Alright, everyone. This one? Okay. Good. Well, Thank you again for joining us here in San Diego, Teradata's new headquarters.
I'm Greg Swearingen, Investor Relations. We have a good number of analysts here in the room. We also have, the number on the webcast. The webcast is being replayed. So you can go back and review that to be archived on the website at teradata.com.
I'd like to direct your attention to this important information regarding forward looking statements as well as non GAAP financial measures we'll be discussing today. Our discussion today includes forward looking statements that are based on current expectations and assumptions. While these statements reflect our current targets and beliefs, they are subject to a number of risks and uncertainties that could cause actual results to vary materially. The risk factors are described in Teradata's filings with the SEC and on our website. During today's presentations, We'll also be discussing certain non GAAP financial information, which excludes special items such as stock based compensation expense, We will also be referencing other non GAAP measures such as free cash flow.
More information about these non GAAP measures can be found on our website. First off, this morning, Vic Lund, Teradata's President and CEO, will provide his perspective on the progress of our successful transformation. Then Oliver Ratzesberger, Chief Operating Officer will then provide an update on our strategy followed by Rima Potter, EVP of Product And Technology, who will provide an overview on our new Teradata Vantage That's our new analytics software platform for pervasive data intelligence. Then Steven Brobes, our Chief Technology Officer, will then come and talk about some real world customer activity. Following Stephen, then we'll take a break.
And then Mark Culhane, CFO, We'll bring it all back together from a financial perspective and provide our targets for 2021. We will then provide an opportunity for a good healthy amount of time Q and A, and we expect to conclude the meeting by or before noon. So we know you have a number of you have flights you're trying to catch. So with that, I will turn it over to
I tried the T shirt thing, but you know, so as you get older, you shrink and it's true. All my grandkids are getting taller than I am. And this thing that appears on my side is not a fact that I've gained weight. It's just that there's a compression that occurs in the body and I don't feel comfortable in the T shirts. So So I'm not going to wear it.
I think I don't feel comfortable in a t shirt. You got to see
me in the morning when I get out
of the shower. It's real ugly. I won't look at the mirror anymore, but that's another story. Like to welcome you all. Thank you for being here.
Those of you there were here last night. I hope you got a sense that this is a new Teradata, one with enthusiasm. We got a plan we're going forward. We're excited about where we are. We're confident in what we're doing, but not arrogant as we move forward.
New digs we've got, I think reflect, our change in attitude around here and, and I hope today you get a sense of It's just been a little over 2 years, since we did this last time, I was new at the time. And at that time, I set out 2 goals for myself. First one was to build a management team that could drive Teradata Forward. And then the second one was, keep with that management team to drive a strategy that could build momentum to have a sustaining and growing valuation for care the best thing for our shareholders and for our folks and, and so that was my objective. We at that time introduced the start of where we are today and at that time, we had a strategy And that strategy was around megadata companies, the large companies who use and generate a lot of data.
We introduced at that time Teradata Everywhere. Teradata Everywhere was our first thing where you could move software across anywhere. It could be on prem in the cloud, wherever you wanted it, provided benefits to our customers of being able to place a bet with not having to figure out where they were going to use that vent. Further, that was the first offering we had ever had as a subscription, and that's the only way you can buy Teradata ever. It has to be by bought on a subscription basis.
And I think from the numbers you have seen, we've had traction on that. And the other interesting thing about Teradata was the Teradata everywhere. Was it was the first time we talked about the ability to buy software separate, from hardware. And so we started talking about, about where we were. And that and then the 3rd element of that strategy was we were going to build this consulting organization that was going to go out and develop apps and then come from the outside in to drive consumption of Teradata in our customers.
We announced that and at that point, I started also building a team. And I think we've had great success on that. Those of you were there last night and got to meet all the folks that were there. I think you We'll agree. We've got new folks.
We have nine people on the LT, 5 of them are new to Teradata, and the 4 that were at Teradata when I arrived here are all in new positions. We've used those folks together to figure out where we need to go from now, where are we, how do we drive outcomes, we took what we knew. We went out and engaged with our customers. You've all heard me say on calls and everything that I think the key to any successful company is they have to know what their customers want and that's what they have to deliver. I think the tech world is fraught with people who go out and find a great technological solution and then they go search for a use of it, right?
And we've done the other thing. And that over the last 2 years, that journey has led us, to where we are today. When we got with our customers, we found that we had these megadata folks and they can be the bulk of them are very large companies, but some of them are growing and coming aggressively. But they all have some key characteristics, And so we picked that set for a reason. I mean, if we when we go out there, the first thing is, like I say, they're huge.
They've been around a long, long time. Right? They're massive, massive companies or they're very complex companies. Take your pick. The other thing that's, characteristic elements, they generate huge huge amounts of data and it's growing exponentially.
The third thing is that they have these very, very complex ecosystems. It's grown over a long period of time and they got 1 of everything, right? Maybe 4 of everything. And it's across there and they're having a hard time figuring out exactly what is all the stuff. I was talking with a new Chief Data Officer of one of our customers, we just expanded our presence with them.
And this was an individual who had run half of the world for this business. They he wanted to come back in and and deploy data against the business. He thought they could do a lot better job in his first task, was to find out how many data instances they had. And they had well in excess of 5000. Now that can include a laptop with Excel on it and all that.
But even in that case, it would fit into the corporation. So they've massive amounts of data and it's growing. So very, very big problem for all of them. The next thing being big companies and most of them being public, they are very interested. They have to drive earnings.
They have to drive revenue. They're very risk conscious cyber security or the risk of missing what they've told the streets. So they want to control the risk, that they have, and then they also are interest particularly in this environment in controlling costs. How do we expand and become analytics without a massive increase in our cost structure? And the other thing, and I think in life, you know, you can be super smarter, you can be lucky and sometimes having both is a good thing, but I think we introduced our strategy at exactly the right time.
