Strong Growth in Global Cloud Services

Transcription

1 Strong Growth in Global Cloud Services In its Medium-Term Management Strategy, Towards the Next Stage, the NTT Group announced the concept of working to become the Value Partner that customers continue to select. The strategy also positioned Global Cloud Services as the future growth driver of the NTT Group and included the objective of $20.0 in overseas sales by the fiscal year ending March 31, This special feature explains the steps taken by the NTT Group to strengthen its Global Cloud Services and the progress of those initiatives. Applications / Solution Services Managed ICT Services Feature: Contents Full Lineup of Cloud Services from the NTT Group 024 Further Bolstering the Scope and Depth of Our Business Operations 025 The Unique Strengths of the NTT Group 026 Overseas Sales Leading Growth in the Group s Top Line 028 Data Centers / Networks Steps Taken to Strengthen Scope and Depth in the Past Year NIPPON TELEGRAPH AND TELEPHONE CORPORATION ANNUAL REPORT

2 : Strong Growth in Global Cloud Services Value Proposition Initiatives Full Lineup of Cloud Services from the NTT Group Cloud services comprise applications / solution services, managed ICT services, and data centers / networks. The NTT Group provides a full lineup of services that meet customer needs at each of these layers, from advisory services for the customer s migration to the cloud to management services after the migration is completed. Initiatives Further Bolstering the Scope and Depth of Our Business Operations To provide higher quality cloud services to customers, the NTT Group is working to further reinforce the footprint of its operations, which indicates the scope of its business fields, as well as the depth of its operations, which indicates its ability to provide solutions in those fields. To that end, the Group is implementing transactions. Global Cloud Business Promotion System Overview and Purpose of Major Transactions in the Past Year Cloud Services Corporate s Advisory Services Migration Services Operational Services Management Services Applications / Solution Services Managed ICT Services January 2014 December 2013 * In May 2014, the consolidation of Optimal Solutions Integration into the NTT DATA brand was completed. * The acquisition of the everis Group has expanded our footprint. Through this transaction, we acquired a robust business foundation in Spain and major countries in Central and South America, and we strengthened our comprehensive solutions provision capability from upstream to downstream. The everis Group has near-shore and offshore development bases, and we still strive to use those assets to increase our price competitiveness and service quality. In North America, we brought Optimal Solutions Integration, which has advanced skills and abundant training in the SAP fi eld, where we expect to see strong demand growth, into the NTT Group. Going forward, we will expand our fi elds of business to include the provision of SAP services to the public sector, retail, distribution, and other entities. Data Centers / Networks February 2014 In Europe, we acquired NextiraOne, which has technological strengths in unifi ed communication and collaboration services. NextiraOne s technologies will strengthen Dimension Data s ICT service provision capabilities, leading to a larger market share in Europe for the NTT Group. R&D Applications / Solution Services Approximately 42,000 employees in 175 cities in 41 overseas countries provide a wide range of services to the customers of the NTT Group. These include system Integration (SI) services, such as corporate ICT system planning, design, development, construction, installation, maintenance, and operation; outsourcing services, such as business process outsourcing (BPO); and application services using SAP, Oracle, and other applications. Managed ICT Services The NTT Group provides a wide range of ICT services in an end-to-end manner. These range from network integration (NI) such as design for network construction and the installation and set-up of communications equipment to IT outsourcing (ITO), including monitoring, maintenance, and operation of networks after they are put into operation. Data Centers / Networks Data centers are an extremely important operational platform for the provision of cloud services to corporate customers, and the NTT Group is in the top ranks worldwide in terms of server room fl oor space. We operate more than 250 data centers around the world, and we provide colocation services, which entail the provision of data center space, as well as hosting services, under which we provide sets of equipment and space. In addition, the NTT Group s global base of corporate customers extends to more than 10,000 companies in 196 countries and regions around the world. As a world-class global IP backbone operator, the Group provides IP-VPN and other data communications networks as well as global network services, such as Internet access. At NTT Laboratories, we are enhancing high-value-added technologies, such as cloud migration support technologies and security management technologies. In this way, we are working to differentiate our cloud business services. April 2014 January 2014 January 2014 Approach to Transactions in the Future In the United States, we acquired Nexus IS, which provides advanced ICT services. As a result of this acquisition, Dimension Data s presence on the west coast and southeastern regions of