Data warehousing, the discipline that deals with the world’s most valuable data just witnessed a dramatic, and potentially seismic shift: Teradata, arguably the 800 pound gorilla in this space, was punished severely by the Street and plunged into turmoil.
Teradata dropped the bombshell just in time for its third quarter earnings call. The relatively newly minted CEO Oliver Ratzesberger is out—after just 10 months. Victor Lund, former CEO and longtime board member takes over at the helm and is now in charge of righting the ship. Missed earnings and lower guidance sent the stock into a nosedive of about 20% in after-hours trading.
Analysts seemed perplexed how they could have missed the developments leading up this cataclysm—and what this all means now for the data warehousing market at large. Let’s unpack.
It’s no secret, the cloud vendors AWS, Microsoft, and lately even Google have been putting a target on Teradata. Teradata’s reaction to fend off that threat has been to try and protect their current installed base by shuttling them to the cloud onto Teradata’s own offering on AWS and Microsoft. With limited success only. It is fair to say that just about every Teradata customer is currently considering moving to cloud-native solutions like Azure Synapse, Amazon Redshift, or BigQuery. Teradata—on-prem or in the cloud—is increasingly becoming an obstacle to realizing a compelling cloud-based corporate strategy. Too grand are the promises of deep cloud integration to hold on to legacy database technology.
In their earnings call, Teradata blames the restructuring from on-prem to cloud business for the drop in revenue. Legitimately so, I’d say. Let’s take a closer look though. Teradata is actually not so much losing customers as not getting customers to renew. The vast majority of Teradata customers are holding back while trying to figure out how best to cut ties with that vendor. We see this in our practice every day. It’s bad now but it stands to reason that Teradata is in for a double whammy. After overhauling their revenue model, only few customers will actually use the new products in the cloud. Most customers will look to move directly to modern cloud data warehouses.
Teradata may hope it will take enterprises a long time to figure out how to leave their platform. After all, traditional database migrations are exorbitantly costly, time-consuming, and sometimes career killers.
There’s good news though: IT leaders who are not willing to let others decide for them have a better option now. The Datometry platform enables enterprises to replatform their applications sitting on Teradata today to a modern cloud data warehouse at a fraction of cost, time and risk. Without changing SQL or even APIs.
To learn more, contact your cloud vendor today and ask them about Datometry and see if you qualify for a free assessment. A prosperous future for your enterprise in the cloud is well within reach!