These customers have been down. First hadoop showed up and it was going to be the answer. It was going to be the silver bullet and then the cloud was going to be it. And before that, it's been a lot of things. But at the end of the day, our customer base understands there are no silver bullets.
This is a process that has to be taken on. It has to be worked through. It has to be approached in a thoughtful manner. You have to demonstrate results along the way. And that's where we get to our new strategy advantage that you're going to hear about today.
The vantage focuses on that. We spend a lot of time trying to figure out how do we deal in that environment and how do we help our customers succeed? Because we know that our customer success drives our success. If we don't help make them successful, we won't be successful. So it's key, that that's built around that.
The other key difference that you'll hear today, is consulting is now focused around driving our product from the inside out. Advantages in there. Now from what you saw 2 years ago, that's going to have the main implication for everybody in this room is that you're going to see our consulting revenues are down. Because we're not chasing all the consulting stuff around the world. There's a lot of stuff to do that.
But we are consulting is a key part of us, but we want to deploy our smart people in a way that makes our platform better. And so that's what we're using. Wherever it is, we need our consulting people focused on our on our strategy but while it does mean the consulting revenues down, actually our product mix and everything is much better than it was 2 years ago and actually we think creates a higher valuation for our shareholders. So, you know, at the end of the day, it's a share price, not the revenues that matter. And we think that's exactly what this strategy does.
So I'll be back at the end to kind of summarize. But again, I want to thank you. I hope you sensed the energy and enthusiasm we have around here. We are excited about where we are. We think we have spent enough time with our customers that we actually have found a holistic approach to the problem of analytics.
And it's more than technology. In fact, another point solution is the last thing you need when you already have 5000 data instances in your organization. So with that, I think we're going to roll a video and then Oliver will follow it. So thank you all for being here.
We have a brand promise that we should be designed Q. The mission is to focus on our core values being quality, safety, and environment. We try to gather data on both our customers. And also from the vehicle and how the vehicle is being utilized The cars need to have the help to be able to be autonomously driven. For autonomous drive, you need a lot more detailed maps and real time updates on maps when it comes to obstacles in the road.
If seasonality that are coming into this area to warn them. More and more features in the vehicle will depend on the connectivity. Ultimately, we hope that we should be this sentient enterprise to be the one that could provide new feature and continue to develop models and provide new business opportunities for both ourselves, but not the least, versus words.
Great. Good morning, everyone. Thank you for coming to beautiful San Diego. I hope you see, a very different Teradata today than yourself, for those of you that were here 2 years ago, part of it is the work environment, a big part of it is our people, Before I start, just one little fact here, we just got voted in large part by our employees, as one of the top workplaces in San Diego. That was not the case just a few years ago.
This campus was very different the energy in the room was very different, and it's a big part of our transformation is to change who we are and do it with our people. And and you've seen the branding that we have launched this year that has been driven by our new CMO, Martin, who is also with us here today. And so there's a lot of change happening. What I want to take you through is the essence of what our strategy is and what we are seeing out there and what's happening in the world of these very large mega data companies, the top 500, how we have referred to it over time. As I do so, I want to take you through one of these conversations, and Vic just gave you a little bit of sense of that.
These are conversations that are happening at an increasing frequency, us having conversations with C level executives of the largest companies and getting getting their perspective of how they need to change their companies. This the last 15 years or so with with the advent of open source with a lot of new technologies, with a lot of choice has gotten a lot of companies into that state of like let's adopt the best in class, so to speak, technology for every problem that we have, at least that was their belief, right? And for every new problem, another team in the company found another technology that supposedly was better than any other technology that you had before. And what it has led to is that executives are now facing these problems of, you know, you heard 5000 data silos within a single company. That is not a one off.
That is in every bank and every retailer and every telco and every car manufacturer that we walk into, that's the scale of magnitude of a problem that we have. And he's it has made it into the boardrooms of these companies. In fact, I just 2 weeks ago, saw the top 5 goals of the CEO of 1 of the top 2 banks in the United States. And the number 2 goal on there was simplification simplifying the business model, simplifying the technology infrastructure because it has become unsustainable from a couple of dimensions. First of all, if you operate that many instances of technology, you are tying up thousands of headcounts you're quickly spending 1,000,000,000 of dollars a year to operate that.
Another bank in the United States has 800 risk systems running, 800 instances of risk modeling, and it's becoming increasingly expensive to spend like $2,000,000,000 a year on this kind of problem. And it's making it all the way up to the boardroom for multiple reasons. First of all, In a world that's driven more and more by efficiency and operational excellence, obviously, there's cost pressures that companies are on The whole problem of cybersecurity, which is getting bigger and better by the day, is taking risk and at the various boards to an entire new level. And when you have that many instances of technology out there, your risk profile. In addition to the cost of operating that just goes through the roof.
To keep 5000 instances secure, is just becoming an ever increasing problem for these companies. And so these executives are now coming to us and saying, you know what? We are realizing that we were 2 point solution technology instance focused over the last couple of years. We have, yes, several of every technology that we have in every version under the sun of every programming language, every processing framework, every database, whether it's in the cloud or on prem, and we need to simplify that. And that is a big part of our strategy and why we are focusing on these very largest of companies because the opportunity here is huge.
It's not a simple problem. You don't turn off hundreds of instances overnight. Right? This is clearly something that needs to be implemented, but they're all looking for who is the solution provider that can do this at scale because they have tens of thousands of employees. They have hundreds of thousands of applications that need to run and almost every other technology on the planet today limits them in terms of scale.
Yes, you can stand up an instance and run 15 users. Or maybe some of the newer cloud things, they say, okay, we can run 80 users at a time. That's just not anywhere close enough to consolidate these infrastructures. Into a much more simplified way. So 1,000,000,000 of dollars of spent in a single customer, and we see this across the entire customer base that we have.
