NCR has announced plans to spin-off its Teradata data warehousing subsidiary as an independent company. Bob Fair, vice president of business strategy and the chief marketing officer at Teradata, spoke with Computerworld about the factors behind the decision.
Fair also discussed what the spin-off plan means for Teradata in a market that is becoming increasingly competitive as Hewlett-Packard, IBM, Microsoft and Oracle all step-up their efforts to grab data warehousing users.
What was behind the decision to separate Teradata from NCR and what can Teradata users expect to see as far as its impact on new product releases and customer support goes?
The two companies have very different business models. The question isn’t really why the split; it is really a question of timing. Teradata, over the past four or five years, has really established itself as a leader in the enterprise data warehousing space. The rest of the NCR organisation has improved its operational performance. You end up with two different companies competing in two different segments that are both now very strong financially. It makes sense to let us both go and compete 100% in our distinct markets. Customers shouldn’t expect to see any changes at all, [especially] any negative changes. We expect zero disruption. We’ll be even stronger and more nimble when this separation is finished.
Do you think you need to be more nimble to fend off increasing competition in the data warehousing market, from companies like Microsoft and Oracle?
We’re the biggest organisation that focuses exclusively on enterprise data warehousing. [By spinning off from NCR] we end up with every single management cycle in the organisation focused on becoming more agile and nimble. [But] this is not a situation where we are being forced into this due to competitive pressures.
Will this better position the company to compete with HP, which enable under former NCR CEO Mark Hurd, has been quietly ramping-up its plans to enter the data warehousing market?
It is no surprise at all that HP is trying to enter the market. We take every competitor very seriously. We obviously respect HP as an organisation and pay a tremendous amount of attention to what we learn about what they’re doing. HP publicly says that enterprise data warehousing is the best way to deliver enterprise analytics. [But] it takes a tremendous amount to go deliver enterprise data warehousing. They are going to have a challenge [trying] to do that. They will probably be more of a competitor in the data-mart space than they will be to us.
You’ve said that Teradata has seen an increased interest in enterprise data warehousing. What is driving that and how are the drivers different than they were three to five years ago?
Customers have ended up creating a lot of data and they still can’t get simple answers to questions like: ‘How much does Vendor A spend with me?’ When the executives ask the questions and can’t get the answers they get the explanation that the company has standard processes and data, but several instances of these things [instead of a single data warehouse]. There is a recognition that I have to have better analytics to compete and if I don’t put all my data in one place I can’t get a quick, nimble and agile [analysis] capability.