Teradata strengthens hold on high-end warehousing

Almost half a decade ago, NCR CEO Lars Nyberg made what some observers regarded as a long-odds bet. He decided the company's long-term future lay not with the company's pedigree in hardware or retail systems or indeed financial systems. NCR's core business would be data warehousing, Nyberg foresaw, with its Teradata system as the flagship.


Company: NCR (Teradata division)

Products: Teradata Warehouse Suite

CEO: Lars Nyberg; Teradata COO Mark Hurd

HQ: Dayton, Ohio

Status: NCR is publicly listed on the New York Stock Exchange

Key financials: For 2001, NCR revenues fell 1% to $5.9 billion; net income rose from $178 million to $217 million. Data warehousing revenues rose 1% to $1.1 billion with operating loss of $32 million down from $34 million.

Key competitors: Oracle, IBM

Infoconomy comment: Teradata is growing and profitable, and has pulled ahead of IBM and Oracle at the high-end of the data warehousing market. But it may be held back by the weaker elements in the NCR portfolio.




It is a bet that is paying off. Despite the economic downturn that has ravished the business intelligence sector, Teradata has continued to prosper, growing towards becoming NCR's largest business.

The numbers speak for themselves. In the first quarter of 2002, the Teradata business showed growth of 3% to $290 million with operating profits of $23 million. But removing the NCR WorldMark hardware component, which has been subject to the same downward price pressures as the rest of the server industry, the Teradata software business has "excellent growth", trumpets chief operating officer Mark Hurd, a comment that suggests a level well into double digits.

Those numbers are being fuelled by the fact that Teradata's focus on data warehousing has allowed it to pull away from its closest rivals IBM and Oracle at the high-end of the data warehousing platform market where customers often want to work with many terabytes of data. What gives it that differentiation is an architecture that rapidly returns answers to complex queries, run against vast amounts of data, by executing these in parallel across multiple Intel processors.

But Teradata has grown beyond that underlying querying engine. Its line up now includes Warehouse Miner for formulating analyses; Warehouse Builder, for extraction and loading data; and Teradata CRM, a set of analytic applications for customer relationship management.

With the data warehousing unit now likely to overtake NCR's ATM operations in 2002 as the company's largest business, the calls by some financial analysts for Teradata to be spun off as a separate company seem redundant. Instead, Nyberg's bet looks increasingly like a sure thing.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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