The problem with that current landscape is in addition to risk and complexity they're spending 1,000,000,000 of dollars on that, yet a recent survey that we run-in this customer segment 74% of executives tell us that the technology is too complex. They're not getting the things done they need to get done. Because the projects take too long, right? It's overwhelming for their, for their IT departments to operate that and to make changes to it. A lot of these things that have been done for Agility that's built another point solution because we can do it very fast in 30 days 90 days have now become tech debt to them that they're struggling to even keep a life and keep secure just patching these systems up and dealing with failures of these systems is keeping them very busy.
79%, almost 80% of their employees say they don't even have the data that they need on a daily basis to make decisions, even though they're spending 1,000,000,000 of dollars on that. And so more and more of these companies are getting to a realization that if we want to significantly increase our productivity, reduce the risk We can throw another $1,000,000,000 or $2 at the problem and expect that to scale. We need to have it differently. And this is This is where simplification is really starting to become a theme that we are seeing at a lot of these companies. This is where our strategy starts to come into play here the way, the strategy that I'm going to talk about here is not a new strategy.
We are on a journey. We started with Teradata Everywhere. We've implemented that over the last 2 years, we have learned along the way. We've made great progress for the last eight quarters, and you've seen how the adoption in our customer base has accelerated, right, specifically when it comes to buying software, subscription based business, right? But we've also taken our time this year to take a step back and say, okay, this is a great starting point, but where does this need to go next, right?
And so let's start with what we believe or what we know, what our customers are telling us, the solution to this problem is. They want to leverage 100 percent of the data, 100 percent of the data to uncover real time intelligence and do it at scale, not a data silo here, another copy here, 50 users at a time, they need capabilities where they can trace and track how data is flowing through their organizations, who has touched this, who has had access to this, to in part because of security and cybersecurity, knows in part because of simplification because every time they have to make a copy of data, they end up spending more technology time on building the copy, maintaining the copy, keeping it up to date, repairing the broken data dealing with these concepts like data drift that are all over their organizations, and it's really distracting them, right, in Our strategy is here to enable these companies to rise above that complexity and that cost and that inadequacy of their of their analytical landscape and really find the answers to the toughest challenges that we have. And you've seen that also in our re branding and our messaging and our storytelling that we are focusing much more on the answers, on the outcomes, rather than on a technology stack underneath it.
And I think this is an important part. And we frame this up and we call this pervasive data intelligence. And by the way, we have gotten very good feedback from customers, customers that we leverage to test our messaging and what we are doing there, they immediately felt like, yes, that we can relate to that. This is what we really need to provide safety intelligence it's 100 percent of the data at any scale to all of our to all of our users and for all of our processes. And we're using this to define kind of a new standard, right?
You have known us as the data warehouse company for the last couple of decades. This is a higher level. This is we have taken this to the next level and we'll talk about vantage and what vantage plays in this environment, right? But it has given us a core in the world, and that allows us to really take this to our next level. So To sum it all up in one sentence, what the strategic focus is is really to rise above the complexity, cost and inadequacy of today's analytics landscape.
To deliver pervasive data intelligence to our top opportunities. And you heard Vic say that, and you will hear us a lot more we're using the term megadata companies, and I'm going to get into that here for a second, because it's not whether it's 499 or 501, top companies in the world. It is the largest companies that produce the most amount of data in the world. And this is where we have that unique opportunity. And those are the companies that require the next level, that's pervasiveness of data and intelligence.
The analytical tools brought straight to the data, not just a data lake where you do one thing, a data warehouse, where you do some reporting on it. They want a single platform that brings the data lakes the data warehouses, the analytical platforms, the languages together in a single to operate second more and more of them are opting to not even operate that stack themselves anymore. And we're going to talk about that in a second. And it's a theme that I think you've seen the industry overall, with cloud companies and cloud app companies are abstracting away technology underneath it and really focusing on the business outcomes rather than how to build the technology underneath that. And this is just to reconfirm.
And by the way, when we started this year, we went into our strategic planning cycle for the year, And by the way, we have done a larger strategic planning cycle than we have probably ever done before. We took a bigger horizon When we built strategy this year, we took a 10 year horizon.
For the
first time ever, we said 10 year from now, who do we think we are going to be as a company? And we all realize that nobody can predict how the world is look is going to look like in 10 years from now. But we did a lot of scenario planning and looking into where do we think the world is heading? And it gave us a pretty good idea of the core components that are out there. Needless to say, Terry, there will be a very different company in 10 years.
So now we are not telling the world precisely what it is that is our 10 year plan, because we believe that is a lot of competitive advantage, that we are coming out with, as part of that. But we based it off of that 10 year view. And then we took it back to, okay, what are the next 3 years? What are the next steps in the evolution of Teradata Everywhere. And you saw us this year do Vantage and launch Vantage as the next step and we'll give you a little bit of an idea of what is coming in 2019 that will evolve us even further along those lines.
But ultimately, we started with reconfirming or looking at Top 500. Is Top 500? Is that the right opportunity that we're looking at And we ask ourselves these very serious and tough questions all the time, and we came out convinced more than ever that we have the right market segment. We have done even more segmentation within the megadata companies and applying our resources even more specified by industry and by opportunity and by behavioral segments that we've seen our customer base. But overall, these are what we call the megadata companies of the world.
These are the largest, most demanding, largest scale users of data deleverage data for everything as a secret weapon to differentiate themselves in their industry or to potentially redefine how an industry is operating. They more and more demand tightly integrated solutions. And so What we what we are talking about here, by the way, is what our customers are telling us, right? We have really gone into this megadata companies, And by the way, we have changed who we are talking to in these companies. We've always been listening to companies But sometimes we have been listening to the wrong level in the company.
