A facility solution company based on integrated engineering, NTT Facilities provides services such as consulting, design supervision, and maintenance
There was a major reorganization of the NTT Group in 2019. Please tell us about that reorganization and how NTT Facilities was involved in it.
In 2019, our company became a member of the NTT Urban Solutions Group, which promotes urban development as the NTT Group, and within that group, we are primarily responsible for the building engineering aspect. Specifically, we provide one-stop services ranging from building planning, design, construction supervision, construction management (CM), and maintenance management. In addition, as part of a reorganization within the NTT Group, NTT Facilities transferred and integrated its electric power-related operations to NTT Anode Energy Corporation last July, and has since been working with NTT Anode Energy to integrate its electric power and building businesses at the group level.
What has been advancing over the past decade is the "Society 5.0 Concept" proposed by the Japanese government in 2016. How NTT Facilities is contributing to the Society 5.0 initiative, and how we are working to achieve it, are you interested in learning more? How are NTT Facilities contributing to the Society 5.0 vision, and how will NTT Facilities play a role in realizing this vision for society in the future?
In order to realize the Society 5.0 vision, it is important that ICT is integrated into people's daily lives and implemented in facilities such as buildings and equipment, and that services based on ICT are used to build a society that is centered on people and the environment. In 2021, NTT Group will formulate a new environmental energy vision, "NTT Green Innovation toward 2040," while restructuring its existing CSR Charter and establishing a new "NTT Group Sustainability Charter" to promote various initiatives to realize a sustainable society by balancing the resolution of environmental issues and economic growth. We have decided to promote various initiatives to realize a sustainable society by balancing the resolution of environmental issues and economic growth.
In this context, the NTT Urban Solutions Group is promoting urban development based on Urban Development DTC® (Digital Twin Computing for Urban Development)」, which enhances the convenience of people's work and living and provides relaxation, and we are playing a role in this urban development through our architectural design and facility management. This approach to urban development is not limited to urban centers, but we believe that if ICT is implemented in many public and private facilities in all cities and regions, it will be possible to develop urban development tailored to the characteristics of each. These are NTT Group's solutions to urban and regional issues, and we believe that continuing these efforts will contribute to the development of cities, regions, and ultimately society.
We believe that urban development is not just about real estate development, but also about facing the challenges of each city and helping to solve them. In other words, each town in Japan has its own advantages and challenges, and we believe that while facing the challenges unique to that town, it is also important to bring out its history, culture, and spatial appeal. Therefore, it is important to view issues from a broad framework, that is, to consider what the issues of the city are in light of social issues, which is the basis and starting point of the project.
In a society where digitization is accelerating, it is important to take a total approach that promotes local economic activity and the prosperity of local governments and local businesses. As part of this approach, we, together with NTT Anode Energy as mentioned earlier, are supporting the "local production for local consumption" approach of "resource and energy recycling" promoted by local governments. This initiative aims to "simultaneously realize decarbonization and industrial development" in the region by promoting energy-driven urban development. NTT Group's strength lies in its ability to take a multifaceted approach through integrated "ICT x energy" technologies, such as digital twin technology and energy management, and to realize urban development projects that make the most of the characteristics of each city through architecture-related engineering, design, and facility management. We believe that NTT Facilities contribution to "Society 5.0" is to realize urban development projects that take advantage of the unique characteristics of each city through architectural engineering, design, and facility management.
In addition to increasing the value of real estate, your company's core goal is to address changes in society. One of the major social challenges facing Japan today is the aging and shrinking population. This creates major problems such as shrinking domestic markets and labor issues. On the other hand, it also creates certain opportunities for companies to develop technologies and innovations that can address the aging population. What challenges and opportunities do these demographic trends in Japan present for your company?
