NCR hopes to cash in on Teradata spinout

And then there were two

By Ashlee Vance in Mountain View • Get more from this author

Posted in Financial News, 8th January 2007 22:57 GMT

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NCR has kicked out one of its "pillars" by setting its Teradata division free as a separate company.

The cash register maker today announced plans to split into two publicly traded companies. One company - NCR - will continue selling a wide range of goods, stretching from point of sale machines to servers. The other - Teradata - will concentrate on selling data warehousing software. NCR shareholders will have stakes in both companies should the arrangement go through as planned in the next six to nine months.

Teradata's flashy software powers some of the most sophisticated retail and manufacturing operations on the planet. With customers such as Wal-Mart and Dell, the division has managed to bring in close to $400m per quarter in revenue.

Just last year, NCR's management billed Teradata as one of the key "pillars" of the company moving forward. The executives pointed to the division's customer base and growth rate as positives.

These same executives appear to have changed their minds and now believe that Teradata could prove more lucrative as a separate business.

The spinout might also help Teradata combat more aggressive rivals. Former Teradata boss Mark Hurd, for example, is now overseeing a new date warehousing business at HP.

Current NCR CEO Bill Nuti will continue to lead the hardware business, while SVP of the Teradata division Mike Koehler will be CEO of the new company.

(In related news, Koehler approved the decision last month to cancel Teradata's annual sales event, citing cost cutting and a desire to "stay focused" as reasons for the move.)

The spinout is not subject to shareholder approval, although the deal must meet some regulatory requirements. ®

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