We have been listening to feature requests. I need another feature here and another feature here and you make this query run faster? Or can you give me this kind of data set, right? We are listening more and more so to their C level executives, even their boards in terms of what they need to do and what they need to accomplish. And they are demanding more and more so tightly integrated solutions.
That it can accommodate that scale and give them the speed, where they don't have to divide it up in silos and point solutions just so that they can overcome the scale problem that they have. They want less and less to be even involved with having to deal with scale. A lot of companies of them have tried to become technology companies and everybody in the last 10 years have so many companies said, oh, want to be like Google, right? I'm going to hire lots of PhDs and be potentially, maybe I even built my own hardware.
There's a little bit of a
rethinking going on right now. It's like companies have some companies that have done that have since closed five hundred stores because they've and they have realized that that they've done technology experiments, and they've forgotten about focusing on the business and the hardcore problems that fraud and cybersecurity and supply chain and churn is doing to them. And ultimately, they're also telling us that they need choice. This is where we started debt, of course, with Teradata Everywhere, and it gets reconfirmed over and over. That megadata companies of the world have complex environments, complex ecosystems, lots of them have big data centers, cloud, is certainly a big topic for them.
Having said so, the vast majority of them is not planning to go wholesale just into one cloud. They want to leverage cloud for parts of what they're doing. They they also believe that they need a hybrid environment where they can be in the cloud as well as in their own data centers. They also realize that sometimes they have to make changes to some of their choices. Some companies that have picked AWS as their preferred cloud provider last year are now back this year and saying, well, that we're also selling to, the world's largest retailer, we realized that we probably can't be in AWS, and we need to move to a different cloud and operate there.
And so that choice and flexibility is becoming a decision criteria And a lot of the feedback that we have gotten was, yes, it's Teradata Everywhere strategy makes a lot of sense. It really allows us to make decisions quicker because we don't feel locked in. This is not the old Teradata. It gets amplified with a new brand and the new messaging that we are telling. And it's part of that.
They also tell us though, like we love this turn of everywhere thing. If you could just do more analytics on top of that, if you could help us bring all of these one off tools together, because we literally have one version of Python or each version of Python under the sun running in the company, each version of R, each data store, data lake, object store file system that you can think, and the management overhead is just getting too big, We would love to consume this as a simple to consume stack and as much as possible as a service. So let's talk a little bit about the opportunity here. And I need to take a moment to describe what this means because this is not your average company market sizing. This is not what IDC or others track or define.
The world's mega companies are a customer segment that we have defined based on various conditions and various things And we've benchmarked this year, this segment, based on our progress on the last 2 years, and based on what we are seeing in terms of traction material to everywhere, traction with Vantage. And we have benchmarked ourselves against those accounts where we have been most successful. And we looked at the share of wallet that we have increased in these accounts. And we have done this by industry for all of these customers in the top 500 or megadata companies that we have. And we said, if we were to raise the entire customer base by an equal amount that we have done in the early adopters of that, That's ten times the opportunity than what we are to do.
That in itself is in excess of $20,000,000,000. Right? This is not a market segment that anybody at Gartner will never track that, right? This is not the overall industry. We know that pick data and analytics over about 2022 will be in excess of $260,000,000,000 of a business.
We wanted to bring that down to specifically the companies that we are focusing on and what it takes to be successful in that specificity that we are driving with our strategy into this company, like we've never done before. We are truly treating our golden customer list as the single version of the truth and applying every dollar we spent in growth, in investment and tying it back to what are we driving in this in this space. And that level of focus that we have applied is the reason why we have accelerated faster with adoption of subscription. It has allowed us to do these things that we said. And for the last eight quarters, deliver consistently.
Every time we said we would do something, we did that, right? And we're seeing that that's accelerating. And this is the foundation of of of where the strategy is going. So naturally, what I'm telling you here is that our focus is to aggressively grow that share of wallet. Within this customer base.
And yes, there's also other megadata companies out there that are not our customers yet. And so yes, we will go after new customers around the world, but given that it's a top 500 and we have what 320 or so of them as customers today, it's up at 100 or 1000 of new logos that we are chasing. We are very specific, right? There is tens of logos at any given point in time that we pick and invest into. And so the vast majority of our focus is on that growth of share of wallet with the existing customer base.
And we have seen that, as I said, in the last two years, through our focus on Teradata Everywhere and now with Vantage and the opportunity we believe is huge for us. Now these companies are telling us more and more so what they need. And by the way, we, I talked briefly about the fact that we have internally also segmented that customer base. For the first time. We have behavioral segments.
We're overlaying geographical segments, industry segments to that. And we know the kind of different requirements that customers have. And there's and but there's also some overlapping requirements that are fairly common in what we are seeing. First of all, the business leaders and analysts are more and more focused on business outcomes, and less and less on making low level technology work. In fact, if you If you can do away with technology and just focus on the business problem, that's what they really want.
They also are telling us very loud and clear that it needs to come with a winning user experience. It needs to be simple, it needs to be web based, it needs to be it needs to be the way the new cloud companies present themselves and we've made a lot of progress in that space, but a lot more work has to be done. They want easy to use platforms that just work, that scale, that take any sort of query, any sort of analytics, and simply provide the answer. Too many times they find themselves in point solutions that can either do only a subset of the analytics or only do the simple queries or only do 10 or 20 or 80 users at a time, and then they are faced with an impossible challenge saying like, okay, I cannot continue asking my questions. I first have to change the underlying platform or build yet another solution.
They just don't want that anymore, right? They also are telling us that they want much more frequent updates on analytical functionality. They don't want to wait for big releases anymore, don't want to wait for 2 years. And a lot of these things are what the cloud really has enabled in terms of a user experience, right? Ongoing new fresh software that gets updated incrementally every couple of weeks with new capabilities coming out all the time that to help them, manage their ecosystem.
