Data warehousing
provider Teradata, which has operated as part of ATM-making giant NCR
since 1995, announced Jan. 8 that it will split off into its own
corporate entity, in a transaction the company expects to take six to
nine months to complete.
The tax-free spinoff, which sent NCR's shares up as high as
7 percent in heavy trading Jan. 8, will produce two publicly traded
companies: Teradata and NCR's central business of making and selling
banking equipment and retail checkout systems.
The split will benefit both parties, said a spokesperson for NCR, based in Dayton, Ohio.
"Teradata and the new NCR operate in different markets,
each with solid prospects for the future. But they have markedly
different business models," said NCR Chief Executive Bill Nuti. Nuti
took over in August 2005 after Mark Hurd left to run computer maker
Hewlett-Packard.
Teradata sells data warehousing software, which is used
to comb vast amounts of data to analyze retail buying patterns and
other types of business trends. It had sales of $1.5 billion and
operating income of $309 million in 2005, and has had the most sales of
any data warehousing provider in the world during the last few years.
The division's revenue rose 5 percent to $378 million in the third
quarter.
NCR's core business sells automated teller machines,
retail checkout equipment and other specialized computer systems. It
rang up sales of $4.5 billion and operating income of $251 million in
2005.
"Creating two separate companies should strengthen
business prospects for both," Nuti told Bloomberg News. Teradata will
better be able to pursue orders against software rivals, including IBM,
Oracle and EMC, the company said. Mike Koehler, who has been running
the Teradata business, will become its CEO.
NCR rolls out an RFID package for small and midsize manufacturers. Click here to read more.
Jit Saxena, CEO of data-warehouse appliance maker
Netezza―a key Teradata competitor―told eWEEK that the split into two
companies will be good for the data warehousing industry as a whole.
"Anytime you have good, pure-play companies competing
in the marketplace, that's good for the customer," Saxena said, in
Framingham, Mass. "Now we have one more good one. This means more
innovation, and this is good in the vibrant data warehousing
marketplace we have now."
Saxena, whose 6-year-old global company makes the Netezza Performance Server
(server, storage and database architecture integrated into one system)
for such clients as Amazon.com, Capital One Services, Cingular Wireless
and Neiman Marcus, said the marketplace he sees now is shifting very
quickly, given that reports that used to be made weekly or monthly are
now done daily or hourly.
Read more here about Teradata's data warehousing analytics.
"Companies are requiring much more detailed recent―if
not real-time―data to run their businesses," Saxena said. "This is
requiring companies like ours to keep coming up with new ideas." The
renewed competition from a newly freed-up Teradata should also
encourage innovation, Saxena said.
NCR, once the biggest U.S. maker of cash registers, was
founded in 1884 as National Cash Register. The company controlled 90
percent of the U.S. cash register market in the 1920s. It made computer
networking equipment in the 1990s and was bought by AT&T in 1991.
NCR picked up Teradata in an acquisition after the AT&T purchase,
and then AT&T spun off NCR in 1995.
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