related business (of NTT Inc.) is now more closely linked to the digital transformation and application-focused business of NTT DATA. IBM and Atos have taken a different path or are planning to do so (in the case of Atos). Both have separated or will separate their legacy (often infrastructure-focused) business services units from the fast-growing business services units that are focused on digital transformation projects.
 
NTT DATA relies on the fact that infrastructure-related services such as security, network & connectivity, 5G, and data center can make a valuable contribution to digital transformation projects. The company operates approx. 150 data centers in 20 countries worldwide, which makes it the third-largest data center provider in the world, according to its own information. NTT DATA can use these assets in customer projects where hosting services for private cloud environments are required. These assets could become hugely important due to the sharp rise in demand for AI and GenAI, which have an enormous appetite for computing power and data storage.
 
Furthermore, NTT DATA expects growing demand in the asset-based business. The addition of tools, templates, accelerators, and vertical solutions to the dominant services business has long been an important differentiator. NTT DATA is very clear in always positioning its IP-based assets as complementary to its core IT services business. IP-based assets help customers achieve faster results in their digital transformation journey. NTT DATA does generate some revenue from asset licenses, but this is not a core element of its strategy.
 
Over the past two years, NTT DATA has implemented multiple programs to promote asset-based solutions across all regions. This topic will be further unified through the organizational merger and can then be used more intensively in customer projects across the organizational units. For example, NTT DATA has created a Global IP framework to enable seamless implementation of assets across regions and a Global Helpdesk to facilitate inter-regional operations, among other initiatives to strengthen its asset-based business practice. NTT DATA is also working on a uniform brand.  
 
The efforts around asset-based solutions are part of NTT DATA's global innovation strategies. NTT DATA structures the potential of innovations into three groups, depending on whether they are already delivering added value for customers (called Mainstream Innovations, such as Cloud, Data & Intelligence, and Edge as a Service), are capable of doing so in the medium term (called Growth Innovations, such as GenAI and LLMs, Cleantech, and Digital Twins), or can deliver added value in the future (Emerging Innovations, such as Smart Robotics, Metaverse, and all Photonics Networks). The innovations are driven forward together with partners; they go through various evaluation and maturity phases before they are integrated into the NTT DATA offering or made available as an asset. One remarkable example of NTT DATA’s investments in long-term innovations are photonic networks, which are expected to significantly reduce energy consumption in IT while at the same time promising higher capacity and fewer delays in IT. Market maturity is expected to be reached by 2030.
 
This strategy shows that NTT DATA wants to make greater use of its strengths as a global organization. The plan is coherent and feasible. NTT DATA used to operate as an inhomogeneous organization due to its regional and organizational fragmentation, making it a hidden giant. According to the latest PAC ranking, NTT DATA has moved into the top five of the largest IT service providers for the first time. This means the organization has the capabilities for global innovation, global customer service, and global delivery. In the near future, it will be exciting to see whether NTT DATA can live up to its own claim of balancing global capabilities with local familiarity and proximity.