First, in terms of urban development, as I mentioned earlier, our goal is to create cities where local industries are promoted and local businesses prosper. If we can create jobs by balancing decarbonization and industrial promotion, and if we can increase the convenience of living and the value of local experiences through spatial design and ICT services, I believe that the number of people living and working in the area will increase. In urban development, it is first important to draw up a specific story or scenario for this purpose. In this story, the main actors are the people involved in the town, and we are in the position of supporters who provide resources such as knowledge, skills, and technology. We want to participate in the storytelling stage, supporting the people involved in the city and working together with them to help solve social issues through the creation of a wellbeing city that is easy to live and work in.
Next, I would like to discuss how we can contribute to the aging and declining population through the engineering services and solutions we provide to our clients. We believe that the key to this is labor-saving technology. In the management and repair of buildings and facilities, it is effective to promote the automation of processes by using ICT-based methods and tools. In today's world, where there is a shortage of labor and people engaged in such work, companies and municipalities urgently need to balance such labor and energy savings, and this is an area where we can contribute.
Here are some specific examples of labor and energy savings. We have started an initiative to streamline operations in remote areas by utilizing a cloud platform that connects on-site (onsite) and off-site (in the office) and linking the information necessary for operations. We have also begun to use a cloud platform to connect onsite and offsite offices.
Another important aspect of a building's life cycle is to maintain the building in good health through regular renovation and renewal based on a plan. Our cloud services and other digital technologies are useful in this maintenance and management.
The NTT Building alone has approximately 14,000 buildings, and if we were to include other buildings in our portfolio, the amount of time and effort required to maintain and manage them would be astonishingly large. Therefore, we are trying to improve the quality and efficiency of remote operations through this cloud service and optimize it as much as possible as a maintenance and management operation. In addition, by setting up a control center, we can monitor and manage these various operations. For example, if more people are needed onsite, we try to optimize the overall operational process by linking offsite and onsite in the most efficient manner and shifting personnel promptly. This initiative has just started and is still in the demonstration stage, but we intend to further verify and brush up on it in the future. Through the demonstration of services using this platform, we hope to provide our customers with solutions that enable them to perform maintenance and upkeep without the need for manual labor as in the past.
The most important thing for owners of facilities is how to maintain them in good health and extend their service life. They need proper maintenance and repair work, and at the same time, they need to decarbonize their facilities as such. This is the major challenge facing facility owners. We can assist facility owners in developing medium- to long-term maintenance plans and roadmaps to become carbon neutral, thereby helping them operate their facilities in a way that reduces life-cycle costs as much as possible. Our focus is on these facility management (FM) services.
Currently, we have partnered with Planon to develop an integrated workplace management system (IWMS) that utilizes a service desk to connect building owners and tenants. Basically, in response to inquiries or requests due to problems that arise, we can provide solutions, locate areas in need of maintenance, and quickly provide engineering services such as design and construction. As a business model, a more scalable model for such platform services is likely to be successful. Therefore, the more facility owners participate, the more cost-effective the service will be. We intend to offer such services to a large number of customers.
A single large data center can consume as much electricity as 80,000 households. When it comes to data centers, there are two types of ownership. First, large corporations such as cloud vendors, telecommunications companies, and banks operate their own centers. Second, our colocation services have private space in leased centers. The leasing company provides power, cooling, and network services to the customers using that space. For owners of such colocation services, sustainability performance is important. Large operators like Google can purchase carbon offsets, but how do smaller data center operators prove to their clients that they are carbon neutral? This is a very important issue.
This is a very important issue, and we see it as one that we will focus on in the future. With regard to the creation of renewable energy, NTT Group has a number of its own solar power generation facilities.
We are working with NTT Anode Energy to provide renewable energy to our overseas customers, and the green data centers we are involved in the building have been well received. This is because, at the same time that we are working to supply renewable energy, we are also working toward thorough energy conservation in our buildings and facilities. What is important in terms of power, air conditioning, and other facilities is to reduce the power consumption of the equipment itself and to introduce technology to optimize the energy used. After construction, the operation is also important, and we have developed a state-of-the-art air conditioning control system that optimizes airflow. These systems are based on the technologies we have developed in the NTT Group, and we believe that this has earned us the trust of our clients. We are doing our utmost to meet this important challenge head-on.
