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EDS hooks up with NTT Communications

The IT services company partners with the Japanese carrier in a deal that EDS hopes will strengthen its presence in Japan.

Electronic Data Systems and Japanese carrier NTT Communications have formed an alliance to offer information technology and communications services, a deal EDS hopes will strengthen its presence in the Japan.

EDS, which provides a range of IT services, and NTT Communications said they will work together on several products, including data center, co-location, hosting and communications services. The companies also will provide services to each another. For example, EDS's consulting wing A.T. Kearney will advise NTT Communications' IT Management Services unit.

"We do believe there are tremendous possibilities for outsourcing in the Japanese market," EDS spokeswoman Kristin Dobrowolski said.

IT outsourcing involves one company letting another take over operations such as data center management or technical support. Dobrowolski cited a February 2002 study from market researcher IDC that said the outsourcing market in Japan will grow 9.6 percent annually until 2005, eventually reaching 4 trillion yen (about $34 billion).

IT outsourcing has emerged as a bright spot in a stagnant environment for IT spending. According to TPI, a firm that advises companies on outsourcing contracts, the total value of IT outsourcing deals worth more than $200 million rose from $38.8 billion in 2001 to $41.4 billion in 2002.

EDS has been serving multinational corporations in Japan for 17 years, Dobrowolski said. The company has more than 3,000 employees in the Asia-Pacific region, excluding Australia and New Zealand.

NTT Communications, a subsidiary of Japanese telecoms giant NTT, said the EDS deal was part of its vision to become a "global IP (Internet protocol) solution company." In a separate announcement Monday, NTT Communications said it will offer products such as network-safety services and global disaster-recovery products.