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Wheelings & Dealings: NTT Swallows Virtela

By Doug Barney

A deal long in the works in now completed as NTT officially owns MSP Virtela Technology Services. NTT Communications is an ICT division of the larger Japan-based NTT.

“Customers of both companies will benefit from the resulting, enhanced portfolio,” said Akira Arima, CEO of NTT Com. “Leveraging advanced virtualization technologies, such as Network Functions Virtualization (NFV), features such as firewall, WAN acceleration and SSL remote access will be delivered from network cloud. Furthermore, these features are automated for on-demand activation and configuration, helping enterprises save capital and operating expenses. These features are planned to be available to NTT Com customers starting Q2 2014.”

The larger entity can now offer a broader array of services running on a global network, including Internet and hybrid MPLS networks that offer a fast on-ramp to cloud services.

“Many of our customers and partners request total ICT solutions. Leveraging NTT Com's broad service portfolio together with Virtela's asset-light networking, we will now be able to offer more choices and a single source for all their cloud computing, data networking, security and voice service requirements,” said Virtela President Ron Haigh. “Together, our advanced global infrastructure enables rapid innovation and value for more customers around the world while strengthening our leadership in cloud-based networking services.”

Virtela has a broad range of telecom, network, and service offerings that are currently in use in over 190 countries. Best experts’ estimates say 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) 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 percent savings in ongoing operating expenses.”

WAN Optimization Foothold

With the buyout of Virtela, NTT gains a nice position in WAN optimization. In fact, the company landed in Gartner’s 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 Cloud, HP Cloud and IBM Cloud) application delivery,” Gartner says, adding the company backs the service 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.

Moving to the negative, Virtela is not that well known, though truth be known, its service is often white labeled.

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

Two for One

NTT didn’t just buy Virtela. Late last year it shelled out some $880 million to take over two US-based cloud concerns. Besides Virtela, NTT bought an 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.

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. 




Edited by Cassandra Tucker

MSPToday Editor at Large

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