Japan-based NTT Data recently took a step towards expanding its IT capabilities in India, acquiring a 74% stake in Netmagic Solutions. This marks another important event in the third-party datacenter services market in India. In early 2011, Tulip Telecom acquired a data center facility in Bengaluru at a value of approximately US$46 million. This year, with this deal, NTT Communications not only gets access to Netmagic’s seven Indian data centers, a platform offering public, private and hybrid cloud services, but also inherits the capability to address the fast-growing South Asia data center services market.

Netmagic’s acquisition has long been speculated. The firm has the right set of service offerings, technical capabilities, and local coverage, but it lacks the financial muscle power of its competitors (including Reliance Communications and Tata Communications). Netmagic would have had a tough road ahead in the Indian market without external help. So I believe that this acquisition also comes at the right time for Netmagic Solutions.

Here is a quick look at what this acquisition brings to both companies:

NTT Communications

• Stronger foothold in the Indian market with access to 1000-plus customers.
• A critical piece for its Asia-focused cloud strategy and a step closer to its objective of having 20% of its total revenues outside of Japan in 2013.
• Better servicing capabilities for NTT’s global accounts based out of India.

Netmagic Solutions

• Financial muscle to compete in and penetrate further the India market.
• Access to knowledge base and technology from NTT Data and its numerous IT subsidiaries.

The Department of Information Technology (DIT) of India recently launched a paper on “Framework for Mobile Governance” that aims at providing fast and easy access of public services to citizens through mobile devices. In view of the limited success of the e-governance initiative in India (low Internet and PC penetration coupled with implementation-related issues), the shift in the government’s approach to using mobile as an alternative delivery medium for public services is a step in the right direction. According to the Telecom Regulatory Authority of India (TRAI), there were roughly 894 million wireless subscribers in India as of December 31, 2011, and it is encouraging to see that the government is finally realizing the importance of mobile in achieving its e-governance initiative. I have taken key highlights from the mobile framework published by DIT:

• Creation of a cloud-based Mobile Services Delivery Gateway (MSDG) based on open standards, which will be shared with all central and state government departments and agencies at nominal cost to facilitate e-governance services delivery on mobile devices.
• Incorporation of various channels such as voice, text (email and SMS), GPRS, USSD, SIM Toolkit (STK), cell broadcast (CBC), and multimedia (MMS) for mobile-based services.
• Development of mobile-complaint sites for all government departments and agencies based on open standards.
• Creation of a government mobile app store which will be integrated with MSDG.
• Development of an integrated payment gateway for citizens to pay taxes and bills for other public services through mobile.
• Integration of mobile infrastructure with the Unique Identification Authority of India (UIDAI) platform.

In an interview with the Economic Times in India, Dell announced yesterday that it was readying a war chest of about US$1 billion for IT services related acquisitions in India. Here is why I think this announcement is important for Dell:

First, Dell needs to continue strengthen its global delivery network and industrialization capabilities. Dell bolstered its IT services market position with the Perot Systems acquisition in 2009. Since then, the company has made clear its development ambitions in India from an offshore perspective — including during the first analyst event they hosted in India in September 2011. The company lags far behind the services behemoths, including IBM, which has more than 100,000 staff in India working for international clients.

The India domestic market is also becoming a top priority for all major tech vendors. Forrester expects this market to grow by 20% in 2012 in local currency (see my recent report on the future of IT services in India). Japanese companies like NTT Data have launched aggressive inorganic growth strategies to tap this booming market (Dimension Data in 2010 — which was at the time part of the top 10 IT services firms in India via its Datacraft subsidiary — and more recently Netmagic Solutions). And Forrester expects more Japanese investments in the coming few months.

While IBM, HP, and Wipro Infotech are leading the IT services market in India, Dell is still marginal in terms of system integration and managed services activities. So it’s high time that Dell strengthens its presence in India.

My blog post Apple Infiltrates The Enterprise: 1/5 Of Global Info Workers Use Apple Products For Work! got lots of visibility because of how hot Apple is right now, but our data is much broader than just Apple. Our Forrsights Workforce and Hardware surveys have lots more data about all types of PCs and smart devices that information workers use for work, including types of operating systems — and we even know about what personal-only devices they have.

For example, as of the fall of 2011, the top three smartphone OSes have essentially the same share of the installed base of smartphones used for work by information workers across the globe (full-time workers in companies with 20 or employees who use a PC, tablet, or smartphone for work one hour or more per day). See the chart below and the reference in the Monday, January 30, New York Times article on Blackberry in Europe.