Q&A: Teradata CEO Mike Koehler

On acquisitions, R&D, RFID and software as a service

On acquisitions, R&D, RFID and software as a service

Since its split from NCR just a few weeks ago datawarehousing specialist Teradata has already made a splash with a strategic tie-up with business intelligence vendor SAS

Datawarehousing is emerging as a robust growth area, a $15bn market set to expand by eight to nine per cent over the next five years, according to Gartner.

Previously head of the Teradata unit within NCR-Teradata, Mike Koehler is now the spun off company's president and CEO - his first time holding the top office. silicon.com editor Tony Hallett recently caught up with him at Teradata's Partners user group conference to ask him about acquisitions, innovation and being a first-time CEO.

silicon.com: Post-spin-off, will your general strategy change?
Koehler: No, we were pretty much a free-standing business unit within NCR prior to the spin off and our priorities remain the same. It's all about advancing our technology leadership position and driving enterprise datawarehousing, through our own internal, organic investments as well as with partners.

And how about acquisitions?
As always we will be looking for other opportunities. The difference going forward is that we can control how we invest, as opportunities present themselves.

As a separate company will the markets expect you to be more innovative and so will there be a change in R&D spend?
We invest in advanced development. We always look at new technologies, new trends. We've made acquisitions - smaller ones - either related to our core technology stack or to help us get into new markets. Examples: a company that had a logical data model for the healthcare industry, because healthcare is one of the markets we're trying to penetrate. We've made some investments in text analytics. We're investing in things like geospatial - the location data dimension. There are a lot more opportunities [for datawarehousing] that will come from GPS as well as RFID - for example marketing in real-time to people.

Metro, the German retailer and Teradata customer, is well-known for its RFID trials - how will RFID, especially when it goes down to the item level, impact on your business?
RFID is now more at the case or pallet level. But as it becomes more prevalent it presents a great opportunity to us - it's more data and it's more data analytics for us.

Is software as a service (SaaS) something in Teradata's thoughts?
What it lends itself to is really price-packaging rather than a difference in the way we can add value to a company. If there was demand, we'd react to the market. But datawarehousing is very strategic to most companies… you can't 'outsource' the statistical data-mining and analysis.

Do you have a roadmap for acquisitions?
We have a portfolio that extends beyond our core datawarehouse but a lot of that portfolio is with partners. There are niche opportunities we will continue to look at. We don't have a roadmap per se but a framework.

What do you lose by not being part of NCR?
Not much. Size.

Did you consider a new identity at the time of the spin off - after all, times have moved on from 'tera' reflecting the size of many databases?
We thought about it. How a terabyte is no longer a big deal. Maybe 'Petadata'! But at the end of the day… there is no value for the customer.

Was taking the company public with a first time CEO ever an issue?
There was never a call to bring in someone who had been a CEO somewhere else. When you look at a CEO, there is experience in certain job functions that a unit head might not have but CEOs are measured at the end of the day on performance and results. I've been running Teradata since August 2002 and the performance has been good. There is room for improvement and I don't want to take credit for all the results.

The datawarehousing market is growing but does it have a perception problem?
IDC and Gartner's analysis has been that the datawarehousing market will grow at 6.3 per cent compound annual growth rate for 2007 to 2010. In there is hardware, software and services, and the hardware is only growing at 2.4 per cent. So hidden within the 6.3 per cent is some pretty good software growth.

How do you feel about SAP's purchase of Business Objects ?
Business Objects will in a way operate as a standalone business, so I don't anticipate any change. Business Objects has been a good partner of ours but if you take a look at some of these other acquisitions that have gone, where the technology has been integrated - look at Oracle with Siebel analytics, Hyperion… they were all partners of Teradata and today I would argue we are better partners with Oracle analytics than before. So consolidation in a way has worked well. We also partnered with Ascential and they were acquired by IBM - same thing there.