NEC to invest $1.2bn in cloud computing

NEC, the Japanese IT giant, plans to invest ¥100 billion (around $1.2 billion) in cloud computing facilities in order to grow its overseas business.

The investment will go towards building five new data centres, including one in the US and one in China, as well as “M&A costs”, NEC said yesterday. The company intends to grow its cloud services revenue tenfold to $1.3 billion by 2012.

It plans to differentiate its cloud-computing offering with biometric security measures including fingerprint scanning and voice recognition.

NEC sees in hosted IT services an opportunity to leverage its network infrastructure to expand overseas and to take market share from competitors. “Now that we are in the cloud-computing era, we believe we have less barriers to make inroads into rivals’ turf,” said Takuji Tomiyama, the head of NEC’s IT services business.

A similar argument was made by fellow Japanese IT company NTT when it announced its acquisition of South African IT services provider Dimension Data earlier this year. The acquisition, which completed yesterday, “would allow NTT to succeed in the coming age of cloud computing”, the company said at the time.

Fujitsu, Japan’s largest IT services provider, announced earlier this year that it is investing ¥50 billion ($600 million) in cloud computing facilities. That investment will pay for data centres in locations including the UK.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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