Thread regarding Teradata Corp. layoffs

I hope you didn't listen to these crying clowns and started a position.

I hope you didn't listen to these crying clowns and started a position.

Do you have a link to the Hilary Ashton interview?

The CTO is very optimistic with Wall Street....

Teradata – Hillary Ashton (CPO) MARCH 15th 2021

Our conversation with Teradata focused almost exclusively on the cloud and the trajectory that the company sees. Last quarter, TDC broke out its Public Cloud ARR to be $106mn and is expected to double this fiscal year. From our conversation, we learned that 50% of the cloud ARR is coming from migrations, while the other 50% are net new workloads, a positive leading indicator of growth. We believe that the big question mark will be what the churn rates will be going forward on the legacy business that is not transitioning to the cloud.

Hillary, we have not interacted before, please tell us a little about you?

· Joined 1.5 years ago
· Spent 25 years in IT, 11 years at SAS
· Bridge technology to the market, product market fit, understand what market / customers need
· Ashish - runs the Vantage Cloud team
o Worked for Dell, Symantec - worked on public and private cloud both

those places
Since joining TDC what has surprised you most about the TDC product organization?

· From market perception that it was behind on the cloud, thought it would take 2-3 years
· Turns out that the Cloud team is further along than I thought
· Brought on some people from outside as well that have experience on SaaS
· Last year, where able to move from 35% of spend to cloud to 70% of spend now
What does it mean to move to the Cloud?

· Vantage is portable to the cloud, its software
· Before I arrived, TDC already mapped out migration to the cloud, but needed more resources
· Needed to accelerated funding for the existing roadmap Scalability advantage
· Price / performance is what we are known for and what we brought that to the cloud
· 3/4 years ahead on high performance queries
· Now focusing on ease of use and self-service
· Launched demos and trials of Vantage last year
· Cloud native capabilities - work on AWS, Azure, GCP
o Have 17 native cloud integrations with AWS o 13 with Azure
o 10 with GCP

Split of compute and storage and importance to TDC

· Embraced object stores now
· Allows customers to get into cheaper stores
· Roadmap will continue to push in this area, but we believe that we have done this already
TDC is known for tuning hardware well with its Software, how does it work on the Cloud?

· Take off the shelf resources from AWS, but pick the higher end resources that they offer

If you migrate over, how does TDC choose what type of compute etc. you need?

· Collect a lot of telemetry from on-premise and recommend what type of set-up you need in the Cloud
· Seamless migration is a big part of the success
Use cases from Cloud native seems to be low-end, but how do you compare you use cases
to comps?

· See a broad range of use cases
· Typically, a multi-cloud environment
· Back-up and recovery use cases, some are using hybrid solutions
· Query Grid is a data fabric engine that can pull data from other locations
o TDC and AWS in the cloud, QueryGrid can pull data from other sources Could Big Data come back to TDC in the cloud

· Native object store capability was introduced last year, this allows for big data
· It’s the part of the reason why we are seeing growth
· Advanced analytics functionality also allowing for more data science
· Pulling in sensor data, CRM data, real-time data and put data you don’t need into cold storage
· TDC was previously a closed system, it’s a lot more open now Front-end changes to Teradata
· SaaS, self-service are priorities
· Query in minutes as opposed to days
· Still focused on scale coupled with easy to use self-service
· Implied that one TDC customer does as much as all of Snowflake
Competitive Landscape, where you are vs. what market perception is

Existing customers view TDC as best in class, but market perception is different

The product we have is great already, need to work market perception and ease of use etc.

How are existing on-premise customers using the cloud

· Have a couple of customer doing full-scale migrations
· Also have customers that are starting small and migrating as things work out
· Seeing larger shifts to the cloud
· Have some customers that cloud only as well
How does Cloud change the way customers use TDC?

· Have had customers for decades where Data Sharing is common

How would you compare Vantage and your offering with the Snowflakes or Redshifts of this world?

· Have close relationships with everyone
· New GM for commercial cloud space
Vantage, is it for install base story or new customer acquisition
· Stumble upon new customers, but not part of the go to market
· Brought a new CRO that is better at hunting
· New customers are a future opportunity
· Cloud growth is almost exclusively existing customers
· 50% is from migrations and 50% is new workloads
· On-prem is low single digit growth and much higher growth for Cloud
· 100% Cloud ARR growth and mid-single digit ARR growth does not include new customers
· FY22 and beyond will include new logo growth
· TDC does not want to compete with SI and VARs Fully splitting compute and storage, implications?
· Continue to add value to Vantage
· Don’t think of it as a break in the roadmap / technology, it’s just taking advantage of cloud coupled with highly scalable tech How is Sales comp changing going forward?
· Did a bunch of external surveys and educated myself KPIs
· Steve came in and accelerated that focus
· Not known to market first, but the largest customers are still making their decision on the cloud
· Sales will now be comped on Cloud for the first time, on Cloud ARR growth and protect the base
· An accelerator for the new Cloud ARR (net growth, not migrations)
· Also incentivizing for net new customers for the first customers
Moving away from Fortune 500 to G10k

How does ARPU change from cloud to on-premise

· 1 dollar in the cloud > $1 on-premise > $1 perpetual
· Over half the ARR growth in the Cloud
Opportunity from legacy competitors such as Netezza

· We look at legacy vendors, multi-cloud on TDC creates an opportunity
· It’s a tertiary area of focus
· This is a big market, it is not a winner take all market
· There will be room for multiple winners, focus will be on enterprise customers who need performance at scale

A custom solution, as stable as a house of cards, built by a clown yelling at a donkey is not scalable.

