Although the economies of some emerging nations slowed, the overall picture for the global economy generally was one of recovery: the U.S. showed signs of a sound recovery, the economic recession in Europe was bottoming out, and Japan’s economy appears headed in the direction of recovery. In this economic environment, many companies throughout the world are taking a more active business approach and are focused on further strengthening their own competitiveness. They are entering new fields and investing in growth markets and building strong and flexible ICT foundations needed to support these activities.
In accordance with NTT Com’s "Vision 2015" growth strategy and corporate slogan "Global ICT Partner," NTT Com aims to achieve consolidated revenues of over 1.5 trillion yen by the fiscal year ending March 31, 2016, including a more than twofold increase in sales from outside of Japan compared with the fiscal year ended March 31, 2011.
NTT Com designated the fiscal year ended March 31, 2014 as a year for transforming its business structure and accelerating growth to achieve its "Vision 2015" goals. Based on its "Global Cloud Vision 2013," NTT Com sought to put its growing businesses, such as global and cloud services strategies, on the right track.
In services, NTT Com strived to provide global seamless services and enhance its service lineups.
Specific measures taken by type of service were as follows:
- Cloud Computing Platforms
Using network virtualization technology, NTT Com’s private cloud service "Enterprise Cloud" launched the world’s first cloud migration service in June 2013, providing support for smooth migration from an on-premises environment to cloud networks. In October, it significantly bolstered cloud functions and performance in areas such as database clustering and high-speed storage, which customers require for broader use of cloud-based functionality in their core systems. The service opened in locations in Australia and Germany, expanding its service areas to 11 locations in nine countries/regions. For e-commerce and other kinds of websites requiring high security and large-scale access capacity, the public cloud service "Cloudn" launched the "Compute (VPC Type)" service in January 2014.
Under the "Nexcenter" brand, which was established to further improve the level of services and to standardize service quality at the global level, NTT Com commenced provision of data center services at its Tokyo No. 6 Data Center in Tokyo in April 2013, at the Hong Kong Financial Data Centre and the U.K. Slough 2 Data Center in May 2013, and at its second data center in Bangalore, India in March 2014. In addition, in January 2014, NTT Com acquired U.S.-based RagingWire Data Centers, further expanding its group of data centers in Japan and abroad.
- Data Networks
NTT Com strengthened its services that match the needs of its customers. In August 2013, NTT Com relaunched "OCN Mobile Entry d LTE 980," a service introduced in April 2013, as "OCN Mobile ONE," a mobile data communication service using NTT DOCOMO’s LTE service, offering five alternative plans based on levels of data volume and transmission speeds. To further facilitate customer access to the service, in December 2013, NTT Com became the first company to sell the service through convenience stores in Japan. In March 2014, NTT Com launched "OCN Hikari Mobile Wari," a discount plan for customers who subscribe to both "OCN Hikari Service" for home use and "OCN Mobile ONE" for use away from home.
To enhance business efficiency through integration of operations and to expand its range of services based on network virtualization technologies, in January 2014, NTT Com acquired U.S.-based Virtela Technology Services, a company with strengths in managed services and virtualization technologies. NTT Com also expanded the service area of its "Arcstar Universal One" corporate network service from 160 countries and regions to 196.
In addition, NTT Com established new connection points to its "Global IP Network" global internet access service in six cities across four countries, including Jakarta, Indonesia, in response to customer needs for a high-quality, highly reliable IP backbone.
- Voice Communications
NTT Com began supplying its "Web Directory" functionality - which allows corporate customers to manage telephone numbers and other business contact information on the cloud - to Arcstar UCaaS in April 2013, and to 050 plus for Biz in October 2013. For individual customers who use the 050IP app "050 plus," NTT Com worked to expand functions and enhance the quality of its services to make them easier to use by providing an automatic adjustment of the volume level audible to the other party on voice calls, and added the capability for "050 plus" phone app users to exchange text messages. In February 2014, NTT Com established new "Arcstar UCaaS" platforms in Europe and the U.S. to build a foundation for speedy global communications services with low latency and high reliability.
In addition, in January 2014, NTT Com acquired France-based Arkadin International, which has a global customer base and capabilities in global conferencing services and accelerated the enhancement of conferencing service functions and the expansion of its service areas.
- Applications and Content
In efforts to expand cloud services for supporting corporate customers in restructuring their work practices, NTT Com added new functionality to its "Enterprise Mail" cloud-based e-mail service, offering the option to enable e-mail access via a mobile device when away from the office under a secure external environment, and the option to link mobile with the scheduler and office-based functions. In October 2013, NTT Com added "Gridow on NTT Communications," an application that facilitates the creation and secure sharing of video content. In December 2013, it launched "Biz Password," for the integrated management of corporate user IDs and passwords, and optimal corporate SNS "Biz Groupwork," for facilitating internal and external business communications and enhancing efficiency in project management.
