CEO Spotlight: Abhijit Dubey and NTT Ltd – building one of the top global technology services giants
The importance of investing in research and development is a strategy that enables companies to constantly look for new ways to improve their services. Today we interview the CEO of NTT Ltd., Abhijit Dubey. With a background working in Silicon Valley, he stands out among others as a strong advocate for innovation.
NTT Group is a Japanese multinational telecommunications and information technology company headquartered in Tokyo. NTT Ltd. is a leading IT infrastructure and services company within the larger NTT Group, offering a wide range of services such as network, cloud, and data centre services.
Let’s start with you. Tell me your professional history and something about yourself.
I was born and grew up in the eastern part of India but have now lived and worked in 4 continents. My undergraduate studies were in India, at the Indian Institute of Technology, in Mumbai (Bombay). After that I spent a few years at Schlumberger, an oil field services company. As a wireline field engineer, I spent most of my time carrying out oil exploration in the Northern Saharan desert in Algeria. Subsequently, I attended Graduate School at Stanford before a career of almost 21 years at McKinsey on the West Coast of the US. Almost all my work at McKinsey was in the technology practice, across a whole range of strategic and operational projects. I started their cloud practice back in 2004, which I ran globally for a while in addition to the software practise in North America. I had been a senior partner in the Firm for several years before I joined NTT Ltd.
NTT Ltd. is a $10 billion IT infrastructure and services company. The company operates in about 57 countries and employs around 35,000 people globally. We recently announced a merger with our sister company NTT Data and are currently going through the merger process. In this process, we’re creating a $30 billion IT services and infrastructure company, of which about $11 billion comes from Japan, and the balance – $19 billion approximately – outside of Japan. We serve 65% of the Fortune Global 500 and more than 75% of the Fortune Global 100. This makes us one of the largest IT services and infrastructure players globally.
Let’s focus on an overview of NTT Group. How has the company evolved over the years and how has the business sector where NTT works evolved over the years?
Great question. Maybe a little bit of background on NTT Group could help to better understand. NTT Group is a ~ $110 billion Japanese conglomerate. It has been around for more than 150 years, and it originally started in Japan as the local telegraph and telephone company. The latest expansion outside of Japan started in 2007 with acquisitions of different small, mid-size, and large IT services and IT infrastructure domains that created a very broad and deep portfolio.
In order to turbocharge growth on a global scale outside of Japan, and to create a more seamless and powerful value proposition for our clients, NTT decided a few years ago to start consolidating all these different companies that have been acquired into a single global company. The first step of that consolidation happened in 2019 with the creation of NTT Ltd., where all the infrastructure and IT services assets were put together in one company. The second step was announced recently: the merger with NTT DATA. The result is that now we have a single global operating company.
As part of NTT DATA, the $30 billion revenue company, we focus on mostly two things. The first business is about powering the digital infrastructure for the world. We are one of the largest data centre and submarine cable providers in the world and we also operate substantial IP backbone capacity in the world. If you put all those assets together, you can understand how much internet traffic passes through us. All of this is a capital-intensive business, and we invest around $3 billion every year. The second business is a full stack of Enterprise IT services. Like some of our competitors in the industry, we provide full lifecycle services (consulting, systems integration, and managed services) across network and connectivity, security, cloud and applications, AI and analytics. We also have strong practices on SAP modernization on public cloud and private cloud, cloud native application development and product engineering.
All of this makes NTT unique in the marketplace. We’re the only such company that exists in the world with the portfolio – this range of technology and services – that we have.
How did NTT Group choose this specific market differentiation or segmentation?
In terms of global expansion, NTT took two parallel paths: the capital expenditure intensive path and the IT services path. The first one was expanding much more on the infrastructure side, so taking a lot of the capital investments from Japan and globalising them, and that’s where the data centre business, the IP backbone business, the submarine cable business, came from. The second one was around enterprise IT services and there were many acquisitions that were made in that domain in order to build it up. Now it’s all part of one single global company because the capital expenditure intensive investment was being done in Japan, and we needed to do it globally to power the digital infrastructure and similar for the IT services business. The overriding reason why NTT is expanding globally is because growth opportunities are limited within the Japanese context, similar to many other Japanese companies. For this reason, NTT decided to pursue growth by expanding the global business outside of Japan.
What is the role of NTT Holdings?
NTT Group is a conglomerate. There is a Holdings company structure with NTT Holdings at the top and then many independent operating companies underneath. Most of these companies are 100% owned by NTT Holdings. The others are majority owned by the holding company with the rest being publicly traded.
The role of NTT Holdings is threefold. First, providing financial targets to the operating companies. Second, is the capacity to provide capital where needed. Last is the $3.5 billion investments that NTT Holdings makes every year in research and development. From this, all of the operating companies benefit. For instance, one such investment is called “IOWN”. This project is effectively developing the next generation all photonics network and, if successful, it will truly revolutionise the Internet!
Can you explain this “IOWN” strategy? How could it revolutionise the Internet?