@6oia+1ahV1nPY You don’t know what you’re talking about. Customers don’t love our cloud it’s unstable and many who have made the shift are thinking of leaving us because of the constant restarts. Our cloud is not a product it is something we spend a lot of time engineering for each customer and then hoping it works to have a stressed out SEM holding the bag for our incompetence

The stock is very cheap on a relative basis. Compare it to its peers and then compare it to the market in general.

If they can start growing again (not just 1 or 1 quarters, but 5-6 quarters in a row) then this thing could be a 4-5 bagger.

They have one of the stickiest products around. Large companies do not want to mess with their mission critical software unless they absolutely have to.

Look at the big banks, they are still running software from 40 years ago.

I would be surprised if they are not acquired for a hefty premium within 1 year.

What everyone is missing is management's comment that when a sticky on-premise customer moves his workload to the cloud, using a lift and shift by TD, the customer loves the cloud version and there is a 40% increase in workload. Imagine how much revenue that would imply if the entire ARR of 1.3bil moves to the cloud, and you put a discount 5x multiple on that...you can do the math with 112 mm shares outstanding. What else would CEO of Snowflake say, that they see TD as a threat 2 years down the road if Vantage works after all the R&D they are throwing at it. Come on..does anyone really have a monopoly on the hybrid-cloud/multi-cloud market, which is is potentially 40% of the entire market. Business inflected in 2H 2020, with native object store. lets see what it has for store now. with all this new cloud ARR info on the table, the stock has a $1bil increase in market cap, where just SNOW is worth 70 bil and databricks $28 bil!

Putting aside the lunacy of having a non- technical 6-figure SEM be on-call. You expect them to lead the GSO, which by CS standards is yelling at and questioning everything they do. It's unprofessional, yet CS leadership expects and champions this... largely because they are insecure and/or incompetent.

Mosy every SEM is stressed out, full of anxiety, working 60hrs+ and then demanded to be on call 24/7. Even if you wanted to care, it's hard to try for a thankless job.

This is with today's on-prem stuff. They have no idea, and we've all asked... what are we doing for cloud. The best answer thus far? "We are just winging it. "

Post ID: @zza+1ahV1nPY is likely one of the best and most thought out posts I've seen on this board in a long, long time.

I worked at another database company before coming to Teradata (think BIG and RED for a hint as to who) and I have told my team as well as CS management time and time again that the method we are doing is never going to scale. Management seems to think all we need to do is massage the code a little and it will fit. It won't. No other database company tries to set up table management like we do and our management is strangely proud of this. Yes, we're unique I guess but it doesn't work, so what have we won? Management simply does not want to put in the time, cost and effort into making the (massive) changes needed for it to work at scale.

I can't help but chuckle at the accuracy of the term "like a clown yelling at a donkey". I have been on so many S1 calls listening to an SEM yell at the support folks that this scenario fits perfectly. I have tried to defend the frantic support folks who are just trying to make a broken and incorrect design work, but the CS group never listens. Sometimes I think it is because they don't understand and sometimes I think it's that they don't care.

Legacy is growing around 1%.
Cloud is growing at 3 figures due to a very low baseline, and that growth rate will fall off fast! It was the first time they reported it that way for a reason.

CTO is out there, but knows his stuff. TD is still the best at what it does, but that's like claiming you have the fastest WWII fighter jet. Great, but you ain't taking on 21st century fighters. Problem is product development who is managed by HA and not doing much at all. They have big words, fancy pitches, and paid endorsers (Gartner/Forester). It's all window dressing.

Internally, we think 3 years is the best case life span left.

Appreciate your reply.

1. If the Cloud offering is poor, how is it growing so fast?
2. Was Apple lost during Q1?

5-6. Are they working to make it scalable? The CTO has an impressive pedigree, does he not realize their offering is not competitive? A decade behind is basically valueless.

8. From what I have seen and read about him, he keeps repeating "cloud cloud cloud" ad infinitum. Is he actually clueless about the competitiveness of Vantage and just surrounded by a bunch of yes-men?

It seems to me that they should split the company in two: legacy and cloud. Legacy can just milk the cashflow for as long as possible without reinvesting much. Cloud should do an IPO while it is growing and the market is hot, and with the funding, either acquire a minnow with interesting technology or reinvent their offering internally by going on a hiring spree of engineers.

I respect the research and investing acumen. My objective option is based off 25 years of trading experience and employment with TDC.

1) The switch from selling HW to subscription was a critical and key move. The last earnings call proved it, and sent the stock soring to ~50. The street loved 3 figure growth for cloud.

