Teradata splits from NCR
11/01/2007
The NCR Corporation (NCR) announced yesterday that it is to spin off its enterprise data warehousing subsidiary Teradata Corporation. The separation into two publicly traded companies will happen through the issue of Teradata shares to holders of NCR common stock.

OVUM. Mike Davis

Comment:

This is a logical step that will enable the two companies to better focus on their respective product strengths and which will be good for end-user organisations.

Teradata's flagship product is its Enterprise Data Warehouse, and it has deployments of its products in a significant proportion of the world's financial institutions, in retail businesses such as Tesco and Wal-Mart, and telecommunications.

For the three quarters of 2006 reported so far, Teradata had total revenues of $1.1 billion or 25% of NCR's revenues. It also contributed $228 million in operating profit, or around 55% of NCR's total operating profit before elimination and group overheads. Stephen Brobst, CTO at Teradata, reported three-digit growth in the Indian market.

Mike Koehler, the current senior vice president of the Teradata Division will become the president and CEO of the spun-off company. This is not an unexpected move for whilst NCR and Teradata have many customers in common, the respective decision makers for the products are different. Clear and distinct messaging will be important to drive future growth. For example, this split will leave the rest of NCR to focus on the financial self-service and retail store automation markets.

Ovum believes that this is a good move for both organisations and demonstrates a very positive attitude to generating new business, particularly in Teradata's data warehousing markets.