And ultimately, they want an ecosystem. They want a platform that they can build applications or apps on top off. And it needs to integrate with the ecosystem that they have. And if you look at these megadata companies, these ecosystems are big. They are complex.
There's a lot of technology in there. But they won't do away with mainframes anytime soon. They won't do away with some historic systems that they operate anytime soon. And so, so there's a mix that goes from all the way of state of the art, give me cloud technology, but also integrate it with everything that I have. Implemented over the last, a couple of decades.
On the IT side, that leads to requirements like we need that seamless integration with our internal ecosystem. And again, these megadata companies have large data centers yes, they're moving some work into the cloud. And as you know, they're also moving some some work out of the cloud back into the data centers They're making decisions, right? This is no longer a switch. We're going one way or another.
They're optimizing based on the scale and the needs that they have. They want experts to help them, implement that, right? And this is where our professional services, for example, comes in as the experts to help them integrate that across this various different, technologies. They need robust enterprise security, we cannot underestimate the importance of enterprise information or security. Why am I focusing on the level enterprise is because they have a lot of point solutions that inherently every point solution says Yeah, I can do security on top of that, where they all struggle is when they take a step back and look at the larger ecosystem, they can no longer trace who touched what data in what system at a global scale.
Just to give you a perspective here, we have customers that run more than a 1,000,000,000 requests against Teradata analytics systems a month. A billion requests that they need to keep track of. Who did it? What application did it? Is there any chance that we have any exposure in the cybersecurity?
And the more bifurcated that ecosystem is, the harder that becomes for them. They also want Q and A and sandboxing virtual data labs. This is something that we have not emphasized enough as a company Teradata was the 1st company that came out with virtual Sandboxes more than a decade ago, and we have not put enough emphasis on this. And yet our customers are telling us very, very clearly, I need the ability to elastically stand up a virtual sandbox whether it's for a day or 2 weeks, make a decision if this is of any use and potentially throw it away if it was not good or move it immediately into production without having to rewrite or redo the work that I have put into this prototype. And so this capability is starting to become more and more important because governance ultimately is an important factor for these large companies.
You can only put into production data that you can trust, that you can audit, that you can go in front of a an auditor and say, you know what? Here is why we have made this decision. Here's the trace of data and here's what the model has decided. And last but not least, they're asking for more automation, automated data ingest their integration, autonomous platforming, right? I don't want to have to do it by hand.
Here's data have the system figure out what the best structure is, have the system figure out how to optimize that based on the questions that I'm asking and just make it run better every time I ask a question rather than me hiring DBAs or cis admins or have paying somebody else to optimize these platforms. So all of that is a big shift towards asset service offerings. And when we see asset service, To be very clear, as a service is not we throwing human people at it and doing services business. This is APIs are driving this. This is algorithms driving this.
This is the system driving that abstracting away the complexity just like just like other products and companies have done in your cell phones or cars, extracting away the technology, solving business outcomes. Now these megadata companies have one of everything out there, right? And this is the part where, I think we have been I think I made that point a few times already, this is not one technology that they have out there. They have literally every technology that was developed over the last decades. I remember having conversations when I was a customer about Netisa and datalegro and Ratcliffe and, you know, green plum and everything there's there's always a new technology, right?
Today, it's Snowflake, right? Yesterday there was something else. And oh, by the way, we are watching the competitive landscape very carefully. We are learning from what the competitors are doing. We are looking at what they do well, and it influences in part what we do and how we'd structure our product roadmaps.
But let's make no mistake. We are not driven by competition. We are driven by our customers and what they are telling us what they need. They like a few things that have been coming up over the years in some of these things, And you have seen Teradata integrate some of these things, but we have also put things into Teradata that none of these competitors have touched or are touching, right? Because in order to solve these complex answers, in order to deal with IoT data, 5G, you know, all of these new data elements, you need more than a data warehouse.
And yes, more and more of these companies are rebranding themselves to like, okay, now we are data warehouse company. Because whatever we did before really didn't work, but now because theoretically that has been the state of warehouse company, we are the data warehouse company. And we are now a better data warehouse company than Teradata is. And so first of all, they are not. Yes, they're solving certain problems.
They're doing certain things, but they are forgetting about 80, 90 percent of the complex things that they have to solve, and that will take them years. But our point here is we're not focused purely on our data warehouse market, and, 1 of 1 or 2 of you analysts told me or that was an industry analyst after we had Teradata analytics universe 2 months ago in Las Vegas. The analyst came was like, I heard a lot about Vantage I heard a lot about pervasive data intelligence. I don't think I heard data warehousing once at the conference. And we're like, yes, because It is a building block that everybody assumes needs to be there.
And yes, we have the best data warehousing engine on the planet. But the problem that we are solving is beyond data warehousing because data warehousing is often just the reporting engine of the enterprise. Where we are pivoting to, where we are moving to advantage is going to a higher level. And all of a sudden, like customers come to us and say, okay, can I do this without most of these technologies cannot get rid of all of this complexity? And that's the opportunity here quite honestly that we are seeing.
So again, these companies are facing unique challenges of cost and complexity. We talked about the siloed conflicting duplicate solutions. And I know I keeps talking about it. I've been talking about that when I was a customer, more than a decade ago, it was our biggest drag that we had. And yes, it is difficult, but once you get out of them, it opens up a company to do different things.
They have considerable expense locked up in maintaining that complexity, 1000 of head counts, in these largest companies they have a lack of operational analytical focus. What do I mean with that? Many of these companies have hired data scientists. And by the way, these largest companies They hire data scientists. They might want to have more data scientists, but they find data scientists.
The largest companies in the world, they have their own data science teams. But too often, they built an insight with data science, and then somebody says, great. Let's operationalize that, and then they failed to do so because they don't know how to make that Python code or that Whatever language or framework that they have written it, operationalize it, run it with SLAs, run it against 100 of millions of customers or 100 of 1,000,000 of transactions, and this is where they often struggle and fall short. And they're asking for this platform. There's a big driver of Vantage.