the United States have been substantially enhanced, and the scale of our operations in the United States as a whole has been increased by about 40%. In addition, it will now be possible to provide customers with a wider range of more specialized services. Through the acquisition of RagingWire, a U.S. data center operator, NTT Communications data center fl oor space in the United States has doubled from about 20,000 square meters to about 43,000 square meters. Moreover, RagingWire has know-how related to effi cient data center facility design and operation, and moving forward we will apply that know-how to other data centers. We also acquired Virtela Technology Services, which has strengths in network virtualization technologies. Through this acquisition, the area in which NTT Communications provides network services to corporate customers has expanded from 160 countries and regions to 196 countries and regions. Moving forward, we will draw on the advanced, highly effi cient operational know-how of Virtela Technology Services to further enhance the quality and competitiveness of our global network services. We will implement transactions that expand our footprint of our business fi elds, strengthen our ability to provide services, and enable us to leverage synergies on a Groupwide basis in building new business models. 024 NIPPON TELEGRAPH AND TELEPHONE CORPORATION ANNUAL REPORT

3 : Strong Growth in Global Cloud Services Advantages The Unique Strengths of the NTT Group Total solutions that leverage the distinctive strengths of a telecommunications carrier NTT s Cloud Technologies Advanced by R&D Cloud Migration Support Technologies In migrating from an on-premises environment to the cloud, corporate customers have a variety of concerns, such as to what kind of cloud they should implement the migration, what the procedures will be, and if they will be able to operate in a safe and secure manner. In response, we provide services that address those concerns. These services utilize technologies to analyze the customer application profi le (current), identify those applications that can be migrated to cloud services, and support the formulation of a migration plan, as well as application migration automation technologies. The Distinctive Strengths of Carrier Cloud The NTT Group includes telecommunications carriers, and this is a major strength in comparison with many other cloud vendors. The unique advantages of carrier cloud include seamless connections to the cloud using optical fi ber, which is an existing asset for carriers, and integrated control of service performance and stability. The NTT Group s data center in Hong Kong, which is operated by NTT Communications, succeeded in reducing the time required for a signal to travel between Tokyo and Hong Kong by second through the use of a fi ber-optic submarine cable linking Japan and Hong Kong. This achievement has been highly evaluated by customers in the fi nancial industry who conduct ultra-high-speed transactions. To meet future growth in demand, in 2015 we plan to further expand the fl oor space of this data center, which is already one of the largest in Hong Kong. At each layer applications / solution services, managed ICT services, and data centers / networks industry analysts have given the NTT Group high evaluations that place the Group in the top ranks worldwide. The NTT Group includes leading companies in each of these fi elds, and those companies mutually leverage their service provision capabilities and customer bases to generate synergies. In this way, the Group is further enhancing its ability to provide total solutions. Hybrid cloud services, which combine on-premises private clouds and public clouds, are a good example. The system linkage between the private and public clouds requires advanced provision capabilities at each layer as well as cooperation among the service providers. Consequently, our ability to draw on our full lineup, from applications to infrastructure, in the provision of total solutions is a major strength. Hong Kong Financial Data Center High reliability at Tier IV level, the highest quality level in the world The data center has an ideal location near the Hong Kong stock exchange data center, high security, and a low latency network. Total Solutions Provided through Leading Companies at Each Layer Key Aspects of Global Cloud Services Leader s Quadrant Gartner s Magic Quadrant for Communications Outsourcing and Professional Services* Leader s Quadrant Gartner s Magic Quadrant for Global Network Service Providers** World-Class Global IP Backbone (Traffic volume (Source: Renesys Corporation)) World-Class Data Centers (Server-room floor space: million square meters (as of the end of March 2014)) Salesforce.com s Platinum Cloud Alliance Partner Dimension Data NTT Communications NTT Group NTT Centerstance NTT DATA * Source: Gartner, Magic Quadrant for Communications Outsourcing and Professional Services Eric Goodness, et al. 21 October 2013 ** Source: Gartner, Magic Quadrant for Global Network Service Providers Neil Rickard, Robert F. Mason. 