Good morning,
I grew up in an era when Japan was cast as America’s leading economic rival, from Toyota transforming production methods to Mitsubishi buying Rockefeller Center, which they later sold at a loss. Now, it more often grabs headlines for its shrinking population, economy, and exchange rate that’s made tourism a booming industry. (One wonders if China will follow a similar trajectory.)
But Japanese companies have also been on the front lines of digital transformation, from EVs (Nissan/Toyota) and semiconductors (Toppan) to retail (Rakuten) and recruiting (Recruit). The investments of SoftBank’s Masayoshi Son have made him one of Japan’s richest men, though he did miss out on a $155 billion payday by dumping his 5% stake in Nvidia when it was worth about $4 billion.
Another company that’s quietly gaining traction is NTT Data. I recently met with Abhijit Dubey, who was appointed CEO of its global operations last week, leading 150,000 employees in an IT services business that generates $18 billion of its $30 billion in revenue outside Japan. We talked about a range of topics from advances in photonics-powered data centers that use light to transmit data instead of electrical signals to how the company is helping clients transform their businesses with AI. Says Dubey: “Applying AI in your core operations is significantly harder than applying AI on a function.”
The biggest challenge for Dubey right now may be getting NTT Data on the radar of potential customers. NTT, or Nippon Telegraph and Telephone Corporation, was established in the aftermath of WWII as a state monopoly that displaced AT&T in running the country’s telecommunications system. The company was later privatized, and NTT Data was spun off, reorganizing as a holding company dividing the domestic and international operations. NTT is a familiar brand but not one that I associate with services that compete with, say, Accenture, TCS or Infosys.
It helps to have a strong presence in India, where NTT Data is powering a substantial part of the digital infrastructure. Its work with the U.S.'s IndyCar series may help, too. Building brands in new markets is hard. Certainly, it could be a plus to have roots in Japan’s long-held business philosophy of continuous improvement (Kaizen) and selfless service (Omotenashi)—or a challenge coming from a culture traditionally associated with lifetime employment and homogeneity at the top.
That’s changing, as Japanese companies like NTT have been especially active in M&A activity to grow their global footprint. In the meantime, Dubey is getting out there. “We have to work towards preeminence,” he says. Right now, as the new head of a reorganized global operation, his first task may be getting people to simply know who they are.
More news below.
Diane Brady
diane.brady@fortune.com
Follow on LinkedIn