2) TD is net losing customers. In the past 2 years we signed on Wells Fargo and ATT as MAJOR wins. We've since lost a MASSIVE Ebay contract. Paypal is a foot out the door and heading to Google Cloud. Apple just ended a massive multi-year MS engagement which is due to the ineptitude of CS leadership. It is rumored this loss caused the closure of the Manilla support center. Pune and Mumbai remain. I can name at least 3 major clients who I know for fact are debating leaving.

3) CS is due to layoff their entire field support crew, which will further weaken their already dying services model. DH the SVP of CS is a leader of incompetence.

4) Consulting and PS has been dying and shrinking year over year as the push to cloud gets louder.

5) The Cloud-first strategy sounds great, and Wallstreet loves it, but technically speaking, the core competency is TD's patented software which allows it to scale to theoretically any sized database...even Exebytes. Already doing it with massive Petabyte systems. This scalability does NOT WORK in the Cloud. Either AWS/GC/Azure or Intellicloud.

6) Intellicloud - It is a running joke across TD. Even CS thinks they are a joke...which is like a clown yelling at a donkey. They are a decade behind, there is no way they can catch up.

7) Leadership - The company has laidoff over 25% of its workforce. We were over 10k in 2018, and are now about to be sub 8k after the next round of layoffs.

8) Leadership - CEO is a rookie and has accomplished nothing. He's yelled cloud first, made some VERY questionable hires, and is largely disrespected. His worst higher was basically a diversity play, some kid who is so good at being a Chief Strategy Officer that he outsourced his own work to the consulting firm he used to work for! McKinsey is only going to cause more nightmares for TD. Bane nearly killed us. I have zero issue with his personal life, but I know more about his lifestyle than I do about what he plans to strategically alter with TD to make us competitive.

9) The opinions of this board: They generally reflect the majority of conversations I've had internally. I've often gotten valid news about upcoming things because the ELT is so secretive and incompetent.

Personally, I sold all my TDC stock at the last quarter run, and I was 95% sure it was going to be a blow out quarter. I think they will probably do okay for Q2, but I get more and more pessimistic for following quarters. The reason the fundamentals are looking decent is because they moved to an ARR model, kept the major accounts happy, and have been cutting cost like crazy. Those are short term items who fractures can't be hidden long-term. The entire future of the stock is hinged on their ability to market the Database in a Cloud world. Cloud first is narrow and mis-guided vision as they don't have a product that can work in the cloud at scale. Snowflake can, and most clients are testing out both. If TD is such a key product for large companies, how come the biggest tech companies don't have TD? It's too expensive, and too complex to run and manage. The stickiness of the product is valid, but if that's your long-term play go buy flex tape; it's stickier. Every sales campaign is defensive, and every sale is hard fought and barely won. This is getting worse and worse, and the AE turnover last year saw some INCREDIBLE top 1% folks leave. The CRO and the Head of Americas Sales left too...both were very high caliber folks. Most wanted the CRO to be the CEO...instead they hired an untested and inexperienced CEO who is failing to impress anyone.

TLDR: TD does not have the product or strategy to succeed, and while the stock may have additional run ups for the next two quarters, I believe it to be a viable short long-term, and will likely trade Call Credit Spreads or just go long Puts on any major runs. When the stock crashes, it will crash into the teens.

Thank you very much for your replies.

It seems the key for the stock is to shift as many customers as possible to the cloud-based Vantage product, as the subscription revenue gets the highest multiple from Wall St.

How does Vantage compare to Snowflake, in your opinion? In the last release, the CEO claimed a major customer tried Snowflake but shifted to Vantage. However, if you read the comments from the Snowflake CEO in the most recent earnings call, he was specifically asked about Teradata and he said that since he has been CEO (2 years) Vantage never once entered the conversation among customers looking for a cloud-based product.

In terms of fixed costs, 10,000 employees for only a couple billion in revenue is quite a poor metric. Also, I was looking through job titles, and there are so many VP's that I lost count. Is there a fat layer of middle management that needs to be cut, in your opinion?

As others said, the current condition is worse, but does it going to be worse? I don't think so. I am cautiously optimistic it's going to get better from now on. As per the stock, I don't think it's going to explode or decline in the next one year but who am I to decide that. If you are trying to make a quick buck then a big NO. If you are willing to hang on for two or more years, I say you can start building up a position.

A business critical EDW is about as sticky system as they get. Many customers have tried leaving Teradata but failed. Many are trying to leave now. More would leave if they could. TD never cared for new logos outside of fortune 500 until very recently.

5 CEOs in 5 years: none of them too impressive. Declining revenues for years until last quarter. There is always a new consulting company rewriting the strategy, as there is currently. ELT has a serious lack of talent and they really struggle to attract top leaders: previous CRO was bought with 10m/year and lasted less than 1.5 years before leaving, the CRO before that was an obnoxious idiot who lasted even less before he was fired.

The product is still holding its ground and deployment option flexibility is good on powerpoint. There used to be substantial quality problems with a previous product version, but that seems to be improving.

Services is a mess: poorly organized, poorly enabled and continuous layoffs every quarter. They are desperate for partners but struggling to attract any.

It's an unpopular opinion. But I believe we have a decent shot.