20 March 2014 Gartner does not endorse any vendor, product, or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. The Gartner Report(s) described herein, (the Gartner Report(s) ) represent(s) data, research opinion, or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ( Gartner ), and are not representations of fact. Each Gartner Report speaks as of its original publication date (and not as of the date of this Prospectus), and the opinions expressed in the Gartner Report(s) are subject to change without notice. Application Migration Automation Technologies Select migration mode Select a cloud appropriate for the application concerned World-Class Security Services On-premise (customer site) As the uptake of cloud services progresses, the threat of cyber attacks is increasing. Through its advanced security technologies, the NTT Group protects the valuable data that customers have entrusted to the cloud. The NTT Group s Security Information & Event Management (SIEM) platform utilizes world-leading log analysis technologies and malware countermeasure technologies developed independently by NTT Laboratories. Previously, cyber attacks and incidents continuing over an extended period of time, such Security countermeasure product logs Automate migration procedures Automate installation of software stack, etc. Automates a series of migration procedures Monitor the systems concerned after migration MYSql DB MYSql Offerings DB Apache Web Server Java Modules php Modules Linux Server and other logs Network device logs Refl ection of know-how Collection of events and logs as targeted attacks, were diffi cult to defend against. The SIEM platform, however, can rapidly detect signs of these attacks and defensive measures can be implemented. Going forward, we will enhance our detection logic, which is not available from other companies, and incorporate into our services differentiated technologies and know-how that can respond to cyber attacks, which continue to become more sophisticated. In this way, we will maintain our world-class security services. The SIEM platform was developed by integrating the know-how of NTT Communications and NTT Com Security and the advanced technologies of NTT Laboratories. Analyst NTT Laboratories proprietary database Migration to private, hybrid, and public clouds SIEM platform Prediction / detection Threat detection Influence analysis Severity judgment Customization / tuning Increasing detection precision Improving misdetection rate Correlation analysis Using proprietary know-how to detect new threats Patch analysis engine Real-time analysis engine NTT Communications proprietary blacklist NTT Laboratories analysis engine portal Analyst report Automatic notifi cation Data by customer Database by region system data 026 NIPPON TELEGRAPH AND TELEPHONE CORPORATION ANNUAL REPORT

4 : Strong Growth in Global Cloud Services Track Record Overseas Sales Leading Growth in the Group s Top Line Example of Cross-Selling 1 Yum! Brands, Inc. One of the world s largest restaurant companies, with brands including KFC and Pizza Hut Migration of common information systems to the cloud Contract Summary Provision of outsourcing services Business process outsourcing (BPO), such as accounting, general affairs, and personnel Information technology outsourcing (ITO) Growth in Cross-Selling Order Volume (Orders received through Group collaboration) By advancing Group collaboration and further strengthening our business system through transactions, we have substantially enhanced the Group s ability to provide total solutions, from IT infrastructure to applications. We are recording growth in cross-selling orders leveraging cloud and IT outsourcing (ITO) services as triggers. Consequently, our cross-selling contract value has increased substantially, rising from $143 million in the previous year to $700 million in the fi scal year ended March 31, The expansion of our business in the global market and the receipt of large orders has further increased recognition of the NTT Group around the world and generated a favorable cycle leading to new transactions with global enterprises. Overseas Sales Growth in Cross-Selling (Cross-Selling Contract Value) $62 million $85 million $143 million $700 million Fiscal year ended 2011/3 2012/3 2013/3 2014/3 March 31 In July 2013, the NTT Group received an order for IT outsourcing from Yum! Brands, one of the world s largest restaurant companies. The restaurant brands operated by Yum! Brands include KFC and Pizza Hut. Yum! Brands, which conducts global business operations, had been searching for a partner that offered high levels of technical capabilities and service quality. This partner needed to be able to help Yum! Brands to reduce costs through the provision of optimal services with fl exible accommodation of changes in needs. We proposed a total solution encompassing (1) migration of the client s ERP system, which had been operated on their own servers, to a cloud environment utilizing an NTT Communications data center, (2) outsourcing of indirect operations, including accounting, general affairs, and personnel (BPO), and information technology outsourcing (ITO), with the outsourced operations handled by NTT DATA, and (3) advisory services for an effective, effi cient migration to the cloud using a proprietary tool developed by NTT I 3. The NTT Group received the order as a result of the high evaluation of its comprehensive capabilities. Example of Cross-Selling 2 Texas Department of Transportation Advisory Services Assessment of cloud migration with tools developed independently Data Center Provision of data center Yum! Brands, Inc. Applications / Managed ICT Customization and implementation of Oracle ERP application Provision of private cloud service On a dollar basis, overseas sales in the fi scal year ended March 31, 2014, were $12.2. Targeting the achievement of our objective