From The Expert Feature Article
October 28, 2013

A Japanese Cloud Invasion

The cloud is an international market, one that Japan clearly wants a bigger piece of. So, today, October 28th, NTT (News - Alert) Communications shelled out some $880 million to take over two US-based cloud concerns.

The simultaneous deals include the full buyout of Virtela and an 80-percent stake in RagingWire Data Centers. The deal, however, pales a bit in comparison with the over $21 billion buyout of Sprint (News - Alert) by Japan-based Softbank.

Virtela has a broad range of telecom, network, and service offerings that are currently in use in over 190 countries. There are only 196 countries on earth, so that’s pretty darn good.

Virtela’s reach is largely through partners. With the help of over 1,000 network providers, the company has a truly global network where services are delivered through both the Virtela Enterprise Services Cloud (ESC (News - Alert)) platform and the Virtualized Overlay Network.

“This eliminates the complexity and expense of having multiple networking devices at each customer branch office,” Virtela said. “By enabling the transition of branch office IT services to the cloud, Virtela gives enterprises the benefit of an “asset-light” software-defined networking model that delivers 80-percent cost savings in upfront capital and 30% savings in ongoing operating expenses.”

The other deal is the 80-percent stake in RagingWire Data Centers. The $85 million a year company sold that stake for $350 million. With the buy, NTT’s U.S. data center U.S. footprint will basically double.

“We are rapidly expanding our capabilities to provide cloud and telecommunications solutions worldwide and the deal with RagingWire is critical to increasing our overall capacity, providing data center infrastructure management tools which enhance our colocation service’s reliability and efficiency. RagingWire leads the data center industry in availability, innovation, and customer experience, and will enhance our global cloud solutions significantly,” said Akira Arima, CEO of NTT Com.

NTT Switches Gears

For NTT, voice has long been a cash cow, but these revenues are declining. To pick up the slack, NTT is planning to double its cloud revenue by 2016.

NTT sees huge opportunity, especially in the U.S. The company says that the U.S. makes up half the global cloud market and that this demand doubled over the last three years.

WAN Optimization Foothold

With the buyout of Virtela, NTT gains a nice position in WAN optimization. In fact, the company landed in Gartner’s (News - Alert) Magic Quadrant for this technology.

WAN optimization is just one of Virtela’s businesses. It also has mobile device management, security, transport and managed networks.

With this range of wares, Gartner believes Virtela may be appropriate for enterprises wanting to outsource the whole wide area network shebang.

What makes Virtela magic?

“Virtela provides a comprehensive product offering for enterprise branch and cloud-based (including Amazon Elastic Compute Cloud [EC2], Rackspace (News - Alert) Cloud, HP Cloud and IBM Cloud) application delivery,” Gartner says, adding that the company backs its services with performance-based SLAs.

Speed is also of Virtela’s essence: “Virtela's offering provides the ability to rapidly deploy services (in minutes) for cloud-based services in 190 countries worldwide,” Gartner said.

On the other hand, Virtela is not that well known, though its service is often white labeled.

In 2010, Virtela received the Communications Solutions Product of the Year Award from TMC.

Edited by Blaise McNamee