Teradata stands firm against Oracle
Despite facing increased competition from software powerhouse Oracle, the CEO of Teradata explains why he is confident about the firm's prospects - even if the recession has been less than kind.
By Stuart Lauchlan, news and analysis editor
Most companies would obviously not welcome the prospect of increased competition from Oracle but Mike Koehler, CEO of data warehousing specialist Teradata, is remarkably phlegmatic on this subject, despite Oracle partnering with Hewlett Packard (HP) on data warehousing machines and the database giant's planned takeover of Sun Microsystems.
"As far as it relates to data warehousing and Teradata, at the end of the day, Oracle is a database that we compete with and they have added a hardware component to it to try to address a piece of the problem in conjunction with HP." he says. "What they do with exit data that relates to Sun we don't know. But at the end of the day, it's a database and there's a hardware component to it, whether it's Sun or whether it's HP. Whereas on the other hand, Teradata is all software. That said, Oracle's got a huge market presence. They've got a lot of relationships and everything else and we are very respectful of them as a competitor. From a technology perspective, we feel very confident about Teradata."
Mike Koehler, CEO, Teradata.
Teradata was, of course, spun free from former parent NCR but Koehler argues that the firm is doing just fine on its own two feet, despite the troubled economic environment. "Overall, we saw good user-base activity in the first quarter. Customers continue to value and invest in Teradata to help operate their businesses more efficiently, reduce costs, find new sources of revenue and enhance their customer relationships," says Koehler. "Upgrades included Delta, Continental, Air Canada and Qantas, as the airline industry looks to improve fuel management, revenue yield management and to personalise customer communication and marketing.
"Retailers such as Carrefour, the world's second-largest retailer, upgraded its Teradata environment to enable marketing activities for over 14 million households in France, and to achieve a 360-degree real-time view of its customers across multiple customer contact channels. JD Williams in the UK is now doing customer analytics across all channels, including the web, to market the customers in near real-time. Trunk call activity included China Mobile, Vodafone Australia, Q-Star, the UK's leading telco, and Bouygues Telecom in France, which is reducing costs while consolidating numerous data marks into its Teradata active enterprise data warehouse."
The firm is also looking to expand despite the current downturn. "We are adding more sales territories to extend our market reach. We added 40 sales territories in 2008 and we will end 2009 with 60, which puts us on plan to add 90 new territories by the end of 2010," explains Koehler. "We continue to enhance and expand our purpose-built platform family. The technology investments we make here are core to our business and have allowed Teradata to increase our data warehouse leadership position, as well as extend our market reach, by offering data warehouses with multiple uses, functionality and price points.”
The firm has also announced partnership deals with other software vendors, most notably SAS and SAP. "We announced our strategic partnership with SAS a year and a half ago and we are starting to see the benefits of integrating the strengths of both companies," says Koehler. "We have developed joint horizontal offers for in-database processing, scoring accelerator and optimisation services, as well as financial industry offers for any money laundering and credit risk. These solutions are being used to help with customer churn, claims processing, product forecasting, risk and fraud detection. Customers such as O2, are seeing where model deployments that used to take weeks can now be done in days. Processing and scoring that took days can now be done in hours, driving new value faster while reducing cost."
As for the more recently announced SAP alliance, Koehler sees this as chance for users to consolidate enterprise data and analytical needs into a single enterprise data warehouse. "Today, SAP runs primarily on Oracle and IBM databases. Customers who have an SAP BW implementation and have Teradata enterprise data warehouse implementation in effect have two data warehouses," he explains. "These customers need to replicate and move data between SAP and Teradata. Customers will now benefit by having one data warehouse instead of two and the associated cost reduction, speed and simplicity that comes with it as a result."
But the downturn has inevitably taken its toll. "The challenge that we've got is the lack of visibility going forward," admits Koehler. "Clearly, we have some pretty strong activity going, in particular in Europe, [but in] other places in the world, not as strong. The visibility isn't there as far as getting a picture for where this thing is headed."
Mike Koehler, CEO, Teradata.
Europe is emerging rather well however, he says. "EMEA activity in the pipeline is very good - new customers as well as everything across the board," he notes. "It's been growth that's occurring on a geographic basis within Europe and growth that's been occurring across a couple of key and large industry segments. It's benefited us very well.
"We are getting good growth in the emerging markets. We have been adding resources there as well. We've had good results across the boards and across all the geographies. We are very strong in telcos there, which in this environment is a decent industry relative to some of the other ones. We've also had very good success in financial services as companies looked to get more visibility and granularity into their information systems."
In terms of market sectors, some are healthier still than others. "Financial services and retail were up quite a bit. Communications overall, globally, was down and manufacturing. We had a pretty good drop off in the first quarter," says Koelher. "Those are the four major industry segments for the Teradata business. Of the four, I would say the one we see the most softness in overall around the world would be in the manufacturing industry segment.
"What we have seen over the past history and some downturns is that retailers seem to get out ahead of this cost and savings in an advance of an economic downturn. We got pretty hit hard in the retail in the US. I am a little optimistic that on the retail side that we may bounce back a bit and we had a good first quarter in the retail industry."