NCR to Spin Off Teradata

 
 
By Chris Preimesberger  |  Posted 2007-01-15
 
 
 

Data warehousing provider teradata, which has operated as part of ATM-making giant NCR since 1995, is splitting off into its own corporate entity in a transaction the company expects to take six to nine months to complete.

The tax-free spinoff, announced Jan. 8, will produce two publicly traded companies: Teradata and NCR, which will retain its central business of making banking equipment and retail checkout systems.

"Teradata and the new NCR operate in different markets, each with solid prospects for the future. But they have markedly different business models," said NCR CEO Bill Nuti, who took over in August 2005 after Mark Hurd left to run Hewlett-Packard.

Teradata, in Dayton, Ohio, sells data warehousing software that is used to comb vast amounts of data to analyze retail buying patterns and other business trends. It had sales of $1.5 billion and operating income of $309 million in 2005. The divisions revenue rose 5 percent to $378 million in the third quarter of 2006.

NCR, also of Dayton, rang up sales of $4.5 billion and operating income of $251 million in 2005.

Teradata will be able to better pursue orders against software rivals, including IBM, Oracle and EMC, according to company officials. Mike Koehler, who has been serving as senior vice president of NCRs Teradata division, will become Teradatas CEO.

Jit Saxena, CEO of Teradata competitor Netezza, told eWeek that an independent Teradata will be good for the entire data warehousing industry.

"Any time you have good, pure-play companies competing in the marketplace, thats good for the customer," said Saxena in Framingham, Mass. "Now we have one more good one. This means more innovation, and this is good in the vibrant data warehousing marketplace we have now."

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