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Can Teradata Go It Alone?

Business intelligence is hot, but can Teradata keep up the momentum without NCR?

Teradata was freed from its association with cash registers and automated teller machines last week when parent company NCR spun it off as a separate company. It opened for public trading on the New York Stock Exchange Oct. 1. The spin-off will help Teradata focus more on its own business strategy and customer base, and raise money for acquisitions and internal development.

The newly independent Teradata plans to build up bigger armies of salespeople and consultants, forge more partnerships, and spend much of its time convincing companies that they need an enterprise-wide approach to business intelligence. It's also trying to distance itself from competitors by focusing on operational analytics, the ability for people, and even systems, to make decisions based on the most up-to-the- minute business data--a concept Teradata calls Active Enterprise Intelligence.

Goodbye, cash registers; hello, analytics: Teradata goes solo

Goodbye, cash registers; hello, analytics: Teradata goes solo
With Teradata 12, its upgraded data warehouse, released today, the company has improved workflow management and the ability to prioritize resources based on service-level goals for various workloads, says CTO Stephen Brobst. Simply put, it's been tuned to know what business intelligence to serve up, whether it's historical data for analysts developing company strategies or current data for front-line employees interacting with operational applications, e-commerce customers, and point-of-sale systems, Brobst says.

The concept of operational analytics is growing in popularity in the conventional retail business, to immediately replenish inventories and track the success of short-term promotions, and in e-commerce, to boost sales per customer transaction, Brobst says. "Every major retailer in North America is doing this," he says. "In the old days, retailers had Monday morning meetings to discuss the weekend performance. Now, at a best-in-class retailer, if I buy a sack of groceries, before it gets into my car that transaction is in their data warehouse."

Teradata knows a few such retailers: Wal-Mart is its marquee customer. However, a new market player, Hewlett-Packard, nabbed a slice of Wal-Mart's data warehouse business in a surprising August deal.

PRICING PRESSURE
Far more threatening to Teradata's growth, however, are the three revenue leaders in data warehouse software: Oracle, IBM, and Microsoft, in order. Gartner, in a report last year, called Teradata the leading data warehouse vendor from a technical and workload standpoint and because of its consulting and vertical industry expertise. But competitors have improved the performance of their data warehouses in recent years, while Teradata faces pricing pressure from smaller vendors such as appliance specialist Netezza.

Teradata, which ranks fifth in revenue, grew its data warehouse tools revenue (excluding hardware, applications, and services) just 4.6% in 2006, and its market share dropped from 7.9% to 7.3%, according to IDC. Microsoft's sales in the market, by comparison, grew 23%.

While Teradata's independence makes it a possible acquisition target, you're more likely to see it buying up other companies and technologies in the coming year. Scott Gnau, Teradata's chief development officer, says the company is interested in technologies for dealing with spatial, unstructured, and temporal data.

Teradata is putting more focus on the integration of extract, transform, and load tools, Brobst says, working with Informatica to allow data transformation to take place within the data warehouse, rather than the labor-intensive process of transforming it outside the warehouse.

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