Teradata sees revenue growth in data consolidation

Teradata has been a well-known name in large-volume database technology almost since its founding in the late 1970s in a garage in Brentwood, Calif. Its name symbolized the ability to manage trillions of bytes – terabytes – of information.

Teradata’s partnering with and subsequent purchase by NCR Corp. between 1989 and 1991 moved it into the forefront of data collection and management, highlighted when the company went live with its first system capable of handling 1 terabyte of data for Wal-Mart in January 1992.

Now, following 18 years of growth in the commercial sector, Teradata is seeking to expand its footprint in a federal market that is intent on reducing its spending.

“We’ve finalized our 2011 plan and we’re forecasting growth of 11 [percent] or 12 percent revenue growth year over year,” said David Scott, vice president of Teradata Government Systems, a $100 million business unit located in Germantown, Md.

Scott said the government’s need to reduce its data storage and management costs will drive Teradata’s growth.

In fact, in a MeriTalk report released last month, “Federal Data Center Addiction: The Road to Recovery,” federal IT managers estimated $14.6 billion in potential savings through consolidation.

However, with new reports of the data center population almost doubling – from 1,100 to 2,094, federal IT managers are in need of greater funding and guidance to accomplish this goal, the study said.

“Government data centers are very full, no space in a lot of them,” Scott said. “And so there is a need for data-mart consolidations, which we’ve done a lot of, either by ourselves or with integrators in the commercial space

Consolidating on average four data marts into one Teradata server reduces an agency’s overall IT expenses without losing the needed integrated data, Scott said.

He added that the term “data mart” should not be confused with “data center.”

A data mart typically is a small departmental server commercially available from manufacturers such as Microsoft, Oracle or Solaris, Scott said.

Teradata’s largest federal clients include the Army, Air Force and the Centers for Medicare and Medicaid.

CMS has many data requests that have to be funded by law, “so they’ve got a fair amount of money earmarked for us next year, just to handle all the transactions around Medicare and Medicaid,” Scott said.

However, he singled out the U.S. Postal Service as a major Teradata client that will definitely benefit from increased data consolidation.

“We’re talking huge numbers,” Scott said. “We know of 1,500 Sun servers that are running Oracle data marts. If we can consolidate that on a four-to-one basis, reduce [USPS’s] immediate operating expense and integrate the data and give them more business value out of the data in the first place, we think that’s very good for them.”

Teradata and Accenture are working with the Postal Service on an intelligent mail project to improve customers’ ability to track the packages they send and to assess the costs involved. “There’s a lot of data around that,” he said.

But Teradata is not in the data center management business. “That’s not part of what we do,” he said. “We sell [USPS] an integrated hardware, software solution with a relational data base. And we also have a multi-million-dollar professional services contract to help them make all of that work.”

That contract, which was recently renewed, covers all the hardware, software and professional services. It accounts for about $15 million in annual revenue for Teradata, he said.

Teradata typically begins with a data mart assessment of the client’s assets and then creates a business case to explain the benefits of consolidation in time and dollars. That is followed by a technical assessment to make the necessary changes.

Scott said he believes the government data consolidation field is wide open and ripe for some outside leadership because “it’s tough stuff.”

There are many competing elements within each agency, and each office or unit has its own needs and requirements for data storage and management, he said.