Niche is our forte, and we would like to keep it that way: Mikael Bisgaard-Bohr, EVP & CBO, Teradata

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Published: August 1, 2017 8:35:36 PM

Software services is a niche market and Teradata is a niche player within that market.

Mikael Bisgaard-Bohr, Mikael Bisgaard-Bohr news, Mikael Bisgaard-Bohr latest news, Teradata, Mikael Bisgaard-Bohr interviewMikael Bisgaard-Bohr (Youtube)

Software services is a niche market and Teradata is a niche player within that market. In conversation with Ishaan Gera at the Teradata conference in Nice, the Executive Vice President and Chief Business Development Officer for Teradata Mikael Bisgaard-Bohr discusses the companies growth plans, the market and why they wouldn’t go for a mass-market solution and would like to stay a niche player.

Q The impression that you get from Teradata is that the focus is on big companies, the likes of Coca-Cola and Siemens. Aren’t you ignoring a huge chunk of the market by ignoring the smaller and medium enterprises?

Our analysis shows that 500 biggest opportunities not the biggest companies—it could be government, research institutions—as far as we can tell is anywhere from 35-55% of the spend. So, we think the opportunity is huge. You may think of us as a big company, but we are a small company with 10,000-12,000 people a lot of it is services, R&D. We have very limited capacity to go and address customers. We have no way of addressing the 2,000 or 3,000 or 4,000 largest companies in the world. We do not have the manpower. And, so it would be foolish to do that.

If you look at any big customers we have. Even if we think we are doing good when you analyse our market share inside each of these companies is less than 25%. In many cases, it is less than 20%. Our objective is, thus, to win more business from the 500 largest, but equally, expand the business with the ones that our customers. We can easily double Teradata if we do a better job in those two dimensions. If I can make Teradata $5 billion company in five years, I think my shareholders will be very happy.

Q EMEs are looking at some of the big companies spring up. When you say that you are going to concentrate on big brands aren’t you ignoring next Alibaba or next Bharti? Is that a chance that you are willing to take by concentrating on big conglomerates?

We are not religious about the 500. Some of the Indian companies, like Indian Oil, can be 500 largest. If you look at Bharti or any other Indian company, the revenues are not really big. Vodafone Germany has three-times the revenue of largest Indian telco. But this is not what the opportunity is all about. When you have a mobile phone company you generate a CDR for every phone call. Whether I pay $10 for that CDR or `1, the amount of data is the same. The fact that Bharti has 200 million customers, the data opportunity at Bharti is 10X that of Vodafone Germany. We don’t look at it as revenue. We try to understand market opportunity. We are very strong in telco, not so strong in life sciences.

We are trying to become smarter as we look at the opportunity. It is a real risk, we may miss the next Amazon coming out of India. We are trying to be very structured about how the market evolves. We are really focussed on high-end of the market. It is a focus, more than an absolute number. If we do get to $5 million, then we can do top 1,000.

Q People recognise Teradata with products like 2800, 6800. And, it is still in the industry. What happens to the legacy businesses as you go more consumer-centric and more business-centric, and less IT centric?

The strategy is business outcome led, technology enabled. So, we are trying to create a capability that makes it easier for our customers to use the data. If we make it easier they will consume more Teradata. We are not interested in building a consulting company. We are using consulting to build up skills, knowledge and make that available to our customers. We are a data company. Our core competence is understanding data. The transformation that you see is, three decades ago we started as a hardware company, 15 years ago we changed to become a software company. Now, we have a hybrid model. We are a software services company. And we don’t want to sell the two separately.

Q You see the market consolidating, and you are bleeding cash on R&D. Is it the right strategy?

Let’s consider mobility. In the ever changing world of cars, there is always space for a premium car maker. This premium car maker would never have the volumes of a KIA or a Tata has. There are two different business models. One business model says that I am going to make a tonne of money by selling cheaper and making less on the absolute dollar. The other one is I am going to make fewer things, which are sort after for people who really need them and are willing to pay a premium. I think every company needs to triage which dimension they wish to work. It would be suicidal to go after the mass market.

Q Extending your mobility example. Let’s say one of the mass market companies like Amazon is Uber, while you are a Limousine supplier. Now, while Uber is happy capturing the mass market with low prices, being a bigger company it can always get a few limousines and get into your category if you are profitable and take that 20% of the market that you have.

Amazon or whoever wants to compete with us, cannot buy their way into our market. They have to do R&D, which I am not saying they can’t, but it is not so simple. We have thought about that for last ten years, and come to the conclusion that it would not add much to their top line.

Q A lot of problems stem for pricing, packaging and go-to market strategies. You have addressed go-to market strategies, what about pricing and packaging.

I don’t think pricing is the problem. There are many other things that can be the cause of why we didn’t grow. Teradata is a niche product. The customers that need those things will need to pay.

(The author was in Nice on invitation of Teradata)

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