Specialist
Former senior executive at Teradata Corp
Agenda
- Teradata's operating environment – moving from a single-tenant to multi-tenant environment
- Competitive dynamics between Teradata (NYSE: TDC), Microsoft (NASDAQ: MSFT), IBM (NYSE: IBM), Cloudera (NYSE: CLDR), SAP (NYSE: SAP), Snowflake (NYSE: SNOW) and Oracle (NYSE: ORCL)
- Shift from licensed to subscription model and Teradata's revenue deceleration over the past few years
- Outlook for H2 2021 and beyond, including industry consolidation
Questions
1.
Could you give an overview of Teradata’s operating environment, pulling out a few key trends you think investors should pay attention to?
2.
What’s your assessment of Teradata’s evolving market opportunity as customer data needs shift from on prem to the cloud? How strong would you say the demand for Teradata is?
3.
Could you outline Teradata’s competitive landscape across legacy on-prem and cloud-based vendors? Where would you force rank the company vs players such as IBM, Oracle, Snowflake, Databricks and Cloudera or some of the data warehouses within the hyperscalers, so Amazon Redshift, Microsoft Azure Synapse or Google BigQuery?
4.
Are there any other competitors you’d factor into the equation, perhaps BI companies such as Tableau Software?
5.
Do you expect cloud providers such as AWS, Azure and Google Cloud Platform to make a more significant push into Teradata’s market with some of their subsidiary companies? How might this coopetition dynamic play out, given Teradata has active partnerships with these companies but also competes on some service lines?
6.
What’s your outlook for Teradata’s ability to compete with its new Vantage multi-cloud offering? We touched upon how it’s operating in these cloud environments, but it seems Teradata has been losing customers to players such as Snowflake and Databricks, as enterprise cloud transformations accelerate. Is it too little, too late for Teradata or could Vantage give the company a fighting chance?
7.
How would you assess the strength of Teradata’s moat and what do you attribute this to? How does the growth of the Vantage product play into this vs other services across on-prem, professional licences or consulting?
8.
What do you think are the key weak points or areas for improvement within Teradata’s offering? How does this play into where the company is investing for growth and leveraging some of these technology partnerships or investing in other product streams as we discussed? What’s your outlook for this?
9.
How much do you think Teradata needs to invest in its product strategy and roadmap to stay relevant in the market?
10.
How should we think about Teradata’s cost-benefit analysis around investing in new products to stay competitive?
11.
What are your thoughts on Teradata’s growth opportunities across geographies and business segments, considering the company’s go-to-market? What might be paramount focus areas to reignite new wins or stay competitive?
12.
How do customers perceive Teradata vs Snowflake or other newer players? How does this play into the company’s current win rates and ability to win and retain logos?
13.
Could you outline Teradata’s general pricing strategy relative to other vendors? How might the shift to a consumption-based model be attractive to some customers?
14.
For Q1 FY21, Teradata posted 12% YoY total ARR growth with sequential growth deceleration of 1%, but public cloud ARR growth of 176% YoY. Given that Teradata added no new cloud-only customers, is this mainly driven by renewals from large enterprises who likely use on-prem and now have Vantage baked into their offering, so Teradata can also recognise those as cloud revenues? How should we evaluate this ongoing dynamic?
15.
Teradata is projecting mid-to-high-single-digit total ARR growth for H2 2021. What’s your confidence in the company’s ability to hit these numbers and draw in cloud-based customers? Do you expect the adoption of Vantage to be a driving force?
16.
What are your thoughts on the revenue split between licences and subscriptions? How might this trend in the medium-to-long term? What’s driving adoption of Teradata’s cloud product from on-prem and increasing subscription revenues vs customers going back to market and partnering with another vendor for their data warehousing needs?
17.
Teradata seems to be building up its go-to-market and sales and marketing force, despite management’s aim to lower SG&A in the long run. To what extent could this compress margins if the company were to only hit low-to-mid-single-digit revenue growth for 2021?
18.
Where else on the bottom line could Teradata potentially save on costs to try and optimise margins?
19.
What are your thoughts on industry consolidation and how might this play out for Teradata? Other BI analytics and data warehousing companies seem to have been acquired or at least targeted. Could Teradata be in anyone’s cross hairs or has that ship sailed? Who would make sense as a strategic buyer?
20.
What’s your outlook for Teradata’s management with CEO Steve McMillan at the helm? How confident are you in his ability to turn the Teradata story around and successfully shepherd the company away from on-prem and into the new cloud environment, whether as a standalone or by making it a more attractive takeout target in the medium-to-long term?
