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Tech & Startups

NTT Data Services Ready For More Big Buys

The CEO says the company is busy with M&A activity evaluating deals within the “several-hundred-million” dollar range.
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The X Room provides NTT Data Services the chance to show off its capabilities on screens on all four walls of the room.

A little over a year after scooping up Dell Services for $3 billion, NTT Data Services is on the hunt for more strategic acquisitions as it expands its global presence. It’s also beefed up its research and development, with more than 30 pilots launching across sectors soon.

“There are a number of large deals we’re chasing,” said John McCain, CEO of NTT Data Services, adding that the company is considering deals in the “several-hundred-million” dollar range. “They’re in all parts of the world today, and they’re all in different industries.”

The company, based in Plano, is on the cusp of completing the back office and network integration of Dell Services. That is expected to be wrapped up by mid Spring, at which time the company will have some additional capacities to put to use and to complement with future acquisitions, McCain said. The companies that NTT Data Services is currently in talks with range from startups generating a few million dollars to multibillion-dollar operations. But they all do at least one of three things: add consulting horsepower in technology or another specific industry, increase the NTT Data Services’ scale, and/or expand its geographical presence.

The company is also heavily active in R&D, which is partially fueled by aid from NTT Data in Japan. “We get a fair amount funding from Japan to do that,” said Kris Fitzgerald, NTT Data Services CTO, who was part of the Dell Services team before the acquisition. “That’s the unique thing about working for a Japanese company. They believe in that.”

NTT Data Services is currently working on about 35 developments in data and intelligence, intelligent automation, customer experience, IoT, optimized IT, and cybersecurity. Automation is currently the hottest topic of conversation with clients followed by digital intelligence and IoT, Fitzgerald said. The company brings clients in to its Plano headquarters for an immersive experience in its X Room, which allows it to explore opportunities and present solutions across screens on all four walls of the room.

The company is aiding retailers by providing virtual assistants that can help customers easily reorder items, get sale information, and set up appointments to improve customer engagement via phone. It is working with the airline industry to provide similar service, eliminating phone wait times and multiple transfers for an easy flight change. It’s also piloting wearable technologies that could improve the safety of workers who have long days in the field. In other words, if an engineer is under stress, a sensor embedded in his/her T-shirt could alert the employee to take a break. Another development aims to help healthcare clients identify high-risk patients before they have an incident. Healthcare providers could be alerted to certain metrics and symptoms allowing them to call the patient in before an emergency occurs, eliminating an expensive emergency room visit.

McCain says he believes the area that will offer the largest opportunities for growth in the industry will be cybersecurity. “If my children were [kids] today, I’d make sure that they came out with the ability to go into the security space,” he said. “That’s got a long runway for us and in the business.”

NTT Data Services employs about 42,000 employees across 40 countries. It generates a little under $4 billion in annual revenue, which represents half of NTT Data’s global business.

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