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Hurd commits Teradata infanticide

HP's CEO goes after old company with Neoview line

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Exclusive HP's CEO Mark Hurd has okayed a hush-hush plan to undermine his former employer, The Register can reveal.

HP spent much of October briefing analysts about its Neoview line of high-end, data warehousing systems. These products will go up against similar gear from NCR's vaunted Teradata division and kit from IBM. Mysteriously, HP doesn't really want you to know about the Neoview systems just yet.

The silence around Neoview could be traced to the touchy nature of the products. Hurd once ran Teradata while at NCR. In addition, Randy Mott, HP's CIO, was Teradata's most prominent customer when he led Wal-Mart's technology operations. But rather than paying a premium to acquire the $1.6bn per year in revenue Teradata gem from NCR, HP has decided to go after the company by tapping homegrown assets.

HP's Neoview plan makes a huge amount of sense.

HP has crafted five versions of Neoview - each centered around its NonStop Itanium-based servers. Customers can purchase 16-, 32-, 64-, 128- and 256-server clusters with gobs and gobs of memory. The systems then get packed down with all sorts of so-called business analytics software from both HP and partners such as SAS, Informatica and Business Objects.

If you go the Neoview route, HP will then try to sell you services around data warehouse design, installation and migration.

All told, this provides HP with an avenue to move a lot of pricey high-end servers and to open new equally lucrative services opportunities. All the while, HP makes use of Hurd and Mott's experience, while also tapping the NonStop expertise it acquired from Compaq (Tandem).

Just to be clear, we're talking about HP trying to crack one of the most complex markets on the planet. The NonStop gear, for example, has been loved by stock exchanges that need to stay up and running all the time. The data warehouse market, however, relies more on processing huge amounts of data quickly and mining that data to produce useful information.

NCR's Teradata division has acquired customers such as Wal-Mart and Dell by doing just that. Last quarter, Teradata increased revenue 5 per cent to $378m. It has long been one of NCR's strongest units, and the company considers it one of its pillars moving forward.

Hurd likely knows that NCR has no plans to part ways with Teradata, even though you could argue with ease that its assets would make more sense at HP, IBM or Sun Microsystems. For that reason, HP has decided to push Neoview.

Comically, HP "launched" Neoview in early October, only it didn't bother to tell the press. The company did brief a few analysts about the project and has now set up a number of Neoview pitches that will take place at various user conferences in November.

For example, the Canadian Tandem User Group is today hearing that "Neoview is an enterprise class data warehouse that enables businesses to confidently capitalize on their information at a dramatically lower cost. The platform delivers the full range of capabilities expected of an enterprise data warehouse: massive scale, complex mixed database workload, high concurrency, very complex query handling, and 24x7 continuous availability. Neoview is a bold new direction for HP that leverages their NonStop experience in combination with 'commodity' server technology."

We understand that HP wanted to wait until it acquired an actual Neoview customer before bragging about the product line. The company's Neoview site remains void of paying clientele.

It looks like HP will claim that Neoview costs less than Teradata's products, while being less complex than IBM's Data Warehousing BCU (business configuration unit). We'll bring you more information on the Neoview play when HP opens up.

For the moment, HP would only provide the following statement:

"The company’s IT department is implementing NEO on its own massive data mart consolidation project. HP believes there is a substantial demand for a cost-effective, standards-based approach to data warehousing. HP has integrated its data warehousing technology into a high-end offering for select customers in various stages of implementation."

What's clear is that HP has temporarily sidestepped what could have been a major bidding war for the Teradata assets. Hurd and Mott have no doubt eyed Teradata-like products as a way to capture high-paying customers while selling expensive hardware, software and services. Teradata, however, has closer ties to the likes of IBM and Sun than it does to HP. All three server makers could have used the Teradata customer list, while NCR wants to hang on to a growing business.

HP has avoided this perfect storm for acquisition overpayment by making use of its Tandem goods and in-house services smarts. Now it just has to tell someone about it. ®

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