I have an idea of a new model that I wanna develop. I wanna train it. I wanna test it, and I wanna put it in production. In the next 30 minutes. And for most companies around the world, this is crazy talk, right?
This is like, are you kidding me? 30 minutes to have an idea, train a model and put it in production. It's more like 30 months for most companies to do that, right? They come up with great insights, and then they completely fall short of implementing that. And this is one of the key areas of Vantage.
This is really important. You will hear more today about customer examples and how this is real life experience today. They need to deploy, as we said, across the heterogeneous environment, And this is a big part of Vantage, and you will hear more from Rima and from Stephen Probes today on customer examples and what we're doing there. This is why we have opened up Vantage and why the platform is a very open platform and what we have already told our customers that in 2019 we will have native support for other file systems, object stores, cloud file systems so that now you don't need to bring the data to Vantage or into Vantage, you point Vantage at the data where you have it, right? At whatever cost level that your storage is, because you want to operationalize these things very quickly.
And there's an intensified pressure up for results. I've talked about it. This is board level topic now. This is like, how do we get more effective? How do we get more agile how do we spend less money, right?
Companies really saying I need to drop my run rate by $1,000,000,000 over the next 3 years. And I need to invest into a technology that can scale, at the same time, get rid of a lot of the point solutions that don't scale. So with Teradata Vantage, we set out to not just solve these problems but to really reset the bar for an entire industry. What you will hear about Vantage is It's bringing together an entire ecosystem and makes it operate as a single instance that you don't have to think about the individual bits and pieces and languages and processing engines behind it. It's meant to be that connective tissue within that ecosystem simplification.
To make it easy for customers to eliminate some of these data silos and bring it into a simplified ecosystem. It's ultimately here to take even more risk out of decisions of our customers. When we first introduced Teradata Everywhere, the feedback that we got initially from the customers was, tear it everywhere, that takes a certain amount of risk out of our decisions because I no longer need to know if I'm absolutely certain if I want to run-in my data center or in the cloud. Vantage takes that to an internal level, okay, now you help me de risk the analytical ecosystem, right? By not having to focus on how to make this work.
And by the way, we're doing this at massive scale and integration. That's what we are known for. And we're doing this in the cloud. We're doing this through bringing this together with the elasticity that it's expected, we've put a lot into our products and have simplified a lot. I'm going to tell you more what we have done terms of simplification and scale out of our platform.
So what is there an advantage at the highest level? And we'll go into more detail to describe this here today because that was probably the number one question I heard from some of you last night, okay, tell us more about what is Vantage, right? Vantage, first of all, integrates data sets. Across the enterprise. Sometimes I could ask, so parity date, this is it's that structured data system, right?
You have been a data warehouse, right? How can you deal now with semi structured and unstructured data? Well, it's not like semi structured and unstructured data just showed up on our doorsteps. We started working in structured semi structured and unstructured data more than a decade ago. I used to be the customer that pushed for that.
We needed to put clickstream data, call center locks into Teradata. And 10 years ago or 15 years ago, that was hard. There was a lot of work, but there was a core of that engine that scaled so well. And it turns out structured unstructured data are just different pathways. You still need the same scalable platform.
You still need the elasticity. You still need the workload management that turned it as powerful on. And so over the last decade, Teradata has built all the Hooks necessary to either ingest structured, semi structured, unstructured data or access structured, semi structured, unstructured data in other places. And we advantage the Springset together, makes it easy to do that. We've also brought functions and engines together.
You've known us from having this Aster Data brand as a separate analytics platform. And one of the first things, by the way, when I came and joined this company, I was like, doesn't make sense to have yet another system that I need to turn on just to do analytics, right? And yes, some of our customers have done that and they have copied data from A to B and back to A, right? But it needs to come together. And so we also took all the functions that we have there over the last couple of years and integrated them all into Vantage.
It's now one platform. We eliminated everything that we didn't need, from the old technology tech, but we took every single one of these analytical functions and put them either directly into the Teradata engine or into one of our co processor frameworks that we have built for Vantage. And on top of that, The other thing that we have done is, and our customers have asked us for this over the last couple of years, we also looked at tools and languages very differently. In the past, yeah, you could have any language that you want as long as it was SQL, right? That was Teradata, right?
The world is no longer just a SQL world. Although I have to say SQL also will never go away because for certain use cases, SQL is the most scalable, most optimizable language out there. But there is Python and there's R and there's various other flavors of languages. What we have built with Vantage is for the first time do we have a complete set of native language drivers into these languages? Not a, oh, I need to use Odbc in Python and then basically tell Python to do SQL to Teradata, no, no, no, no, no, you have native, drivers for Python and R and other platforms so that that data scientists or the users that are used to certain languages can talk to Vantage in their native language.
And we do the translation to whatever into whatever statements and whatever function calls in our co process of framework that need to happen. This is how we bring together this pervasive data intelligence platform, and it's so much more than just a data warehouse. Having said so, it needs good data warehousing skills. It needs good governance, metadata, master, data management, data quality, governance, lineage, Of course, that's a given, but you want to quickly point analytics on top of that. And if it works, you want to quickly roll that in production without having to rewrite or redo it.
So I've talked about this journey that we have been on to reduce risk and increase choice. It started not quite, but it started. The new territory started with the launch of Teradata Everywhere. And a lot of work went into that before that, by the way. We didn't show up 2 years ago and said, okay, we're going to do Teradata Everywhere.
Now wait 3 years until we have Teradata running in the cloud. We did that work before that, right? We showed up with a product that was ready to launch, ready to consume, and customers immediately could try that out. We provided that choice of where to deploy decoupled software from hardware. Decoupled compute from storage.
