The Make of a $15BN Mega Business. NTT Ltd’s CEO Jason Goodall on bringing 31 companies together
Company mergers are usually hard work, but when well executed, they can pay off with big cash returns. Jason Goodall, CEO of recently launched NTT Ltd is the man behind one of the market’s largest rebranding exercises, as 31 brands are brought under one $11bn IT mammoth where data centres take centre stage. João Marques Lima has the scoop.
On July 1, 2019, the world’s third largest data centre company came to life as Tokyo-based NTT brought together one roof 28 existing brands and three other businesses that it acquired in recent months.
NTT Limited, as the company is now known as, is headquartered in London, UK, and really englobes all the different brands that NTT owned outside of Japan.
The company currently operates in 73 countries and regions around the world, and services clients in over 200 countries.
With a combined revenue value of $11bn, the group is now on a mission to grow that to $15bn by 2023 and new CEO Jason Goodall has been brought in to oil and drive this giant machine towards its goals.
As with most businesses in this space, NTT owned several data centre companies which are now operating under the brand of Global Data Centers, a division of NTT Ltd. which incorporates DPA, e-shelter, Gyron, Netmagic, NTT Indonesia Nexcenter, RagingWire and other NTT Communications group Data Center divisions.
The combined global platform is one of the largest in the world, with over 150 data centres spanning more than 20 countries and regions including North America, Europe, Africa and APAC.
The operator we offers access to multiple cloud providers, a large variety of Internet Exchanges and telecommunication network providers including its own IPv6 compliant, tier-one global IP network.
In this interview, Data Economy sits down with CEO Goodall to discuss the company’s transformation in the past months and what is being planed in the future, including a $7.2bn plan to expand existing data centre facilities and build new real estate assets.
How is the process of bringing 31 companies with a market value of $11bn together coming along?
We are consolidating 31 companies around the world. We’ve relaunched and rebranded most of those companies. The completion date for a proper rebranding is the end of December 2019.
We’ve got about 290 offices around the world, and we probably already rebranded about 250 of those offices and we’re hoping to have all affiliated companies as well as Dimension Data, NTT Communications, and NTT Security totally rebranded by the end of December. We’ve also announced and appointed the executive management team for NTT Limited as well as the executive and management teams for all of our regions around the world.
It’s still a journey. The integration journey will probably continue for the next 24 months when it comes to integrating some of the back-office systems, ERP systems, et cetera, etc. But we certainly can operate as one single company.
We certainly can position a value proposition and bring together all of the capabilities to our clients as one single company. But in the back end there’s still some work to do. But it’s been a great story and we’ve had some good wins already from some of our clients.
Why was it important to bring these 28 companies – and three others that you’ve recently acquired – together?
This move was mainly driven by the market, the way that we saw the market transitioning and some of the key trends that are happening in the market.
Secondly, it was driven by our clients. Over the last six or seven years, we’ve got about $4.4bn in what we call internally “cross selling” or “collaboration selling”.
We’ve had more than one of these 31 brands working with other brands within the group sending a single solution to a client. What this tells us is that there’s a market opportunity and our clients are looking for companies that can bring together a much broader set of services, and a much broader value proposition.
Thirdly, we measured in quite a lot of detail what we call our success rate. How many transactions or contracts do we try and win versus how many do we actually win? And our success rate, when we bring more capabilities jointly together for a client, are significantly higher.
NTT Limited see the market in a very similar way to most companies out there. Fundamentally, what’s happening is that our clients are all driving a digital transformation story within their own organisations.
The main thing is that our clients understand that the main value in our relationships is around data. So how do you click the data? What sources do you use to get the data? How do you then efficiently store that data somewhere? How do you then drive the right analytics around it that just kind of try and create information out of it? Then, how do you work out relationships within that information that can fundamentally achieve one of four things.
What are those four things?
One is how do I, as a customer, increase my revenue to my customers? Number two, how do I use this data to fundamentally improve and lower my cost of delivery? So it’s a cost-based driver. Number three, how do I improve my clients’ experience? And number four, how do I improve my employee experience?
Obviously, I’m simplifying it, but I fundamentally believe that the digital transformation our clients are looking for is how do they get the value out of data and how to they drive one of those four pillars.
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What about infrastructure demands your customers are bringing to you?
The way our clients are looking to leverage infrastructure is changing and they all moving from the non-programmable hardware based infrastructure to a software defined everything. We obviously saw the virtualisation in the data centres. Now we are seeing software defined networking becoming mainstream.
We are seeing all the security companies reprogramming into software. There is a whole move to software, and our clients are seeing that that gives them significant agility, and significant scale and at very different price points. It also allows them to have a lot more intelligence and gain a lot more of the data that I was referring to other than their infrastructure.
As our clients start to drive to a more software defined preventable architecture, they need in a company that can help them do that. Additionally, everything is moving to a hybrid IT or a multi-
cloud environment. When we talk about multi-cloud, we don’t just talk about the hyperscalers.
Obviously, they are very important components, but we also want to talk about the SAAS providers, people like Workday, people like Salesforce.com. And we fundamentally believe as a company that in the future they are going to be a lot more industry focused software service providers. They will aggregate and integrate some sort of more industry focused applications with the infrastructure.
