Thread regarding Teradata Corp. layoffs

Final countdown (revised) !!

To avoid bankruptcy, TDC must urgently overhaul its strategy. One more year of apathy and delays, and the lights will go out for good.

It's easy to agree on one thing: AI has launched Data Management & Analytics into an interstellar orbit, where only a few can successfully navigate. On one hand, TDC will never transform into a startup—it's too old, too formal, too heavy, and too rigid. On the other hand, directly competing in AI against the likes of Microsoft, OpenAI, and Google is simply out of reach.

But all hope is not lost. There is a safe harbor. From its inception to its decline eight years ago, TDC has always excelled as a niche player. Focusing and thriving in a specialized market is in the company's DNA. The challenge now is to quickly chart a course to the Promised Land. Where to go? Perhaps focusing on a single tech capability critical to AI, targeted at a select set of industries within limited geographies, offering a unique, hard-to-copy bundle of high-value services.

One thing is certain: returning to the niche won’t be easy. It will require cutting ties with some "beloved" areas, discontinuing products, and even letting people go. Locations will need to be closed. This is the price of survival. But the time to act is now. Difficult decisions must be made immediatly.

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| 1301 views | | 7 replies (last August 17, 2024) | Reply
Post ID: @OP+1u1hQBRa

7 replies (most recent on top)

Someone wrote : “I’m not sure what you mean by “persistently low revenue”. I don’t think you fully understand the business challenge we have…”’,.
He then developed weak tactical ideas. Mr Tactics can’t see further than free cash flow horizon even though TD has to restructure urgently and fiercely or simply die.
SM has surely found a good candidate for the top of the RIF list .

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Post ID: @2yni+1u1hQBRa

This diatribe rings of a 'board' meeting which for all relevant purposes was the only thing that has grown positively in the last 10 years - from 4 to 14 of the mostvclueless dimwits and ingrains (incl Ms Mic$$$$t who brought Mr Namaste, leaves in the middle of the night). Should have kept Mr Milwaukee tools

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Post ID: @1tqy+1u1hQBRa

to be fair, we knowingly made the choice to trade on-premise revenue for cloud revenue (it is valued more by the markets!). In fact that was the objective for years, move our customers off premises to the cloud. It was a mini-doom loop, as we moved customers to the cloud we made it easier for them to leave Teradata for our competition, all who are easier to use, and more cloud enabled.

Several sales people who renewed on-prem deals were let go even though the customer was not able to go to cloud (mostly to Lake) given the shortfalls of the product.

It is funny that now we are re-embracing the idea of a hybrid strategy while our competition is trying to get into the data centers. As there is no real strategy we constantly react to the customers and competitors and are therefore always behind the trend.

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Post ID: @1qej+1u1hQBRa

I’m not sure what you mean by “persistently low revenue”. I don’t think you fully understand the business challenge we have…

Revenue over the last five years has fluctuated up and down within a very tight ~5% range, as cloud goes up at the rate that onprem goes down. During that same time, both gross and operating margins have been improving actually. The problem is that we are in a growth market of 13% while we are flat on revenue, which means we continue to lose market share. We continue to generate about $400M in free cash flow every year. Again, the problem is not cash. It is the fact that we are operating with a financial strategy as a value company, while our competitors and market all dictate a growth strategy. Eventually, our market share will shrink to irrelevance and the stock will continue to be priced at a lower multiple than the rest of our market, leading to being an acquisition target.

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Post ID: @1zsd+1u1hQBRa

Sorry, it’s not a matter of ignorance, but rarher an undeniable truth : bankruptcy is certainly a threat !
Cost-cutting has its limits. If you continue with the same business strategy while enduring persistently low revenue, you'll inevitably burn through cash. So, even if your current cash flow is stable, it won’t last forever. Bankruptcy... then turning off the lights and going out of business.

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Post ID: @cha+1u1hQBRa

Agree with the challenges you stated but... talking about bankruptcy is ignorant. Bankruptcy is the outcome of cash problems, and that is one of the few areas we're doing fine in. How else would we be able to buy back hundreds of millions $'s in share buy-backs... What would happen if we don't solve this is that we'd shrink to irrelevance and then be acquired if we get cheap enough... And that is tbd...

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Post ID: @hep+1u1hQBRa

I agree, 100%.
s.m.

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Post ID: @zku+1u1hQBRa

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