BARC Perspective: An Inside Look into Teradata's Cloud and Partner Strategy

Three years ago, Steve McMillan took the helm as CEO of Teradata. He embarked on a transformative journey, redefining Teradata’s identity and setting new strategic objectives. This year, at the June Partner event, McMillan celebrated his third anniversary by amplifying Teradata’s vision as a technology, software, and platform company – notably, one that is “Cloud First” and “Partner First.”

Teradata’s “Cloud First” message is supported by its Q1 2023 cloud revenue. They achieved $388 million in public cloud annual recurring revenue (ARR), marking an 86% YoY increase from 2022. This growth is primarily sourced from existing clients migrating to a cloud-centric strategy. Teradata faces significant competition from Snowflake and others in the space as its cloud strategy progresses.

Moreover, the “Partner First” strategy has proven instrumental to Teradata’s cloud success. 75% of their largest cloud deals have come via their partners, establishing a broad ecosystem that includes companies such as Accenture, Dataiku, Kyndryl, H2O.ai, DeLorean Artificial Intelligence, SAS, Google, Amazon Web Services (AWS), Microsoft Azure Cloud, FICO, @Azure Machine Learning, Vertex Inc. AI.

A Balancing Act Between Heritage and Innovation

Even with the new focus, McMillan emphasized Teradata’s deep roots in the industry. “We are a different company; we have changed,” he stated, emphasizing a careful balance between a renewed culture focused on innovation and the firm’s wealth of experience, reputation, and lineage.

Teradata VantageCloud

Teradata VantageCloud is the platform at the center of the strategy. The company is heavily invested in migrating its existing customers to VantageCloud. However, challenges may lie ahead with clients dedicated to on-premises architectures, particularly those in heavily regulated industries like banking and healthcare. Teradata must invest heavily in its marketing and manage customer acquisition cost (CAC) to realize growth beyond its install base.

Teradata VantageCloud aims to enable #AI/ML at scale for its customers. ClearScape Analytics, a component of VantageCloud, for example, provides an on-ramp to operationalize analytics for its customers, leveraging Teradata’s 150+ in-database functions and compatibility with different languages like SAS, SQL, Python, and R. Teradata leverages three different clusters to align with workloads “primary,” “compute” and “analytic,” each is designed for specific types of execution.

Additionally, VantageCloud’s ModelOps features promise to streamline analytics. The platform offers a comprehensive suite of features, including a Feature Catalog, Model Deployment, Lifecycle Management, Model Governance, and Model Monitoring. It even provides a “bring your own analytics” function to integrate partner solutions like Qlik, SAS, Progress, H2O.ai, Looker, and others into the platform.

Delivering Transparent and Predictable Expenditure

Teradata VantageCloud also boasts a solid foundation of FinOps features that enhance transparency. These include consumption chargeback by departments, cost avoidance policies, query guardrails, and predictable spending – a clear win for organizations seeking better control over their cloud costs. Teradata has spent decades assisting customers in maximizing the performance and throughput of their environments. Those years of effort are being channeled into transferring this capability to the VantageCloud environment.

As Teradata embraces the future while acknowledging its past, it seems well-positioned to deliver on its promise of a truly “Cloud First” and “Partner First” future. This pivot to innovation, combined with its well-established reputation, puts Teradata in an exciting position as it navigates the dynamic landscape of data and analytics.