Thursday 30 August 2012

Japan's NTT eyes more acquisitions, growth in India


The NTT Group, which bought Mumbai-based Netmagic Solutions early this year, plans to continue shopping. It is interested in buying companies that will propel growth of its IT services segment in India and abroad. "For both China and India, we are making investments to grow, both organically and inorganically through acquisitions, to address global delivery needs as well as the significant domestic business," said Jeffrey Womack, head of marketing and alliances for NTT Data, the North American arm. With a string of acquisitions, NTT is turning the conservative image associated with Japanese firms on its head. In the past few years, NTT Data alone has acquired six companies.

But with a debt ratio of 0.38 and a deep pocket of nearly $2 billion in cash, the Japan-based firm packs enough ammunition to make even more purchases. "India is very important to us. It continues to be the foundation of our global delivery strategy. Till last year, India was supporting only North America, but now it is a global delivery hub, supporting clients in EMEA (Europe, Middle East and Africa) and Asia," said Womack, the second high-ranking executive from NTT Data to visit India after CEO John McCain in January.

He sees China, where NTT Data currently employs around 4,000 people, as the second global delivery location. In India, NTT Communications, another NTT Group company, acquired data centre and cloud services provider NetMagic in January for $128 million (. 740 crore at current exchange rates).

Before this deal, NTT Data had bought Intelligroup in 2010 and Vertex in 2007, giving the group a presence in six Indian cities. Its global buys, including Keane, further boosted the Japanese group's presence in India.

But despite these buys, NTT Data still lags behind other multinational technology-services firms, such as Capgemini and Accenture, which have aggressively ramped up their India presence over the past two-three years. While Capgemini employs over 30,000 Indians, Accenture's headcount exceeds 60,000.

NTT Data, which now has a workforce of 10,000 in India, will soon be home to the sharedservices operation that the company is building, Womack said. The centre will first run operations like human resources and IT support for NTT Data internally. Later, this will be extended to the whole NTT Group, he added.

Early this year, the company integrated all its US acquisitions under the NTT Data brand. With $16 billion in revenues , NTT Data now ranks as the sixth-largest IT service provider and systems integrator globally, according to research firm Gartner. "Having one brand name allows us to represent our capabilities better," said Womack.

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