Teradata announced plans to exit the marketing applications business by the early part of 2016, a move intended to help the company focus on enhancing its data and analytics offerings, while also opening up an estimated $120 million in operating income for 2016.
The news comes after the company reported $606 million in revenue for Q3 2015, a 9% decrease compared to last year. The company updated its full-year revenue predictions as well, expecting to either break even or drop 2%.
Teradata faced tough competition from marketing cloud providers such as Oracle as well as standalone marketing automation vendors like Marketo, said Jon Russo, Founder of B2B Fusion Group, in an interview with Demand Gen Report.
"In this economic environment, companies need nimble partners — time to market is critical as is product focus," Russo added. "As acquisitions have occurred such as Aprimo by Teradata, Eloqua by Oracle and Hybris by SAP, we see standalone companies like Marketo able to innovate quicker from a feature and functionality standpoint than their peers, given their singular product focus."
Offering products through the cloud expands company’s reach, positioning current and prospective buyers to maximize their ROI by having easier access to integrated products, according to industry observers.
"The thing about the cloud, and why I think Teradata went there, is that you want to see customers use the tech to its fullest extent," said George Corugedo, CTO at RedPoint Global. "But normally [customers] only use 25%. The cloud gives you an opportunity to convert your tech into a cloud-first ecosystem that easily strings your stack together. Now, anybody can subscribe to a broad set of capabilities without spending a lot of time and resources on training and education."
Teradata stated that more information regarding these initiatives will be provided after the company concludes its transformational review process — predicted to conclude sometime in the early part of 2016.
"We remain confident in Teradata's technology, our roadmaps and competitive leadership position in the market and we are taking actions to increase shareholder value," said Mike Koehler, Teradata's CEO. "We are making transformative changes to the company for longer term success, and are also aligning our cost structure for near term improvement."