And I know there's a company running around claiming that they are the first ones to figure out that they how to separate compute and storage. It's not quite that simple. And yes, we have been on that, and Teradata Everywhere was the first step. We just launched Vantage to simplify that analytical ecosystem, build on top of Teradata Everywhere, give customers the choice, but also the simplicity to run these highly complex environments and get that environment basically out of the box, get it deployed in the cloud, run the operations in a single environment connect to existing data stores, whether that is inherent object stores or bridges into HBFS and existing Hadoop Lakes and pushed on processing that we're doing in that way, but Teradata Vantage is that thing. Now what we're doing in 2019 builds on top of that.
What a lot of customers are telling us is we love Teradata everywhere, we really get excited about Vantage. Now if I only could consume this in a consumption model, versus a capacity model that you have been traditionally selling us your technology in, right, a way that that, you know, we sized up boxes. We sized up T cores, you know, you bought a certain amount of capacity and, yeah, we gave you some elasticity in that. What if we could consume this in an NTR a different way? There are some really big announcements coming in 2019.
I can't give you all the details. But there is clearly the next step in the evolution of Teradata. It's happening and it's built on top of Vantage and what we're doing with that. So more to come for that. So with that, I want to bring it back down to what we internally call the strategy on our page.
And And the Intel page is a little bit more detailed clearly for our employees, but the first thing that we did this year as we built that strategy the next iteration of our strategy, what we did is we said we're going to put it on a single page, its strategic pillars, the key focus areas and internally, every meeting that we start at every level in the company starts with a strategy on the page. That's a first for us as a company. We haven't ever had that focus to do that. And by the way, the feedback from our people, our employees, has been phenomenal. They're like, okay, I've clarity now.
I know what's in it for me. I understand how my work feeds into this. So let me tell you a little bit more about what these strategic imperatives These are the 5 strategic pillars on top of people and culture that for today's purpose, we have taken off of that and I'll have a separate page for that to talk about that. First, relentless focus on consumption. This is we're turning the entire company to focus on ARR growth and we told you last year that 2018 would be the 1st year that we incent go to market to sell subscription.
We did that by total contract value TCV, you know, a good TCV deal, 3 year deal or whatnot would pay more than the equivalent perpetual deal. And we really convinced ourselves and our people that selling subscriptions not only possible, is absolutely the way to go. And this is why you have seen subscription percentage accelerate throughout the year this year, right? But a focus on TCV, while healthy for driving subscription percentage is not the same as a focus on ARR. And so what you will see us in 2019 is really across the board in Centee Executives, the teams that go to market fields, everyone in the company on ARR growth because that is becoming now probably the single most important metric for us to drive the adoption of Vantage.
And there's more product related announcements coming as well in terms of consumption, as I said, in 2019, this is a strategic pillar. Next strategic pillar, we call Radical simplification. First of all, there's a customer site to critical simplifications. Our customers want to consume us in easier ways, simpler in an, in an, I want to go to a web page, I want to call an API, I want to get my answers. I don't want to have to deal with anything.
That's part of it. There's a flip side. There's radical simplification of us as a company. 2 years ago, I think I talked about we had 12 hardware platforms, going down to 2, we are down to basically 1 now, right? Up until 2 years ago, every Teradata system that Teradata ever sold in the last 40 years was custom configured and custom built for one specific customer.
And if that customer decided in the end not buying it, then we took it apart, then we built a custom system for somebody else. That's the old Teradata, right? We've taken Intellislex, for example, this year to a point where we've taken away the ability to customize it and there's only 2 choices that we have and give our customers at this point anymore. When they need hardware, you can have a half rack and a full rack. And however many multiples of that that you want.
The rest is software defined. It's cloud like provisioning, even in your own data center, we treat it as if it was infrastructure that we would provision on some of the other clouds out there, right? No longer doing anything custom to that. And and we are seeing some great benefit coming out of that. There's a lot more simplification that we believe is possible in our own business model and what we are doing in terms of pricing in terms of, you know, this Mark will talk about what the financial levers are that each of these strategic pillars are actually driving.
The 3rd pillar is pivot towards as a service. And we on purpose call this as a service and not cloud with some these terms are sometimes used interchangeably. And by the way, as a service, as I said before, does not mean send professional services to do something as a service. This is meant a platform and API and interface provides, the outcomes and do that. And that also means we are shifting over the next couple of years our focus from consulting from building low level stitching together platforms because Guess what Vantage now does a big part of that, and we'll do even more so in the future to focusing on the business outcomes those solutions, those analytics that they want to run, help them run them, help them get to processes that allow them within 30 minutes to go from ideation to production rollout.
That's what we think our consulting focus needs to be going forward. Transformed go to market and brand, you have seen the next evolution of that this year with our brand launch. Right? Martin and team go to market have done a phenomenal job, to roll this out in the company, but this is nothing but a start we're not done. We haven't rebranded the company and said, okay, check mark.
No, we feel like we have started a new race for this company, and we needed a new brand because too many companies out there in the world looked at us, our website or our logo as well, same old territory, right? What they do, Claude, really. And so they wouldn't even listen to all of the things that we're doing. And we said, we need a new opportunity, and that it starts with a new brand. It also has really invigorated our employee base and the excitement that goes in the company around because of that is great.
There's more work to be done in our go to market optimization. As I said, we have segmented our megadata companies into different segments. We will fine tune go to market and consulting towards these segments because we now know how we can leverage and get more efficiency out of that, which ultimately leads me to the 5th, strategic pillar here. Deliver operational excellence. And this is something that while every company does a little bit of that, we wanted to make that a strategic call out, right?
This is about continuous improvement. This is about measuring, driving, improving everything all the time. We are rolling out a new management system within the company that focuses on key KPIs that focuses on how we do our pricing, how we do our discounting, how we run our supply chain, how we look at everything that we are doing and really put that together. And, so these are the 5 strategic pillars in the strategy. The way, the other thing that we did here is everyone on our ELT owns one of these pillars So there is ELT members named on every single one of these pillars.