The world is approaching the limits of current generation communications and computing infrastructure technology. Power consumption, data bandwidth and speed requirements are growing exponentially putting increasing pressure on networks, computing platforms, and energy grids. Innovative Optical and Wireless Network (IOWN) will pave the way to a more sustainable future by addressing these challenges.
IOWN is an initiative for future communications and computing infrastructure built around photonic technology, which includes silicon photonics, edge computing, wireless networks, and distributed computing, for ultra-high capacity, ultra-low latency, and ultra-low power consumption.
With a focus on sustainability – overcoming environmental, technological, and economic limitations to existing infrastructure for future growth – IOWN will change the way everything and everyone interacts and connects.
Through the IOWN Global Forum, NTT is working with more than 100 partners to accelerate this truly transformational concept that will help build the communications and computing infrastructure of the future — the next internet.
How does this global company strategy work in consideration with the independent companies?
The big strategies are mostly oriented around what we are going to do in the domestic Japan market and for global expansion.
Global expansion is taken care of by NTT DATA because that’s where the global business operates and then the domestic strategy is led by NTT DOCOMO, the telecom arm, and other companies that operate in the domestic area.
Then there are other companies that act more like incubators. NTT starts them either within existing businesses like DOCOMO or creates new independent companies.
There’s a reason NTT’s main focus is innovation. Compared to other large organizations NTT takes a rather long view of things. It has more of a “technology for good” philosophy and is always looking to innovate and solve real-world problems.
For example, NTT invented the emoji – a true catalyst in the evolution of language and communication. We will soon be breaking ground on a new subsea cable system with greater capacity and faster speeds. We’re developing new methods of encryption in anticipation of quantum computing, and our scientists are working to develop the world’s first bio digital twin.
Which are the values of the global company?
NTT’s overall philosophy has always been much more about technology for good. There’s a lot of focus on how we can use the capabilities of technology innovation and technology systems integration to do good, not only for our clients, but also for society and for the communities that we operate in and for the planet.
While other companies are starting to talk about it now, NTT has been doing that for many years as part of its philosophy. Although NTT is not the only Japanese company that takes this matter to heart, it has done it for a long time.
This way of thinking has been quite an interesting learning point. As mentioned in an article I just published in Forbes and a few other places, my 20 plus years background in Silicon Valley has blended with the very rich Japanese heritage and a different management philosophy within NTT in order for me to create a totally personal and new management approach in the spirit of this philosophy.
Listening to your words, a question arose for me. Perhaps it is more a curiosity. How is it to be the CEO of one of the most important companies in the world?
I think it’s an incredibly exciting thing because of the opportunity for impact but also challenging, due to the responsibility and the obligations you have as a leader. The excitement comes from the ‘North Star’ purpose the company has, which is around technology for good and what we can truly do and accomplish for our clients. It’s a very different model in the sense that it makes you take a very long-term perspective on things: a luxury for a CEO in this day and age to have that. We still have the usual pressures around delivering quarterly results, but we couple that with the long-term perspective, which I think it is quite unique in the landscape. To summarise, I’ve been here for 2.5 years, and it’s been an incredibly exciting journey, a great opportunity to learn and truly create a relevant and impactful company. The challenge that NTT has, in full transparency, is that it is not very well known outside of Japan. Despite all the assets, the capabilities, the breadth and depth of the portfolio, the fact that we are among the top five IT players in the world is not something that is well known, and we are working on changing that!
You focused the attention on the strategies that you have applied in these years. What about the future? What is the strategy for the next few years for the company?
I think its continuing to expand the company globally I believe that if you look at NTT Group, the biggest source of growth is going to come from the global business of NTT DATA for the entire group, that is a $30 billion company. The strategy is to continue global expansion in IT infrastructure and enterprise IT services spaces that we already are in, and that’s going to come in both organic and inorganic forms.
What about other sectors? Have you ever considered to expand the company in another different sector?
I don’t think that’s in the consideration right now. That doesn’t mean that the NTT Group may not decide later to do something different. I think it’s publicly known that the first attempt and globalisation of the NTT Group was the consumer mobile space in the early 90s. Now we are much more focused on enterprise and infrastructure, with a very successful result. We started this in 2007 and now we are in 2023: in that 16-year period, global business outside of Japan has grown from almost nothing to nearly $20 billion which is quite impressive I think, and we will continue to look at all the different growth opportunities in the sectors we operate in.
We also have huge investments going on in our data centre business and we are innovating a lot on the connectivity side of things. In particular edge connectivity in terms of private 5G, IoT, edge computing, etc. We’re investing in all the growth opportunities around cloud product engineering, product development, applications, industry platforms and of course, AI and generative AI.
We’re investing in emerging technologies, creating hugely strategic partnerships with many of the well-known established technology vendors, such as Cisco and Microsoft, and developing new ecosystems.
Written by Riccardo Pandini.
The ability to expand shown by NTT Group in recent years has revealed a very clear and functional strategy. A global vision to grow and increase its value, without forgetting the attention to details required by the local contexts.
During this interview, Abhijit Dubey showed me his humble and innovative vision, two characteristics that surely have been the key to his leadership role.
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