NTT Expands Private Cloud Services

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NTT, the large Japanese telecommunications firm, is beefing up its private cloud services, billing itself as a global provider that has a large focus on Asia.

"We've launched the cloud service globally," Kazuhiro Gomi, CEO of NTT America, told Information Week. "We think that's a differentiator, globally consistent cloud services around the world."

NTT is expanding its cloud presence in the U.S. It opened a U.S. research arm, the NTT Innovation Institute, in Silicon Valley in April. In May, NTT named Srini Koushik CEO of the Innovation Institute. Koushik was previously at Hewlett-Packard's Enterprise Services division. Koushik will be tasked with expanding the research staff from fewer than 20 researchers to 100.

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Those researchers will focus on cloud services and security research, Gomi said. Cloud will hold particular interest for it, as it works to add more services to its NTT Global Cloud offering. "The center of gravity has been shifting to the U.S. So we've been thinking we needed to have something over here," Gomi said. "Our cloud may be very good from a Japanese market standpoint, but that may not be the case for the U.S market, so we want to bring it up to top notch in the U.S."

In addition, "the demarcation between telecom and IT is getting blurrier and blurrier," he added. "Pure telecom doesn't exist anymore."

NTT launched its cloud in Asia in June 2012, and in February added data centers in the U.S., the U.K. and in Asia. It now has nine data centers in eight countries and will add two more data centers and one more country.

Rick Villars, an analyst at International Data Corp., said it was smart for NTT to put research in Silicon Valley, because that's the center of much of the development community.

It might not seem to be the most opportunistic time to launch a cloud, but NTT thinks it can become a major player in private cloud services. Google, after all, was the 19th search engine in the market. But NTT does not expect to unseat companies like Amazon and Microsoft from the pinnacle of the cloud, at least not yet. Still, Gomi said NTT should have some advantages as a cloud provider, especially around reliability.

Villars said that NTT's cloud service could be of particular interest to financial services companies and retailers, particularly as they expand in to Asia. "Anybody whose world is shifting to a customer base that's highly mobile and highly connected, they need to have data centers where the customers are, for response time and development reasons. A lot of these new customers will be in Asia. Companies are not going to want to build whole new data centers themselves. Private cloud is part of that agile development for market companies want."

Villars said there was pent up demand for data center capacity in Asia, and NTT could play to that as a strength. It also might help it increase its cloud competitiveness. For instance, he said NTT could become the de facto provider for mobile applications, because those tend to get built outside of the U.S. NTT could then help migrate such mobile applications into the U.S.

He said another potential tactical advantage was that many new rollouts in Asia would be larger and more sophisticated than those in the West.

First, though, NTT "will have to prove they can support a rapid massive scale-out of capacity -- not just for one customer but 10 or 20," Villars said. He said that was true for almost all the cloud providers outside of Amazon and Microsoft.

Gomi said NTT has "close to 100" customers on its private cloud now, and is pushing to get to 1,000 this year. That may give it the opportunity to prove itself.