of overseas sales of $20.0 by the fi scal year ending March 31, 2017, we will strive to achieve organic growth at each Group company, centered on NTT DATA, Dimension Data, and NTT Communications. In addition, through transactions we will further strengthen our operational scope (expand our footprint / fi elds of business) and operational depth (ability to provide solutions). We will also strive to make additional gains in cross-selling. As a result, we are forecasting overseas sales of $15.0 in the fi scal year ending March 31, We are making steady progress toward our objective of increasing the proportion of corporate sales represented by overseas sales to 50% or more in the fi scal year ending March 31, Due to steady growth by overseas sales, the proportion of corporate sales represented by overseas sales increased 4.8 points year on year, to 36.6%, in the fi scal year ended March 31, 2014, and we are forecasting a further increase to 43.1% in the fi scal year ending March 31, Overseas Sales $12.0 Fiscal year ended / ending March $12.2 1,196.0 $15.0 1, % 43.1% 31.8% Proportion of corporate sales represented by overseas sales 2013/3 2014/3 2015/3 (Forecast) Contract Summary In June 2013, the NTT Group concluded a partnership agreement with the Texas Department of Transportation, one of the largest transportation departments in the United States. The aims of the Texas Department of Transportation are to reduce costs and focus management resources on primary strategic operations. Accordingly, the agreement covers a wide range of areas, including application development, operation, and quality control; operation and maintenance of networks and core systems; and security. NTT DATA will handle applications and core system, Dimension Data will be in charge of network construction and maintenance, and Dimension Data and Solutionary will provide managed security services. Especially important factors in the receipt of the order were NTT DATA s track record in application maintenance and management and Solutionary s total security solutions that leverage advanced technical capabilities. Government agency responsible for maintaining public transportation / aviation / rail infrastructure Provision of core system for public transportation management on highly secure cloud platform Security Full-line security service Applications Application development / maintenance / quality assurance Texas Department of Transportation Managed ICT Provision of private cloud service ICT support for core systems, such as CAD and GPS Construction and operation of unified communication platform* * Unified platform for telephone calls, video conferencing, etc., provided via network 028 NIPPON TELEGRAPH AND TELEPHONE CORPORATION ANNUAL REPORT

5 : Strong Growth in Global Cloud Services Mergers and acquisitions Action Acquired Arkadin International SAS, a provider of teleconferencing services Acquired Nextira One, a provider of ICT solution services in Europe United Kingdom United States 2013/ /04 Began construction of the Hemel Hempstead 3 data center Established NTT Innovation Institute, Inc. (NTT I3) as an R&D base in North America Provided solution utilizing the cloud for core systems for the Texas Department of Transportation 2014/ /08 Acquired the everis Group, which provides ICT services in Spain and six countries in Central and South America Acquired Solutionary, a provider of security solutions for corporations 2014/01 Acquired Virtela Technology Services, a major network operator 2014/01 Acquired RagingWire, a data center operator 2014/03 Acquired EBS Romania, which conducts business centered on software development Germany Austria 2013/ /10 Made subsidiary itelligence a wholly owned subsidiary Made B, which provides security services, a subsidiary Commenced provision of services at Hong Kong Financial Data Center 2013/06 Expanded comprehensive ICT services in Central and South America through the acquisition of the everis Group Agreed to the acquisition of Digital Port Asia Limited, a data center operator Malaysia 2014/04 Santiago Commenced provision of services at Cyberjaya 4 Data Center São Paulo Buenos Aires Bogota Mexico City Lima Philippines 2013/08 Established offices aimed at scouting ICT markets and ICT business opportunities Acquired Nexus IS, a U.S. ICT solutions service company NIPPON TELEGRAPH AND TELEPHONE CORPORATION Hong Kong 2013/05 Launched Biz Hosting Cloud services at data centers in the United States 030 Acquired fine trade, a provider of settlement services for online retailers n 2014/04 Thailand Commenced provision of services at Bangalore 2 Data Center, one of the largest data centers in India Acquired the Aster Group, a provider of SAP-related consulting and other services 2013/ /11 Acquired 4C Management Consulting through German subsidiary itelligence 2014/03 Order Acquired Optimal Solutions Integration, Inc., a provider of SAP-related services India Established a new BPO / IPO center in Louisville, Kentucky Received order from Yum! Brands, Inc. 2013/ / /03 Spain Order Romania Denmark 2014/ / /08 Order Order France Steps Taken to Strengthen Scope and Depth in the Past Year 2013/05 Data center NextiraOne, a provider of ICT solutions services in 13 European countries, acquired by Dimension Data Guam 2013/05 Acquired MCV, a cable TV and Internet operator ANNUAL REPORT