NTT Com also began overseas sales of "Enterprise Mail" in Taiwan in March 2014. For individual customers, NTT Com added many functions and features enhancing security and ease-of-use for its "OCN Kakeibo" free online household bookkeeping service, which became available as "Kakeibon" in December 2013. NTT Com also aggressively moved into new business areas, which included the launch of "Visual Learning.Japanese," a cloud-based Japanese-language education service, in October 2013.
- Solution Services
In its cloud migration services, where NTT Com offers one-stop services from systems consulting to design, engineering and systems migration for the transition to cloud computing, NTT Com actively promoted the globalization and increased sophistication of its services both in Japan and overseas through the provision of core systems solutions with cloud-based ERP packages.
NTT Com also revamped its security services under the new unified global brandname "WideAngle" and commenced provision of services in June 2013. Further, to ensure a seamless global expansion of NTT Com Group’s security business, NTT Com changed the name of the Integralis Group to NTT Com Security.
In sales, NTT Com accelerated its efforts at global integration through its Global Account Management Systems (GAMS), where the Global Account Manager (GAM) and National Account Manager (NAM) in each country work together to provide solutions for issues encountered by customers seeking to develop their businesses globally. Regularly scheduled Global One Meetings aimed at more advanced account plans by GAM/NAM and sales promotions based on lively communications using global integrated sales force automation (SFA) resulted in a steady increase in orders for large-scale projects.
In operations, in addition to NTT Com’s own operations, the service operations of NTT America and NTT Europe services are being undertaken by Emerio Globe Soft and Netmagic Solutions, which are also member companies of the NTT Com Group. This is helping to facilitate the standardization and automation of operations and accelerating efforts to optimize operations as a group.
In addition, to promote global seamless management, NTT Com’s ICT systems are building ERP systems that are shared globally. In October 2013, NTT Singapore began the introduction of ERP systems’ pilots program, facilitated the standardization of operational processes such as accounting and purchasing globally and integrated ICT systems. In purchasing, NTT Com also strengthened its competitiveness by cutting costs through the leveraging of global unified procurement. In personnel management, NTT Com continued its efforts in global human resource development by continuing to hire foreign nationals and increasing the number of trainees, including recent graduates.
In security management, NTT Com made efforts to enhance the level of its security-risk management by undertaking a company-wide audit of its ICT systems, addressing software vulnerabilities, applying "WideAngle" integrated risk-management services to ICT systems throughout the company and putting in place measures to mitigate security risks. NTT Com also enhanced its incident-response processes by integrating management of its company-wide ICT systems using the Information Security Management Platform (ISMP) for providing information on determining security vulnerabilities.
During the fiscal year ended March 31, 2014, the development of global seamless services and sales and optimization of operations resulted in NTT Com receiving high assessments in comparative reports on vendors by analysts. NTT Com was even described as a "leader" in the field in the U.S.-based Gartner report on the assessment of global network service providers, and in the U.S.-based IDC report assessing cloud and DC services in the Asia-Pacific region.
Although revenues from the cloud computing platforms business unit increased 10.9 billion yen (26.2%) over the prior fiscal year to 52.9 billion yen and revenues from the solutions services increased 23.1 billion yen (18.1%) over the prior fiscal year to 150.6 billion yen, data networks revenues decreased 12.1 billion yen (3.0%) over the prior fiscal year to 391.5 billion yen and voice communications revenues decreased 21.6 billion yen (6.8%) to 296.4 billion yen. As a result, NTT Communications’ total non-consolidated operating revenues decreased 0.7 billion yen (0.1%) over the prior fiscal year to 944.0 billion yen.
Total operating expenses increased 3.8 billion yen (0.5%) to 830.5 billion yen due to an increase in costs associated with the solutions services business of 25.4 billion yen (6.3%) over the prior fiscal year to 426.0 billion yen and a decrease in communication network charges of 9.3 billion yen (4.4%) over the prior fiscal year to 204.1 billion yen as a result of the impact of lower voice communications revenues, among other things.
As a result of the above, operating income decreased 4.6 billion yen (4.0%) over the prior fiscal year to 113.4 billion yen. Net income increased 23.6 billion yen (36.2%) over the prior fiscal year to 88.9 billion yen, due to a 16.1 billion yen extraordinary gain on the sale of real estate, in spite of recording a 6 billion yen extraordinary loss from the stock valuation of NTT Communications’ overseas subsidiaries.
NTT Communications Group’s consolidated operating revenues increased 35.7 billion yen (3.0%) over the prior fiscal year to 1,230.4 billion yen, the first increase in six years, due to the strength of its overseas subsidiaries as well as a smaller decrease in NTT Communications’ non-consolidated revenues. In addition, operating income increased 11.6 bill billion yen (9.9%) over the prior fiscal year to 127.9 billion yen.