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In an interview with Bibhu Ranjan Mishra, Dell Services’ president Suresh Vaswani and NTT Data’s chief operating officer Robb Rasmussen explain how this deal will position NTT Data as one of the top 10 IT services firms in the world and how India, as an offshore base of both the firms, would assume more significance in the days to come. Excerpts:
How significant is this deal for Dell Services?
Vaswani: We have done a lot over the past three or four years and built a very strong management team to take the business to the next level. We have seen consistent deal wins. Last year alone, we had some outstanding wins both in the application (development) and infrastructure (management) areas such as Dubai Health Authority (DHA) and Blue Cross & Blue Shield of Rhode Island (BCBSRI). Competing with many global players, we signed with marquee brands such as American Express, Bombardier, Harvard Pilgrim Health Care, Markit and Thermo Fisher Scientific. We have added unique capabilities in the areas of digital business services, cloud and domain capabilities in areas of health care and banking. For this business to go to its next phases of evolution, we think the acquisition by NTT Data will play as a catalyst. With this, NTT Data will become one of the top 10 IT services companies in the world.
What kind of capabilities does Dell Services bring to NTT Data?
Vaswani: The capabilities and the practices that we have at Dell Services are very complementary to NTT Data, so is the customer base. So the combination of Dell Services with NTT Data will make it even stronger. So, we are going to be a very powerful force in the IT services industry.
Rasmussen: From the NTT Data perspective, the NTT Group is around $105 billion. The service component of NTT Data, which is doing this transaction, is around $14 billion. And, we have set an aggressive outlay to grow our services business outside of Japan where we are a dominant player. This (acquisition) would really help in accelerating our growth. The strengths that both the companies have are very complementary to each other and there is a minimal client overlap. So, this acquisition is really about growth for both of us. We think it is a win-win.
Can you please share some details about the integration plan?
Vaswani: We have just announced the transaction and the closure is at least four to six months away. So, till that time, we will operate as independent companies. As we go through this period, we will of course think of the most optimal way to work with NTT Data services when the transaction is closed. We will start thinking of integrated structures. However, nothing will change as far as customer attention is concerned. Internally, how we organise ourselves is a decision which would be taken over the next four to six months.
What will be the combined strength of NTT Data’s staff base?
Rasmussen: NTT Data has around 80,000 employees. Dell Services brings an additional 28,000 employees. Until the final closure of the transaction, we will operate as separate companies. But, it’s important to note that it will be a team effort over the next four to six months on devising the most optimal structure to run our combined businesses.
The offshore delivery strength of the combined entity in India?
Rasmussen: NTT Data has around 20,000 employees in India and Dell Services about 13,000. So, we will potentially double our presence in India with an employee base of over 30,000.
When you go for integration, will it result in retrenchments or layoffs?
Vaswani: There will be no employee retrenchment. As we said earlier, this is the acquisition of complementary capabilities and customers. This is all about growth, not about retrenchment.
Are you going to leverage the offshore capabilities in India more?
Vaswani: Both organisations have significant presence and development centres across India. The combined entity will have an even larger footprint and we would certainly leverage the India base more as we drive more growth and more value for our customers.
What about the senior management at Dell Services? Will all of them transit to NTT Data?
Vaswani: The services business is a people business. So, NTT Data has acquired not only the company and customers but also the people of the business. With the great talent that we have built up at Dell Services, NTT Data would like to have all of them as a part of the business.
It’s a little too early to talk about specifics because we’ve just announced the acquisition. We’ve got to figure out the right organisation structure. But, by and large, most people will be a part of NTT Data.