ATLANTA: Despite strong financial performance, and a leadership position in one of today’s hottest markets, analytics, questions continue to circulate around Teradata Corporation (TDC), which has gathered 3,000 customers (versus 5,000 in 2015, although SAS is holding a similar gathering this week) and partners for its annual Partner conference. In August the company announced higher revenues — $599 million versus $559.23M — and earnings per share — $0.71vs $0.60 — than predicted by analysts, but the positive results couldn’t stop last week’s market slide, when TDC shares fell 4.24%, as analysts put thumbs down to the company’s prospects.
Teradata’s future is dim, wrote analyst Thomas Dinsmore, publisher of the Big Analytics Blog, back in February, and under the previous management. While it’s been struggling since 2013, he believes it has the potential to be a stable and profitable company, but not a growth company, unless it makes some big changes.
‘Companies with a clear growth vision can invest heavily in sales, marketing and engineering; stable companies must be lean. Teradata now spends more “below the line” — engineering, sales, marketing, general and administrative functions — than it did in 2012, when it seemed poised for growth… Meanwhile, while the company invested a little over $600 million in research and development over the past three years, it spent $1.6 billion repurchasing its own stock… A company that spends three times as much buying its own stock as it spends on R&D is a company that has no confidence in the growth potential of its own business, and no ideas for building a better product.’
Several months later at the Teradata Influencer Summit, new management, a new architecture, more apps and IP, and, most importantly, a more urgent move to the cloud, things were looking brighter, noted Doug Henschen for Constellation Research. ‘As CEO Lund put it at the outset of the Summit, Teradata has great technology, smart people and an awesome customer base. Now that distractions — such as the divested Aprimo marketing business — are out of the way, Teradata has clearly refocused on its core competency. Now it’s a matter of execution and delivering great technology in smarter, more flexible and easier-to-consume ways.’
Speaking to a group of analysts and journalists at Partners, recently demoted (promoted?) from the board, and active with TDC since 2004, President & CEO Vic Lund said the company has been working on a new strategy for some time. “We have gone through the process of how we are actually changing: we are going to be business focused, not technology focused.”
While technology will support this customer-centric approach, this apparent reversal is not as big a change as it might appear. A customer focus has always been part of TDC’s DNA, and surveys supported that, said Lund: “we found our customers viewed us as trusted advisors.”
That should be a significant benefit for Teradata as the analytics market — business phenomenon with a body count — heats up:
-global revenue in the business intelligence (BI) and analytics market is forecast to reach $16.9 billion in 2016, an increase of 5.2% from 2015;
-spending on cloud-based big data and analytics (BDA) technology will grow 4.5x faster than spending for on-premises solutions;
-improving customer relationships (55%) and making the business more data-focused (53%) are the top two business goals or objectives driving investments in data-driven initiatives today; 78% of enterprises agree that collection and analysis of big data have the potential to change fundamentally the way they do business over the next 1 to 3 years.
Some of the technology to support the new and improved TDC were announced this week, including: Borderless Analytics, providing seamless shifting of analytic workloads across a multi-system hybrid cloud environment; and, Teradata Everywhere, the ‘world’s most powerful analytic database, available everywhere, or at can be deployed on any combination of Amazon Web Services, Microsoft Azure, Teradata Managed Cloud, VMware, and Teradata IntelliFlex. I’ll take a closer look at these announcements and other Teradata Partners developments in subsequent stories.
Disclaimer: Teradata looked after airfare and hotel.