Virtela acquired by Japanese
telecom firm NTT for $525M
Virtella founder Vab Goel

Virtela founder Vab Goel

DENVER — Greenwood Village-based Virtela Technology Services, providers of cloud network services, has been acquired by NTT Communications Corporation, a Japanese telecommunications company, for $525 million. The deal is expected to increase overseas sales and enable NTT to enhance its global cloud services business.

The deal is the second major acquisition of a Colorado technology company in less than a month. Just four weeks ago, Englewood-based MSN Communications was bought by Telephone and Data Systems Inc., a Fortune 500 communications company, for $40 million. (See story.)

Founded in 2000, Virtela has 400 employees and has global operations and delivery centers in the U.S., India and the Philippines. The company serves more than 500 customers worldwide, including some of the world’s largest multinational companies.

NTT Communications is a division of Nippon Telegraph & Telephone Corp., Japan’s largest fixed-line operator. It provides consulting, architecture, security and cloud services. The company plans to combine Virtela's service and operational platforms with NTT's infrastructure and resources to deliver cloud networking services on a global scale. According to company officials, the merger will offer customers a single partner for the full lifecycle of enterprise network services.

Combined operations of the two companies will be introduced to customers in 2014. The acquisition expands NTT's global network services coverage from 160 to more than 190 countries/regions.

NTT will also upgrade its cloud-based network services with Virtela's network function virtualization (NFV) technology to virtualize the functions of customers' network equipment, such as firewalls and WAN accelerators. NTT says this will enable enterprises to benefit from instant service activation and significant cost reduction.

NTT CEO Akira Arima

Akira Arima

"Virtela is well known for its strong technology, networking expertise, global reach and highly regarded services," said NTT CEO Akira Arima. "As we advance our Global Cloud Vision, we expect to continue offering enterprise customers the highest possible value in services ranging from branch office networking to large-scale cloud migration."

Vab Goel, Virtela founder and general partner at Norwest Venture Partners, said "Virtela's virtualized network services model combined with NTT Com's brand and strength will create the industry's most advanced services portfolio that enables enterprises to break free from the constraints of traditional network architectures and services."

Virtela's services suite includes global managed network, security, mobility, application acceleration and IT infrastructure services. The company offers enterprise networking and virtualized IT services via its Virtualized Overlay Network and Virtela Enterprise Services Cloud (ESC) platform, which enables the transition of branch office networking and security services to the cloud.

"NTT Com and Virtela share a vision for passionate customer support and enhanced customer experience and we look forward to continuing to work closely with our customers and partners to deliver even higher value," said Virtela President Ron Haigh.