Teradata - New Platforms for Competing Against Data Warehouse Applicances

Implications: o While Teradata has been slow to acknowledge that data warehouse appliances were more than a niche market, Teradata may actually have been the original data warehouse appliance vendor. o Data warehouse appliances do not necessarily replace traditional data warehouses; rather they complement them and should be considered as a possible component of an organization's overall data warehouse architecture.  o Teradata is being squeezed at the top end by traditional database competitors such as Oracle; it is being squeezed at the low end by data warehouse appliance vendors such as Netezza.

Analysis: In mid April, Teradata launched a family of data warehouse platforms built around the Teradata 12.0 database engine that are squarely aimed at its data warehouse appliance competitors.  The family consists of three offerings, two of which, the Teradata 550 and the Teradata 2500, are directly targeting the data warehouse appliance market.

Although Teradata has been slow to acknowledge the demand for data warehouse appliances as anything more than a niche market, appliances have continued to gain advocates and demonstrate their capabilities as a cost-effective alternative to general-purpose data warehouse deployments.  This lack of acknowledgement is somewhat ironic as Teradata, which in 1984 released its DBC/1012 (DBC for database computer; 1012 for 10 to the 12th power which equals a terabyte) with its special purpose database that is optimized for query and analysis is, for all practical purposes, the original data warehouse appliance vendor.

Teradata's has long advocated a centralized strategy that was based on consolidating an organizations's individual data marts into a massive enterprise data warehouse.  This was something that Teradata could readily accomplish as it is considered the vendor-to-beat in the high-end data warehouse market.  However, the appeal of the data warehouse appliance was that it could be utilized for special-purpose analytic applications such as the analysis of massive volumes of call detail records at a relatively low cost, be implemented very quickly, and significantly outperform traditional data warehouses.

As data warehouse appliances matured, they evolved to the point where organizations were not using them just for a single type of analysis; in fact, some organizations have had success deploying them in multipurpose enterprise implementations.

Teradata, whose technology is being squeezed at the top end by traditional database vendors including IBM and Oracle and at the bottom end by appliance vendors such as Netezza and Datallegro, found that it could no longer ignore the appliance market.

While the press release announcing the new Teradata platforms seems to go out of its way to avoid labeling any of the offerings as an appliance, this is exactly what the Teradata 550 and Teradata 2500 are. Teradata has even gone as far as to say that the "Teradata 2500 can also complement a robust enterprise data warehouse environment where customers may have other analytical needs."

Vendors of data warehouse appliances will certainly agree with this statement. However, they will argue that rather than using the Teradata 2500, prospects should use the vendor's own data warehouse appliance offering instead!