Feeds

Teradata customers plead: 'Stop, we can't buy any more stuff!'

Oh go on, it's only wafer thin

Internet Security Threat Report 2014

Data warehousing pioneer Teradata has grown in leaps and bounds during the past two and a half years. However the database biz took a little pause for breath in the third quarter of 2012, causing it to come up at the low end of its guidance range for revenues and profits - and coming in shy of Wall Street's expectations.

In the quarter ended in September, total sales were $647m, up 7.5 per cent year on year, and net income was up 19.5 per cent to $104m.

Teradata CEO Mike Koehler, speaking on a call with Wall Street analysts ahead of the markets opening, said revenues in the Americas took a hit as one big deal worth more than $10m was pushed out to 2013. He estimated that the overall amount of business delayed in the region probably ranged somewhere from $10m to $20m.

That said, in terms of generating new customers, the Americas had their second highest new customer win rate since 2000, so the news was by no means all bad.

The issue, which Koehler danced around a little bit, is that customers in the region have been building up their data warehouses and big data appliances for the past 30 months, and they have excess capacity, which means they are not under pressure to buy new iron now.

That said, the Americas region is largest sales region for Teradata: the quarter's revenues stood at $384m, up 2.4 per cent year on year. The number of large deals is slowing in the Americas and smaller deals are getting traction. You also have to remember that the region had 28 per cent revenue growth in the third quarter of 2011, which is a very tough target to beat. For the nine months since, the region is up 15 per cent.

Looking across the Pond

Large deals are driving sales in the EMEA region. This part of the world continues to show double-digit organic growth, and has had a "steady state" of bad economic news as a backdrop, as Koehler put it, so this has become the new normal. EMEA contributed $156m in revenue, up 17.3 per cent year on year.

Sales in the Japan-Asia-Pacific region took a hit in the second quarter - a bunch of big deals in China were pushed out as that economy slowed - but a number of these big deals were inked in Q3 and that helped pump up Teradata's sales in JAPAC by 13.8 per cent year on year to $107m. Koehler said that a number of other big deals that had been delayed in China earlier this year were expected to close in Q4, so China should do well the final quarter as well.

"Longer term, we believe that we are well positioned for double-digit revenue growth," Koehler explained, but added that over the short term, Teradata is feeling the impact of the macroeconomic environment in the United States, China, and other regions as there are hiccups and reactive belt-tightening.

In Q3, product revenues (which include hardware and software) were up 6.6 per cent on last year to $306m. The Enterprise Data Warehouse 6690 is the main machine that new customers are buying, according to Steve Scheppmann, Teradata's CFO, and the 2000 series of data warehouse appliances came in at the mid-point of the expected range of 10 to 15 per cent of total revenues. The company now has 34 customers with data warehouses in excess of 1PB in size, which is nearly triple the number it had at the beginning of 2011.

Revenues from consulting services rose by 10.2 per cent on the previous year to $194m, and maintenance services were up 5.8 per cent to $147m in the third quarter.

Teradata did not change its full year 2012 guidance, but did warn investors that it would come in at the lower end of that estimate and that it expected the Americas region's performance to remain the same in the next quarter.

The company expected sales to be up somewhere between 12 and 14 per cent, so it looks as though 12-ish per cent is what it will see. As for earnings per share, the guidance is the same, but Scheppmann said to expect it to come in at the high end of the range of $2.20 to $2.40 per share. So, slightly lower revenues but slightly better profits. That's a fair trade any IT vendor would take. ®

Beginner's guide to SSL certificates

More from The Register

next story
Docker's app containers are coming to Windows Server, says Microsoft
MS chases app deployment speeds already enjoyed by Linux devs
'Hmm, why CAN'T I run a water pipe through that rack of media servers?'
Leaving Las Vegas for Armenia kludging and Dubai dune bashing
'Urika': Cray unveils new 1,500-core big data crunching monster
6TB of DRAM, 38TB of SSD flash and 120TB of disk storage
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
SDI wars: WTF is software defined infrastructure?
This time we play for ALL the marbles
Windows 10: Forget Cloudobile, put Security and Privacy First
But - dammit - It would be insane to say 'don't collect, because NSA'
Oracle hires former SAP exec for cloudy push
'We know Larry said cloud was gibberish, and insane, and idiotic, but...'
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.