6 Special Feature 2 Contributing to Solutions for Social Issues through ICT The NTT Group aims to contribute to the realization of a sustainable society through the use of ICT. To that end, the NTT Group will provide its world-class ICT platform to diverse players and support the creation of innovation through wide-ranging collaboration. This section introduces the types of capital that the NTT Group will utilize and the various forms of collaboration with diverse players that the Group will engage in as it targets the creation of new innovation that helps to resolve social issues. Contents Establishing Business Models to Resolve Social Issues 034 Contributing to the Smooth Operation of Emergency Medical Care through ICT 036 Reducing Environmental Impacts through ICT 038 Special Feature NIPPON TELEGRAPH AND TELEPHONE CORPORATION ANNUAL REPORT

7 Special Feature 2: Contributing to Solutions for Social Issues through ICT Social Responsibility Targeting the Realization of Steady Growth Together with Stakeholders Establishing Business Models to Resolve Social Issues With business models that utilize a wide range of capital, the NTT Group aims to contribute to the resolution of social issues and to achieve growth over the medium to long term. NTT has been a leader in achieving higher speeds and larger capacities for fiber-optic technologies. We also led the world in the construction of a fiber-optic network, and we developed and promoted the LTE high-speed mobile communications standard. As a result, Japan now has one of the world s most advanced ICT platforms. Moving forward, NTT will provide this platform for use by diverse players in a variety of industries. In this way, we will work to create wide-ranging innovation through collaboration with players in different fields. To contribute to the resolution of social issues and the development of the Japanese economy, the NTT Group will strive to be a Value Partner that supports customers and realizes sustained growth together with stakeholders. We aim to resolve these social issues through the use of ICT. Contributing to the Resolution of Social Issues Medicine Environment Logistics Improving medical / welfare environments P36 37 Introducing advanced educational environments Transportation Innovation by Service Collaboration Tourism Sports / Entertainment Education Manufacturing Activating regional economies Reducing the environmental impacts of society Special Feature 2 P38 39 Excellent human resources in each region of the world Human capital Increase Collaboration with players in a wide range of industries NTT Group Value Partner Communications facilities and data centers Manufacturing capital Increase, R&D, and alliances Strong partnerships inside and outside the Group, shared values Social and relationship capital Natural capital World s most-advanced technical capabilities Intellectual capital Increase Supporting countermeasures for the aging of social infrastructure Advances in ICT, centered on the globalization and initiatives of corporations and on migration to the cloud, have transcended the boundaries of fields and industries and brought about new types of competition. In this setting, companies are not trying to address the needs of customers entirely on their own. Rather, they are actively taking steps to maximize customer satisfaction by creating new innovation through collaboration among players that extends across industry lines. NTT has a responsibility to offer ICT as catalyst in order to support innovation through collaboration. We have a foundation of social and relationship capital comprising strong partnerships and shared values, both inside and Providing information security measures Reinforcing and Expanding the Various Capitals that Support New Business Models outside the Group. On that foundation, we will utilize, R&D, and alliances to further reinforce and expand our various capitals. These capitals include human capital in each region of the world, as well as manufacturing capital in the form of our ICT platform, including communications facilities that support a world-class ICT communications foundation and the world s second largest data center operations. In addition, our intellectual capital includes the world s most advanced technical capabilities. Together with players from a wide range of industries, we will contribute to the creation of new value and the resolution of social issues. 034 NIPPON TELEGRAPH AND TELEPHONE CORPORATION ANNUAL REPORT

8 Special Feature 2: Contributing to Solutions for Social Issues through ICT For Social Communities Development of a New Emergency Medical Information System Using ICT Developing a system to transport sick or injured people to the optimal medical institution as rapidly as possible Contributing to the Smooth Operation of Emergency Medical Care through ICT On the front lines of emergency medicine, emergency response teams share the patient intake readiness of medical institutions, and IT systems have been used for these purposes. However, there have still been issues, such as the appropriate updating of information about whether or not a medical institution can accept patients. In some cases, these systems were not fully utilized in certain municipalities. In response, NTT DATA proposed a new emergency medical information system (EMIS) to municipalities. The proposal called for shifting the primary data input role from the medical institutions to the emergency response teams. Under the system created by NTT DATA, the emergency response teams and medical institutions can use smartphones or other devices to share information in real time, such