Another post said Teradata went from 1150 to under 800 customers over the past 5 years. That is alarming. Do they report this? If so what are the numbers? If not, why. They sell analytics software so surely they have the data. This may be the most telling metric of all.
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Take a wild guess.
Snowflake reports it’s Net Revenue Retention Rate and New Customer wins. Why would TDC not do the same? They obviously have the data?
This is something they will not “spin” since under Sarbanes Oxley someone might end up in jail. Don’t expect any discussion on total customers or new customer wins from SM. “We don’t report that” will be the response.
Several members of the C suite sell at $47 (several trades in blackout period) but the share price moves to mid-$50s shortly after the Q2 results.
Then they hope that the investors support a higher share price and/or re-rate because of what's been presented at an investor day...hard sell that one.
It’s 100% transactional since all the ELT wants is short-term stock appreciation. They can claim “success” and cask out their RSUs. None of them have an ounce of loyalty to Teradata. The RIFs and moving customer service to IBM are part of this transactional mentality. Even their bonus calculations are not based on revenue growth.
Customers are spending $Millions with SIs just to get off of Teradata….that’s how much they want to leave.
The migration costs are far more than the Vantage licenses, which tells you all you need to know about the future of those customer investments. Because if you are happy spending much more money to leave than it would cost to stay, then you must really want to leave…..
Failing a direct migration, once the customer data is in the cloud it should be a much easier and cheaper migration process with a simple cancellation.
Some of the smarter customers will take the cloud DIY option, just to set up their offloading/future migration and why not. Sales are a willing advocate, participant and supporter because they get a cloud accelerator short term and won’t care too much about the next year - probably because they don’t plan to stick around that long.
It’s all become 100% transactional and the SPIFs drive that behavior fast. The deep relationships that the company once had with many customers are long gone.
Churn ‘em and burn ‘em.
Good point. Many of the Teradata customers who “lift and shift” to AWS or Azure are doing that as part of a longer-term plan to migrate totally off Teradata. So there is short-term ARR that will be lost in 18-24 months. Once the data and apps are in the cloud, the next step is a database migration to Snowflake, Redshift, Synapse, or others.
A good point although customer departures and revenue erosion are not restricted to on-prem only…
Out of the ~800 customers left, which ones are not planning to find an alternative to replace or optimize/downsize systems by offloading workload when possible ?
Local regulation may hold some churn back but that’s limited to certain sectors.
And new workload isn’t landing just because migrated systems are in the public cloud despite the claims. Wishful thinking at best.
Katy Huberty, Morgan Stanley - I want to start by asking, Steve, a question, just looking at the ARR metrics year-to-date relative to where you exited 2020, total ARR is flat, up about $1 million. Cloud ARR is up $33 million. So that would imply that there's some churn in your on-prem business.
Katy is no blockhead😀 this question highlights the issue
Given the quarterly revenue has been very similar recently, it sounds like it’s become a shell game of sorts - just move the money around until nobody knows where it really comes from.
In the background, you can distract investors and focus on improving earnings (during COVID) by opportunistically cutting costs (people, offices and T&D expenses etc) and buying shares back.
Works for a while until someone asks some more difficult questions about growth and longevity of the business model, then it becomes clear that the customer attrition:new logo acquisition ratio is actually the wrong way round.
Maybe some of the Street analysts wised up having seen through the investor day pitches and significant share sales by several of the presenters.
The “requirement” for this should come from astute investors who should demand this data. With so few customers and a relatively high annual revenue per customer (>$500K) they have to be tracking this. If not, the CEO should be fired. It’s a hard number to spin.
Don’t report this number or new logo wins either. No requirement to do so.
The ‘rapidly’ growing cloud business is based on existing customer migrations from on premise, which are typically deals that produce reduced margin and lower revenue as it shifts to ARR.
Why do those types of deals ? Because otherwise those customers would join the many others that already left and there would be no growth or customer story to tell.
Put simply, it’s a deflection that buys a bit more time to sell more stock and extend tenure on executive resumes before the next gig comes calling or the exec severance package kicks in.