You’ll almost get these industry vertical cloud providers as well. If you look at the statistics in the market, and most analysts are predicting that every sort of large enterprise will probably have up to about seven different multi-card providers and they’ll probably have somewhere between 40% and 60% of the applications and data in some sort of cloud based environment.
Our whole strategy at NTT Limited is to help customers on that journey from a consulting perspective, guide them as to what they should be doing and when. From a system integration perspective of our ecosystem of partners, it should then design and do the solution architecture, and then build that environment, whether that’s APRs into a hyperscaler, whether that’s redesigning and architecting and moving a network into a software defined network, whether that’s moving some of their infrastructure into our data centres that are interconnected.
Then on top of that, using our managed service to give them a single view of their architecture. We can build it, we can design it, and then ultimately we can manage it for them as an organisation.
You have 140 data centres around the world, which makes you the third largest footprint just behind Equinix and Digital Realty. You’ve also announced a $7.2bn plan to either build new or upgrade existing facilities. Where is NTT going in the data centre space?
In terms of number of data centres, we are the third largest [operator in the world]. After the US, we might be either number one or number two, because we have a very good footprint in both Europe as well as in Asia. We continue to see a huge opportunity in the data centre business.
We also see the data centre being a key asset to us to be able to deliver managed services in a hybrid IT environment. Some of our biggest tenants and our biggest clients in our data centre business are in fact those hyperscale partners and those status providers. People like Twitter, Microsoft, AWS and so on, are some of the tenants in our data centres.
Digital Realty and Equinix are growing around 15% to 20% year-on-year and we get the same growth rate. And we have announced the $7.2bn expansion plan and that expansion plan will be predominantly focused on the US, Europe and Asia.
That’s where a large part of our global client base is. And that includes some emerging markets as well, because large parts of Asia obviously are emerging and some parts in the Americas, for example South America, are emerging as well.
In the way that the data centre world works, in some cases you buy big chunks of land and you only build your first one or two data centres and there’s an opportunity just to extend the data centre footprint on the existing site. Some of that $7.2bn will be going into that to increase capacity at existing facilities.
We’ve also identified and already bought land for new sites. We will be building new data centres on some of the new sites that we’ve already located. And then we will continue to look for additional sites where we see some of the hyperscalers extending their own services to and where we see our own enterprise client demand.
We are also looking at doing something in Africa. We will once again look at extending our data centres in South Africa based on demand. And we will consider, the rest of Africa. However, at the moment, there are no fixed plans outside of South Africa.
Our model is a combination of things; In some cases we’ll own the data centres outright with NTT. In other cases we’ll partner and we’ll own a percentage of the data centre. We might partner with a property company. In other cases, other people might own the data centre, but we run the operations.
Essentially, there’s a hybrid model around doing it, but it’s a massive opportunity and it’s a significant investment that we’ve already committed and a lot of that is already underway from a build perspective.
You want to be a $15bn company by 2023. What do you envision for NTT over the next decade even beyond that?
The most important thing to me is how our clients perceive the company to be in 10 years’ time. And it’s a continuous journey. The first thing is that we would obviously like to be seen to be, once again, a world leading technology services company that helps our clients use technology in a way that allows them to remain competitive. And you want to do that on a global scale. We want to be as a technology services company and we want to be seen to be innovative.
In 10 years’ time I also don’t think we will need a lot of [outsourced] IT services companies as part of NTT. We spend $3.6bn a year around R&D, out of Tokyo. We’ve also extended that. We have in fact, opened a product innovation centre in Brussels recently too. In addition, we’ve got a client innovation centre in Sydney. We have a very focused plan of taking innovation outside of Japan, and then obviously extending that into the global business.
In addition to that, we’ve also created a research centre on the West Coast of the US. And we’ve employed top academia skills out of Stanford, MIT, and some of the other universities there. We’re focusing primarily on quantum computing and cryptography. Those are the two main technology streams. And obviously, the world of security is going to continue to get more complex.
The people who were going to be on the bad side of security are going to
get more sophisticated, will have more sophisticated tools and will be more determined. But the other aspect is how do we actually look at security in a very different way. We’re also fortunate enough to have a fund. We’ve got a $500m fund and that fund really is out there looking into how do we partner and be part of the conversation of the new technology companies that are coming up with new ideas each and every day.
We’re fortunate enough to be able to invest, which allows us to be very connected to the technology world as it continues to change, but also allows us to have a seat at the table. And that lets us to somewhat direct some of that thinking based on what we’re hearing and what we are seeing with our own clients. This allows us to sort of help them to help us in bringing new technologies to market.
I’d love to be seen to be that innovation company that has actually made a difference by some of the investments we’ve made today, whether that’s through cryptography, or whether it’s through quantum computing, or whether it’s through some kind of action we’re doing with certain clients.
Technology is going to continue to accelerate, and the world that we live in and how we live and the experiences that we have, are going to be fundamentally different.
As a company we want to make sure we do two things. One is that we have our eye on the future to some of those capabilities we have around innovation, disruptive technologies, investing in the future.
But at the same time, we want to be the company you can trust, who can deliver today on the technology allows your business to grow today and allows you to leapfrog into the future.
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