NTT Data, the services arm of Japan-based NTT Group made news last month when it announced that it would acquire Dell Services for just over $3 billion. The deal marked a big push into public sector for NTT. Dell Services, formerly Perot Systems, has a long track record of serving government clients at all levels and will be fully integrated into NTT’s data group.
“What we want to do is become a fully global company and be a top systems integrator worldwide,” said Tim Conway, president, public sector, NTT Data in an interview with CivSource of the deal. “Acquisitions are definitely part of our strategic plan to do that.”
With the deal, which is expected to close later this year, NTT will be able to grow its business processing capabilities especially in healthcare and insurance which are key areas of expertise for Dell. Dell originally acquired Perot Systems in 2009 for $3.9 billion. The company was founded in 1988 by Ross Perot and the subsequent acquisition by NTT is the company’s largest deal to date.
By shooting for the systems integration space within public sector, NTT joins the ranks of several large incumbents like Accenture, which already have a significant market share. Conway says, however, that NTT has an edge over these companies because of the culture NTT Group brings to the market. “Because we are part of NTT Group we will be able to leverage the other pieces of the company including a significant research and development operation.”
That position is somewhat unique within the government contracting space which has been focused on consolidation of late. Last year CSC spun off its public sector unit, and SRA International merged with CSGov to create the largest federal prime contractor – just to name a few deals, but Conway seems unphased. “We’ve seen a lot of pure-play federal deals in the market lately,” Conway adds. “That may make sense for some of those companies, but we want to be able to bring new technologies in and have a range of tools at our disposal.”
Conway adds that none of the public sector clients served by either Dell or NTT Data overlap, so there will be opportunities to bring new services to existing clients. NTT Data is already working with several agencies at the federal and state levels to help them modernize technology systems and implement technology development principles like agile.
NTT has been working with the U.S. Citizenship and Immigration Services as it has transitioned to an all agile environment – a move which helped the agency win an award this week from the American Council for Technology and Industry Advisory, for its new online immigration services portal. At the state level, NTT is also working with agencies like the Texas Department of Transportation, which recently outsourced almost all of its IT operations to the company. The company has been working with TXDOT to streamline and modernize operations statewide.