NTT Facilities is also committed to playing its part in this larger vision and contributing to our customer's businesses. NTT Facilities is strongly committed to playing our part in this larger vision and contributing to our customer's businesses.
We are just coming out of two years of turmoil caused by COVID-19, and one of the major impacts of the pandemic has been a change in the way we work. During the COVID-19 era, we saw an increase in telecommuting and remote work, but even as the pandemic has begun to abate, the use of office space has changed. Satellite offices are now the new norm, and many workers want to not have to come to work every day. As a company that does both the architecture and engineering of office buildings, how are you adapting to this trend?
I can't make a blanket statement about what the future holds for office space in Japan and how its positioning will change. This is because each company has a different view of the office, and it depends on the situation at any given time. What I can say is that the concept and role played by office space in economic activity and work awareness have changed. The office used to be a symbol of status in a sense, and efficiency based on zoning and layout was emphasized, but as the pandemic changes the way we work, more emphasis is being placed on human activity in the design of the space. Office space still plays an important role, especially in terms of bringing people together to collaborate. In that sense, I do not believe that actual physical office space should be diminished, and I believe that it will continue to play a major role in changing meaning and value, even now that remote work has become mainstream, and will continue to do so in the future.
In other words, there is a shift in thinking toward a human-centric (human-centered) approach based on human activity, and I think the concept of ABW (Activity-based Working) suggests this. The office is still useful as a place where people gather to discuss and integrate their expertise to solve complex problems, and it is important to consider what kind of space can provide the necessary amenities and facilities for this purpose.
Until now, Japanese people have drawn an unspoken, hard line between the home as a place to relax and unwind on holidays and the office as a place to go during the week and work under strain. Now, after the Corona Disaster, the line is becoming blurred, and it is better to think of the office as a place where one can relax as well as work. Providing such an environment would be an interesting approach in the office space and workplace market.
A company's greatest asset is its people, and how well an office space can nurture them is important, and I think this is a point that companies around the world should fully consider. Ultimately, the key to an office is not its size or location, but how comfortable and accessible it is. Do employees feel they can do their best work in their own office space? That is a question companies should ask themselves. We continue to collect data on the workplace and how workers work to try to understand people's needs. Through the use of digital twin technologies in the workplace, we can understand these human behavioral characteristics at a deeper level and, through that analysis, optimize the working environment.
Furthermore, when considering the workplace of the future, in addition to design and engineering, ergonomic and behavioral science approaches that focus on human behavior and activities are important, and professionals involved in the workplace need to continue to be exposed to and fully absorb new theories for this purpose. I believe that workplace professionals need to continue to be exposed to and fully absorb new theories for this purpose. By applying these theories, we can find good solutions for creating environments that motivate workers, encourage interaction, and increase intellectual productivity. We believe that the essence of workplace design is to transform what we used to call office space into such a "place of co-creation" as a space where we can create value together. It is people, after all, who develop people. In this sense, I believe that offices will continue to play an important role in the future, and it is important to constantly update and enhance our ability to create and provide such workplace environments. Therefore, I believe there is still room for growth (potential for growth) in this field.
One of the IoT system services we offer in workplace design is a human flow analysis system. This system allows us to visually grasp data such as worker activity history and room usage. We can see where people are staying in an office space in real-time, and through simulation, we can optimize temperature, humidity, lighting, and airflow. This can then be used to create a more comfortable, energy-efficient, safe, and secure workplace. This visual display and analysis of data have the potential to lead to new solutions and services related to lighting control systems and air conditioning control systems.
Your company is part of NTT Urban Solutions, and I believe there are significant synergies from that parent company, but I am also interested in international business alliances. For example, a technical alliance with SMARDT, a Canadian chiller manufacturer. Are you also looking for international partners?
