EDS and NTT to pool IT, network services

MIAMI — IT services provider Electronic Data Systems and Japanese long-distance and Internet service provider NTT Communications (NTT Com) are partnering to approach clients in Japan and elsewhere, the companies announced Monday.

The companies are deciding which industry segments to target and developing joint packages of IT and telecommunications services, including colocation and hosting, the companies said.

EDS, in Plano, Texas, is the world’s second-largest provider of IT services, while NTT Com, in Tokyo, is a long-distance and data communication subsidiary of Japan’s incumbent telco Nippon Telegraph and Telephone (NTT) Corp. NTT Com’s NTT/Verio group provides Web hosting and IP services, including colocation, Internet access, e-commerce, security and virtual private networking (VPN).

The partnership could let NTT Com offer more sophisticated hosting services, especially of software applications, while EDS gains another partner specializing in telecommunications and network services to complement its relationship with bankrupt WorldCom Inc., said Melanie Posey, an IDC analyst.

IT service providers and telecommunications providers have always partnered, but their collaborations have traditionally been ad-hoc affairs to serve a specific client in a specific project, Posey said. Now these companies are increasingly creating formal joint agreements to go to market and generate new business together, she said. This makes their relationship more of a business practice and thus gives the partners additional business opportunities beyond specific clients, which speeds up the sales pipeline, Posey said.

“They see some advantage in formalizing what had traditionally been individual-case ventures to go to market together,” Posey said.

Meanwhile the partnership with NTT Com is expected to boost EDS’ outsourcing business in Japan, said Kristin Dobrowolski, an EDS spokeswoman. “We see tremendous possibilities for outsourcing in the Japanese market,” she said.