NTT expands data center, cloud to US with acquisition

The acqusition of Virtela will double NTT's data center space in the US

Japanese NTT Communications has acquired Virtela Technology Services and a majority stake in RagingWire Data Centers as part of its worldwide data center and cloud push.

Telecom operators all over the world are doing are doing their best to compete with the likes of Amazon Web Services for enterprise spending on hosted services and data center capacity, and NTT is no different.

It has acquired about 80 percent RagingWire for US$350 million. The acquisition will more than double NTT Com's data center space in the U.S., enabling the company to respond to what it said is a high demand for data center services in North America.

RagingWire has 650,000 square feet of data center space at its campuses in Sacramento, California, and Ashburn, Virginia, which are currently being expanded. The company has also begun the construction of a 150,000 square foot data center in Sacramento, and will soon break ground on a 78-acre plot of land in Ashburn. RagingWire has also developed technology to offer more cost-effective data center redundancy, NTT said.

RagingWire's founders and management team will continue to operate the company under the RagingWire brand and maintain a minority interest.

The U.S. market for data center services -- which accounts for more than 50 percent of global demand -- has roughly doubled between 2010 and 2013, according to NTT.

NTT has also agreed to acquire all of Virtela for about $525 million in cash in order to get its hands on the Denver-based company's infrastructure and services. The company offers services to improve the response times of hosted applications. It also has a large portfolio of cloud-based security services as well as network virtualization expertise.

The deal expands NTT's global network services coverage from 160 to more than 190 countries or regions, and combined services will arrive next year.

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Tags Mergers and acquisitionsbusiness issuesNTT Communications

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Mikael Ricknäs

IDG News Service
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