NIKKEI FORUM 26th Global Management Dialogue Proceedings

Expanding the Global Business and Building World-Class Data Centers

At NTT DATA, we have been working on a global expansion since around 2005. In July 2023, that journey began its next phase. We transitioned to a structure that includes a holding company, a domestic business company, and an overseas business company. Now, we have offices in over 50 countries and regions worldwide and have grown to a level where our sales rank 6th globally, competing with household names in our industry.

IT is a global commodity, and globalization is a field for corporate growth. One of our main aims is to support Japanese companies expanding overseas, and that made the overseas expansion of our own business inevitable. Through our growth process, we have actively pursued mergers and acquisitions (M&A) with overseas companies. This includes itelligence, a German company NTT DATA acquired in 2008, which possessed extensive SAP know-how absent in Japan at the time. We have integrated many such companies to create 'chemical' reactions of knowledge-exchange between Japan and the rest of the world.

Our integration of NTT Limited in 2022 greatly expanded our data center business, and since then we have been actively investing in overseas data centers. Last year, our total investment amounted to approximately ¥390 billion (or $2.498 billion), making us the 3rd largest data center operator in the world.

In the data center business, it is crucial for NTT DATA to be able to have conversations with hyperscalers like Google and Microsoft on a level playing field. Therefore, we are committed to securing high-quality, strategically valuable land for data center construction, building robust structures, ensuring quality, and maintaining a certain level of provisioning capability. Additionally, we are addressing the growing demand for AI-optimized data centers, driven by the rise of generative AI.

Solving Challenges Based on "What", Rather than "How"

When it comes to digital transformation, we often begin with technology, asking how to 'utilize data' or 'integrate AI'. These are what we call the "How." Instead, we recommend focusing on the "What": the management challenges we are trying to solve.

That is why we approach our customer's challenges from the "What," rather than starting with the "How." This ensures solutions are tailored to clients' needs, rather than introducing technology to their internal environments for its own sake.

Generative AI is a great example of the "How." While it's important for customers to understand its capabilities, real value comes from integrating company-specific data into business workflows. NTT DATA's newly launched "SmartAgent^™" generative AI service is our next step in this space.

Going forward, we see a world where businesses can take advantage of multiple generative AI "agents" with specialized knowledge in areas such as accounting, law, and sales. That is why we have developed SmartAgent^™. It will allow companies to use this technology within their business processes to maximum effect. When you need assistance, you will get appropriate, relevant, and accurate support from an array of AI agents.

At NTT DATA, we integrate the expertise of our group to analyze businesses, identify their challenges, and design comprehensive generative AI services tailored for seamless integration into business workflows.

The era where AI agents supplement specialized organizational functions is imminent. By embedding SmartAgent^™ into our customers' operations, we aim to significantly enhance office productivity. As generative AI continues to advance, it will become an indispensable tool for delivering meaningful value to end-users. In manufacturing, AI-powered robotics equipped with camera and sensor integration will also evolve. We see this as an area where our group can make a substantial impact.

Driving Innovation Through Advanced Technology Collaboration

Our innovation strategy is built on the "EGM Framework," which segments technology into three categories: "Emerging," "Growth," and "Mainstream." Emerging technologies are projected to mature within 5-10 years, Growth technologies within 3-5 years, and Mainstream technologies are already operational and widely adopted.

Sectors such as cloud computing and cybersecurity are part of the Mainstream category, where we continually refine our expertise to maintain competitiveness. Emerging and Growth technologies, on the other hand, are the focus of our global collaboration efforts.

We operate 11 Innovation Centres worldwide, engaging 220 experts to explore new technologies. In 2023, we partnered with Sky, an Italian media company, to advance applications such as digital twin technology for monitoring and managing data centres, and smart robotics to navigate complex environments autonomously.

These projects aim to create secure, efficient facilities by mirroring real-world conditions in the digital sphere. By collaborating with pioneering companies, we generate cutting-edge use cases and share insights with Japanese businesses.

Creating a Sustainable, Harmonious Society

With IT embedded in every industry, addressing societal challenges is central to our group's mission. One example is sleep technology. Through our "Food & Wellness Initiative," we established a capsule hotel near Shinagawa Station to collect sleep data. By integrating this data into our "Food & Wellness Platform," which also houses employee health metrics, we aim to foster societal health improvements through advanced analytics.

In July 2024, we launched Marble Visions to deliver satellite-based observational services. By deploying our own satellites equipped with high-resolution imaging technology, we seek to establish a robust platform supporting high-performance applications.

As I said at the Nikkei Global Management Forum, "Taking business risks is essential for societal change." While development risks must be carefully managed, embracing business risks is vital for driving progress and creating new opportunities. As a group, we are open to collaborating with like-minded organisations when our efforts require supplementation. While our company has long been strongly associated with safety and security, under the slogan "Moving forward in harmony," we also strive to be recognized as "agents of social change."

Our concept of "harmony" extends to collaboration between people, coexistence with nature, and symbiosis with technology, including robots and AI. By maintaining this balance, we aim to build a sustainable, harmonious society.

Translated by NTT DATA based on the Nikkei online advertorial.