as information about the emergency patients and information about transport results. This system facilitates the transport of emergency patients to the optimal medical institution as rapidly as possible. With the new emergency medical information system, each time an emergency patient is transported the emergency response teams use their smartphones to enter that information. As this information accumulates, related parties can visualize information about medical institutions that can accept patients, even during emergency situations, and the problem where ambulances carrying people needing emergency transport are refused at multiple hospitals can be controlled. In addition, the emergency response teams use digital pens during transport to digitize and register their observations of the emergency patient. The registered information can be seen in advance by the medical institution, which can prepare to rapidly implement emergency measures. Improvements Offered by the New Emergency Medical Information System Urgent Issues in Emergency Medical Care Previous Data entry Registered information Method of registration Frequency Input by medical institution Issue: Human resources shortage Availability input Issue: Difficult to forecast Written with ballpoint pen Issue: Cannot be managed electronically Twice per day Issue: Information out of date Special Feature 2 The number of patients being transported by ambulance is increasing, and it is taking longer for emergency patients to find a hospital that can treat them. Japan faces a problem where ambulances carrying people needing emergency transport, such as pregnant women in serious condition, are refused at multiple hospitals. This situation occurs throughout the country and has become a major social problem. Factors contributing to this problem include social issues, such as a shortage of doctors and mismatches between physician specialties and the needs of patients. Moreover, there are also ethical issues, such as patients with minor illnesses who call an ambulance rather than use a taxi. Also, Japan s population is aging, and a Number of Emergencies Attended and Number of Patients Transported (1,000 emergencies / 1,000 patients) 6,000 5,000 4,000 3,000 2,000 1,000 0 Increase of about two times in comparison with ,802,455 5,250,302 Number of emergencies attended Number of patients transported Source: Fire and Disaster Management Agency, Ministry of Internal Affairs and Communications, 25-nenban, Kyukyu/Kyujo no Genkyo growing number of people require emergency transport, such as those who experience a sudden decline in their physical condition. In recent years, while the number of emergencies attended and the number of patients transported is increasing, a variety of problems and issues have combined to result in an increase in the length of time required to reach the hospital. (Minutes) Doctor shortage Mismatch between physician specialties and patient needs Time Required to Reach Hospital Acceleration of population aging Issues in emergency medical care Irresponsible use of ambulances Increase of about 10 minutes in comparison with 10 years ago Source: Fire and Disaster Management Agency, Ministry of Internal Affairs and Communications, 25-nenban, Kyukyu/Kyujo no Genkyo 38.7 New Basic Operational Flow Emergency responder Call Medical institution Input by emergency response team Effect: Rapid decisions regarding hospital Observation of emergency patient Observation items confirmed Information sharing Negotiations with hospital regarding acceptance of patient Receipt decision Decision on where to take patient Receipt confirmation Information sharing Input transport results Transport to hospital Emergency patient confirmation Effect: Rapid decisions regarding hospital Information sharing Preparation for treatment Written with digital pen Effect: Achieve digitization without changing the practice of using handwritten notes Digitization of Patient Observation Notes Using Digital Pen Digital pen Smartphone Cloud server Input at all times Issue: Information more up-to-date Using the EMIS in Multiple Prefectures and in the Field of Disaster Medicine The system developed by NTT DATA has been the focus of attention from other prefectures, and we are moving ahead with discussions regarding its introduction. In addition, experts in domestic disaster medicine have also shown interest in this system, and this has led to the start of initiatives targeting the introduction of the system to the field of disaster medicine. The Group is also actively implementing activities targeting overseas markets. For example, we exhibited the system at the 18th World Congress on Disaster and Emergency Medicine, which was held in May 2013 in Manchester, England. 036 NIPPON TELEGRAPH AND TELEPHONE CORPORATION ANNUAL REPORT

