Europe shines for Teradata

Things have been a bit stormy on the profit front for data warehousing firm Teradata but Europe has offered an unusual bright spot, as Stuart Lauchlan reports.

Profits and revenues are down globally at data warehousing firm Teradata, but Europe has been cast in the unusual role of a bright spot for the company.

Globally the company reported revenue of $421m for the quarter ending June 30, down from $455m in the second quarter of 2008. Net income dropped slightly, from $69m to $62m. But while the Americas performance slowed, Europe proved to offer more reasons for cheer.

“EMEA had our strongest performance in the quarter with revenue up 6% in constant currency and EMEA was going against a very strong prior year Q2, where revenues grew 33%," says CEO Mike Koehler. “New customer wins included Skandinavisk Data Centre, which supports the information technology needs of more than 140 banks in Scandinavia. This new enterprise data warehouse is won in partnership with SAS and Jaguar Land Rover.

“A number of global customers have further established their equipment to our technology platform. Barclays Bank, for example, have signed a new global agreement with us and made investment in Teradata in the UK and now in South Africa,” he adds. “Expansions and upgrades of notes were Lloyds Banking Group and four other large financial services companies. And Shop Direct Home Shopping Limited, the UK’s largest online and home shopping retailer, which is consolidating data marts in to an active enterprise data warehouse. EMEA also noted good expansion activity including Telefonica Spain, Telecom Egypt, Telenor Pakistan, Vodafone and others.”

Slower results in the US

Closer to home, the US market delivered poorer results but Koehler insists that customers are still spending - albeit more slowly and over a more protracted period. “We had some very significant new customer wins including: the Home Depot, which is implementing an active enterprise data warehouse,” he says. “[There was] one of the world’s largest pharmaceutical firms which is consolidating and eliminating costly data marts in to an enterprise data warehouse to get better information to run their business; Amazon.com; the State of Ohio, which joins a growing group of states relying upon Teradata to help recover unpaid and owed tax revenues; one of the world’s leading milk and dairy products producers and distributors, which will use Teradata to help improve their supply chain by moving to a more active reporting environment.

“We also saw good user base activity in the Americas as customers continued to expand their Teradata environment to get better insight to run their businesses and to save costs. Customer expansions in the healthcare industry included: CVS Caremark, the pharmacy’s services division of CVS - one of the largest health insurers; one of the largest pharmacy services companies; and one of America’s leading health plan providers, which is executing on its vision for national electronic health records with Teradata."

Other upgrades or expansions in the Americas included Nextel in Mexico, as well as seven other leading telecommunication providers and five of the world’s top manufacturers - three in the consumer packaged goods segments, one in auto and one in the high tech segment - according to Koehler.  In retail, Saks Fifth Avenue selected Teradata to help improve their current forecast accuracy at the store level, whilst marketing power users at Macy’s and one of the largest food retailers  will use the Teradata system for advanced market basket analytics. Also the firm added a major smartphone and computer company to its ‘Petabyte club'.

Replacing competitor systems

All of this activity means that there is still an appetite for the types of data warehousing and management offerings Teradata specialises in. “Not only do new customer wins represent the replacement of competitor systems, a lot of these expansions with customers also represent the replacement of competitor systems as well, as data warehouses and data marts get eliminated when consolidating them and integrating them in to Teradata enterprise data warehouses," argues Koehler.

“Integrating multiple subject areas and data into a centralised and active enterprise data warehouse provides best in class information to make decisions and is the lowest cost architecture for the majority of the data and subject areas that exist out there today in the world’s enterprises. What our platform family has done is to allow us to address new opportunities like extreme data single subject areas, such as click stream data or call detail data, that are more efficiently served in a dependant data mart environment than in an enterprise data warehouse environment.”

With that in mind, there are no plans for any change of strategy on the part of Teradata, even in the face of beefed up competition from the likes of Oracle with its database appliance push. “Enterprise data warehousing will continue to be our primary focus and not our competitors' focus,” insists Koehler. “It requires high concurrency of users, complex queries and analytics, ad hoc queries, active loads and real-time access, to name a few of the unique requirements that Teradata does. Our opportunity is to increase our market coverage and help our customers understand the business value that our platform family can deliver beyond what they are currently doing today.”