Teradata Serves Red Apple - Analyst Blog

A leading provider of Enterprise Data Warehousing solutions, Teradata Corporation (TDC) will provide data warehouse services to one of the premier supermarket convenience store chains Red Apple Inc.

Red Apple has selected Teradata’s Data Warehouse Appliance for its stores. The Data Warehouse Appliance is a fully integrated, scalable platform with Teradata nodes, industry-standard, enterprise-class storage and the Teradata Database and utilities. The appliance is cost effective and suitable for companies of any size.

Red Apple believes that the Teradata appliance will support its expansion plans by providing and analyzing information, which are crucial for growth on real-time basis and in a cost effective manner.

Red Apple contends that consolidation of data from multiple sources into one centralized data warehouse will make decision making much faster and more accurate than before.

Red Apple expects to use Teradata’s Data Warehouse Appliance with Microsoft Corp.’s (MSFT) Business Intelligence and Workflow, accelerating responses to various queries of users within a considerably short span of time.

Teradata continues to remain an automatic choice for the retailers with an increasingly complex business demand. The company has a number of solutions, which are cost effective and easy to implement particularly aimed at the retailers and will remain a primary source of revenues over the long term, in our view.

Teradata continues to launch new products at regular intervals. The company introduced the new Teradata Extreme Performance Appliance 4600 platform for real-time analysis, in the first quarter of 2010. We believe the new cloud computing initiative; the Teradata Enterprise Analytics Cloud will further drive growth going forward.

We continue to expect Teradata to benefit from the large and growing data warehousing market. According to the research firm IDC, the market is estimated to grow at a compound annual growth rate (CAGR) of 7.4% through 2013.

Moreover, we believe strategic partnerships with large organizations such as Microsoft, eBay Inc. (EBAY), Oracle Corp. (ORCL), International Business Machines Corp. (IBM), AT&T Inc. (T), SAP AG (SAP) and SAS will drive long-term profitability.

However, an increasing consolidation and competition among larger players in the data warehousing industry are eating into Teradata’s market share, which is currently ranked fourth, according to IDC. The data warehousing market is a saturated market and Teradata faces considerable competition from Oracle Corp., Netezza Corp. (NZ), IBM, Microsoft Corp., Sybase and SAP.

We maintain a Neutral recommendation on a long-term basis (6-12 months). Currently, Teradata has a Zacks #3 Rank, which implies a Hold rating on a short-term basis.