NTT to Buy Dell’s Perot IT Services Business

Dell selling services unit at a loss as it prepares to close blockbuster EMC deal

Yevgeniy Sverdlik

March 28, 2016

2 Min Read
NTT to Buy Dell’s Perot IT Services Business
Dell CEO Michael Dell speaking at a conference in San Francisco in 2013 (Photo by Justin Sullivan/Getty Images)

NTT Data, a subsidiary of the Japanese giant NTT Group, which also operates an extensive global data center network, has agreed to acquire the IT services business of Dell, the companies announced Monday.

The buyer said it will integrate Dell Services, a business Dell gained when it acquired a company called Perot Systems for $3.9 billion, in its IT services and business process outsourcing division. Once closed, the deal will substantially increase NTT Data’s presence in North America, an expansion tactic other NTT subsidiaries have applied consistently around the world.

The acquisition price is about $3.1 billion, the New York Times reported citing a regulatory filing by NTT Data with the Tokyo Stock Exchange.

Dell is in the midst of a $67 billion acquisition of EMC, and the sale of its services business is likely a move to raise money for that deal.

Dell Services data centers will become part of NTT’s global platform hosted in about 230 data centers around the world. The Dell division has data centers in the US, UK, and Australia.

Along with additional services capabilities and infrastructure, NTT gains a plethora of big-name customers through the acquisition. Dell Services recently trumpeted new customer wins, including American Express and Blue Cross & Blue Shield, and customers it has been serving since earlier, such as Gap, Hilton, and Staples, among others.

One of the new customers is Dubai Health Authority. The Dubai government recently enacted a mandatory health insurance law, according to Dell, and the company is helping DHA modernize its IT infrastructure to process health insurance claims more efficiently.

NTT and its various subsidiaries have been investing heavily in international expansion, with particular focus on data center providers. Data center companies NTT acquired in recent years include US-based RagingWire, India’s NetMagic, UK’s Gyron, Germany’s e-shelter, and Indonesia’s PT Cyber CSF.

NTT has spent about $550 million on acquisitions outside Japan since 2011, according to Bloomberg. Its revenue outside Japan has increased steadily over the last 10 years, going from almost none in 2006 to more than $400 million last year, according to Bloomberg.

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