Data dreams

"A journey of a thousand miles begins with a single step" is a famous aphorism from Chinese philosopher Lao-Tzu.

More than 2,600 years later the observation is still widely quoted as people and companies set out on new adventures, even those in the abstract world of computing.

So it is with data warehousing, Dan Higgins of Teradata Corp told participants at the company's first partners' conference in Las Vegas after its spinoff from NCR Corp. "It is a journey," he said.

Teradata completed its spinoff from NCR and shares of its common stock began regular trading on the New York Stock Exchange (NYSE) under the symbol "TDC" on October 1.

Teradata President and CEO Mike Koehler rang the opening bell at the NYSE on that day to celebrate the occasion. He was joined by other senior Teradata leaders.

"Listing our shares on the NYSE, the world's leading and most global capital market, is a historic event and marks a new beginning for Teradata as the global leader in enterprise data warehousing," says Koehler. "We will continue to strengthen our company, to expand and deepen our relationships with our strong and diversified customer base, and to invest in initiatives that further improve our technology leadership and grow our business."

"Today, organizations around the world rely on Teradata's expertise in helping them to use enterprise analytics to drive growth, profitability and competitive advantage," Koehler says. "We are well positioned to capitalize on the many opportunities globally and in Chinese marketplace as well."

The significant change after the spinoff is that the company now controls its own investment and it is planning to invest in more adjacent business instead of solely relying on its data warehousing solutions, Koehler says.

"First of all, we will make sure the core of our business is data warehouse analytical solutions. We are also looking at adjacent areas like data management involving tax analytics and the healthcare industry," he says.

China's healthcare industry is a huge business opportunity for Teradata's growth, the CEO notes, adding he will continue to look for growth from other sectors that relate to traditional business, as well as some acquisitions.

In China, Teradata's traditional customers are financial institutions such as the Shanghai Stock Exchange, Bank of China and the Industrial and Commercial Bank of China and China Telecom. It now looks to the mainland manufacturing sector as a potential market.

The US company now has a research and development center in Beijing and a global consulting facility in the northeast city of Dalian. It plans to increase its China staff to cope with its fast-growing business in the country.

"As a public company we now need to have more lawyers and accountants for our growing financial resources," Koehler says.

Shares of Teradata closed at $27.98, up 7.3 per cent, during its first day trading. Some 181 million shares of its common stock were distributed.

NCR stock closed down 52 percent from its close at the end of September on the day its former subsidiary went public.

Barry James, president and portfolio manager with Alpha-based James Investment Research, says that it is natural for the parent company in a spinoff to see a drop in its stock, based on the value of the company that was split off.

Bill Nuti, president and CEO of NCR, says "this separation is a logical strategic step for NCR". He believes it will benefit both of the companies' customers, business partners, employees and shareholders. Teradata and the new NCR operate in different markets from each other, with solid prospects for the future, but they have markedly different business models, he says.

Teradata, which will be headquartered in Miami Township, Ohio by the end of this year, had $1.56 billion in revenue in 2006

NCR is Dayton, Ohio's largest company with more than $6.14 billion in revenue last year.

To further strengthen its global competitiveness, Teradata announced last month that it has entered into strategic partnership with SAS, the leader in business intelligence and analytical software and services.

The partnership will enable customers to use the best of both companies' core strengths due to deeper technical integration of their products, as well as through coordinated marketing, sales and services activities.

"This partnership of two former competitors brings together the respective strengths of both companies in business analytics and enterprises data warehousing," says Dan Vesset, vice-president, Business Analytics, IDC.

(China Daily 11/05/2007 page6)