9 Special Feature 2: Contributing to Solutions for Social Issues through ICT For Global Environment Example of Environmental Impact Reduction through ICT Services Provided by the NTT Group Reducing Environmental Impacts through ICT Cloud services: Saving energy and space in data centers The NTT Group is continuously working to reduce environmental impacts at its data centers, such as installing energy-saving servers and high-efficiency air-conditioning equipment (please refer to page 74). In addition, the Group is conducting R&D into new technologies. For example, the replacement of electric signals with optical signals in servers will reduce energy consumption by a large amount in the future. Moreover, the use of the cloud will facilitate the consolidation of air conditioning, UPS (uninterruptible power supply), and lighting equipment as well as reductions in the number of servers as a result of virtualization. This means that users of ICT services will achieve substantial savings in the use of energy and space. Reducing Environmental Impacts through ICT Reducing the environmental impacts on society through business activities, while controlling the environmental impacts of the business activities Reduction of greenhouse gases, such as CO2, is one of the important issues that needs to be addressed on a global scale. The NTT Group aims to reduce CO2 emissions from its ICT services because we have a large number of data centers in Japan. For example, our efforts to achieve this aim include choosing and installing energy conservation equipment, as well as using high-efficiency air-conditioning equipment. On the other hand, ICT can help to control the generation of CO2 by reducing consumption of materials and energy, such as decreasing the use of energy and materials for the production of books and music as well as visual media; reducing work processes through increased operational efficiency; reducing the movement of people through network utilization; and reducing the movement and storage of goods through information digitization. Therefore, ICT services not only provide innovation in daily life but also contribute to reducing CO2 emissions in society. This contribution is called Green by ICT, and in this way the NTT Group makes efforts to contribute to the reduction of CO2 throughout society. Energy consumption for service provision CO2 generation Environmental impact from ICT services Provision of ICT services Reducing consumption of materials and energy Reducing work processes Reducing movement of people Reducing movement of goods Reducing storage of goods Controlling the generation of CO2 Increase these effects as much as possible Environmental impacts reduced by ICT services Consolidating Data Servers on the Cloud Reducing consumption of energy by servers Reducing work processes for maintenance and management Reducing storage of goods through decreases in installed equipment A B C D dvideo: Lowering Environmental Impacts throughout Society as a Whole through New Services NTT DOCOMO is providing the dvideo service, which is Japan s largest online video on demand service. dvideo enables customers to use a variety of devices, such as TVs, smartphones, tablets, and PCs, to enjoy video entertainment at any time and any place. By distributing content online, Reducing Environmental Impacts for Society with dvideo Use of dvideo Reducing consumption of materials and energy used to create media Reducing movement of goods in the distribution of media to stores Reducing movement of people related to customers visiting stores Along with the widespread use of smartphones and the realization of high-speed and large-capacity networks, various kinds of new services, such as video on demand, are making progress in the markets. As a result, contributions to CO2 reductions in society through ICT services provided by the NTT Group were estimated at million tons in fiscal We will continue working to reduce the environmental impacts throughout society through the use of ICT in a variety of fields. Reduction in CO2 Emissions Separate installation Rental at stores Fiscal 2011 Fiscal 2014 Use of the cloud 90% reduction dvideo 18% reduction Source: Provisional calculation by NTT Environmental Protection Office. Figures are for annual environmental impacts, with housing service in which customer servers are consolidated and managed, with shared air conditioning, UPS, and lighting as well as maintenance and management operations, compared with separate installation, maintenance, and management of equipment. Reducing CO2 through transition to digital content Source: Provisional calculation by NTT Environmental Protection Office. Figures are for annual environmental impacts, with dvideo compared to store-based DVD rentals. The movement of customers to stores estimates the environmental impact of average movement based on survey results. Also, the calculations assume the use of one device per subscription million tons CO2 emission reductions achieved by saving space and increasing efficiency in maintenance and management dvideo facilitates reductions in the materials and energy required to produce media and in the energy consumed in the distribution of media to stores. In addition, customers no longer need to visit stores, reducing the amount of energy used in movement. Reduction in CO2 Emissions Reducing CO2 Emissions in Society through ICT Services Provided by the NTT Group Reduction of CO2 Emissions in Society throgh ICT Services Provided by the NTT Group million tons (CO2 emissions / million tons) * Calculation methods: Telecommunication Technology Committee (TTC) standard, Methodology for the assessment of the environmental impact of information and communication technology goods, networks and services (JT-L1410), and an LCA calculation method for ICT business organizations from the Life Cycle Assessment Society of Japan (JLCA). Using these methods, we estimated the Green by ICT effects. In addition, the estimations used average usage time for ICT services and usage status for various services based on surveys conducted over the Internet. Special Feature NIPPON TELEGRAPH AND TELEPHONE CORPORATION ANNUAL REPORT