In the data center engineering business, we need to grow our business while keeping up with global standards. In Japan, data centers are becoming larger and larger in recent years. In the construction market, mega-cloud vendors are now focusing on building hyper-scale data centers. In this sense, we believe that collaboration with overseas companies is essential for growth in businesses related to data centers.
To cite one example, the FMACSⓇ developed by our company has earned the trust of many customers, including the NTT Group, as an air conditioner based on a highly reliable design. Based on such technology, we are trying to collaborate with overseas companies that have high technological capabilities. Furthermore, we are meeting the needs of data center operators in Japan and overseas by adding Smart DASHⓇ , which optimizes airflow through AI control, to various air conditioning systems, including FMACSⓇ.
Another example of our solution is to customize an optimal air conditioning system by combining chillers according to the customer's required specifications through our partnership with SMARDT. It is also very important to achieve the most efficient energy use through labor-saving and carbon-neutral solutions in the operation and operation phases after construction. Effective airflow management through the installation of aisle capping and proper management of floor panels in the server room are also important solutions. We are proud that one of our strengths is our ability to optimize the server room environment through a total approach from the construction phase to the operation phase.
We also play an important role in bridging the gap between the services that overseas manufacturers can provide and the needs of our customers when they enter the Japanese market and offer their products in our data centers. In particular, we have earned a high level of trust for the maintenance and servicing of air conditioning systems, which have different characteristics for each manufacturer, thanks to the operational technologies developed by the NTT Group over a long period. In this respect, we can synergize our strengths with those of global companies, including overseas manufacturers, and build win-win relationships as partners.
Research and development have long been a part of the NTT Group as a whole. NTT Facilities is not a manufacturer, but rather a developer and provider of technologies and products that meet the needs of our customers. Our role as a system integrator is to develop or introduce technologies and products that meet customer needs, and to integrate them to provide innovative solutions. That is what our research and development is all about, and that is why our overseas partners are so important to us.
Seismic technology is another focus of our research and development. We analyze and verify the seismic response characteristics and seismic performance of buildings and various types of equipment through shaking table experiments using our high-performance shaking tables, as well as by linking observation data from our own seismic observation network and structural simulations. The shaking table experiments can reproduce seismic waves like those of the Great Hanshin-Awaji Earthquake and the Great East Japan Earthquake, which caused extensive damage in Japan, and analyze how such an earthquake would affect server racks and data center equipment. This analysis and verification can improve the safety and reliability of that equipment.
Furthermore, in the future, to address social issues, our R&D direction will include efforts to become carbon neutral, such as reducing energy consumption, improving earthquake-resistant technology and structural monitoring technology from the perspective of business continuity planning (BCP), and working toward digital transformation (DX). We are also working on digital transformation (DX) initiatives.
You have made a capital participation in a Singaporean company called Pro Matrix. In addition, you have offices in San Jose California. Why did you acquire a stake in Singapore and what advantages does the U.S. office bring to your international business?
We recognize that the Asia-Pacific Economic Cooperation (APEC) region is a region where the data center business is particularly strong and where demand will continue to grow. This region has great growth potential, not only for our company but also for NTT Group as a whole. We intend not only to support NTT Group's data center business but also to earn the trust of our customers and increase our global presence by providing one-stop solutions for all data centers in these regions.
As President and Representative Director, what goals and dreams do you hope to achieve by the time you hand over NTT Facilities to the next generation of NTT Facilities?
From the beginning of my tenure, I have been working to create an "emerging" organization, where autonomous individuals co-create high value through co-creation. Last year, we celebrated our 30th anniversary, and we would like to take this opportunity to advance to a new stage as such an "emergent facility solutions company. We would like to continue to create, provide, and inspire value that exceeds the expectations of our customers and clients through the collective knowledge of every one of our employees. As the "one and only partner" of our customers and clients, I hope that the accumulation of innovative work that responds to their trust will lead to the realization of a sustainable future.