And the compensation is tied to that. And these pillars are cross functional pillars, right? And so we're really operationalizing the strategy in the company, not just stopping at a nice PowerPoint slide that says this is a strategy and then we go back and do it the old way. So a lot of change a lot of progress that we have As part of the as part of the brand launch, we also redefined a little bit our mission and core values, and this speaks to that to that people culture pillar that didn't have on the last slide here, right? We transform how businesses work and people live through the power of data.
And we established 3 core values for our people that, by the way, We didn't invent them. We worked with our culture, with our people to say we what are the 3 most important values for us. And the outcome of that work over the last couple of months was we dig deep and aim high, we go all in when our customers have a problem that we need to solve. And the reception that we are getting from our employees and people is nothing but amazing in that space. And I think this is a core important enabler.
Ultimately, it's our people that make this company what it is. It's the innovation that they're driving It's the customer problems that we are solving, and it's the foundation for everything that we're doing.
We are a medical equipment manufacturer with a broad range products ranging from diagnostic images through ultrasound all the way to the left diagnostic. And the mission of the service organization, where we slide data analytics is to keep those products healthy and to make sure they're available when a customer needs them.
It's a matter of minutes. So it's important that the technology is there. It's up and running. If I have a computer tomography system in my emergency room,
I need that to be working when a patient comes in.
I think we have 240,000 customer or patient touch points every hour
What we want to really do is to focus on generating the insights out of the data. So we've linked it to solution, which takes care of that in a most automatic and scalable fashion.
Teradata has big advantage that, it really works on a global scale. We have terabytes of data in 70 countries. So in the end, it needs to scale. We want to have the right answer before our
customers have even the question includes, for example, proactive or predictive services, something is breaking in the next 10 days, we better come and fix it before it actually happens.
Our mission is really to get from a data level, to answers, to better outcomes for our customers. Anteradata Vantage can help us in that game.
Good morning. And welcome to our new headquarters in San Diego. I was right timing the Samsung team. I was going to say Sunny San Diego. But it flips a little bit, right?
So thank you for being here today. I'm Rima Poddar, and I am the an Executive Vice President for products and technology at Teradata. I joined Teradata 18 months ago. And since then, I have been working closely with the leadership team to execute on our product strategy. And I have worked across the entire company to bring together the team to deliver the first release of Vantage, which we publicly announced in October.
And I'm really excited to share some of the customer stories you will hear through the entire session today. How our customers are looking forward to leverage. In some cases, they've already, and they've seen their answers, that Vantage delivers and they're applying it to generate net new revenue stream for them and driving their business outcome. Let me take this opportunity to emphasize that Rick and Oliver shared with you today. We have been listening closely to the customers.
As Vic mentioned, we started the Teradata Everywhere strategy 2 years back. Oliver mentioned how we have been learning through those experiences, sharing those and investing those learnings back into our product portfolio. You know, you heard the word megadata companies, Oliver was talking about it. They are the most demanding customers, and they are the most demanding users of data. And they use data as a secret weapon to do business.
And as we are talking to the C suite customers, what we are really hearing, time and again is a consistent message across the board. They're saying we want to de risk our investment. We want to eliminate cost. We want to apply our resources to the most valuable business outcome we want simple, simplistic way of integrating. We want to avoid complexity.
And above all, we want to have the flexibility, the choice of deployment. We want to also get the choice of where should the data live? Which application should move? To the cloud, to the on premises. So you get that theme across what they're really looking for.
It's a hybrid solution. And Teradata is the hybrid cloud analytics software provider who uses that 100% of the data across the organization, the enterprise to drive business outcome for them. And we enable companies to rise above all these complexities cost and inadequacies of the current analytic environment and landscape. That's what we are. And as Oliver mentioned, the conversations have changed.
We talk to the influencers, the business influencers who really want to drive business outcome. We focus on our customer success, which in turn drives our success. Our growth So today, I'm going to talk about Teradata Vantage. You heard Oliver talk about it. So we heard a lot of questions yesterday from many of you.
So what is teradata Vantage? Why does new in it? It's a single platform that really brings about simplicity that brings all the tools, the datasets, the languages, the advanced machine learning functions, all in one platform. Allowing us to really address the differentiating part is address net new advanced analytics use cases. Not just descriptive, predictive and prescriptive analytics, which will allow you not to look at the answers, the analytics that delivers But in turn, gives you recommended course of action to drive net new value for your business for our customers.
Which in turn drives consumption of Astra data, which powers our ARR growth. So why is it powerful and why is it defensible in the market? Vantage is built on top of the gold standard. Oliver was talking about data warehouse, we need the crown jewels. We are the powerful software core that we have that can scale, that can perform, that can address the high intense workload that the enterprise is looking for that delivers the critical workload and the answers to all that they're looking for.
That is the differentiating part. And by the way, it takes years years to build a powerful and advanced analytics platform. We built Vantage on our superior core That's already there. For our competition, it's going to take a long, long time to get to where teradata is here now. Teradata Vantage is the enterprise platform That sets the new standard pervasive data intelligence.
That powers that. It's not about bringing data into Teradata to do and solve your problem. It's about how do you help solve complexity and digitization, sorry, It provides integrated datasets, multiple datasets. So it gives you the answer all your data the way you need it. It provides those analytical functions and engines that is needed to analyze that data.
So addressing The data that you can see across the organization, not just departmental, see your data across your entire organization. It provides the tools and languages so that you can power your smart people the citizen data scientists, the business analysts who finally have to use that data they have to build, test and deploy to deliver those answer giving analytics. That is going to give you those answer for your prescriptive looking at your business, looking at that net new gains that you can drive. Which you can otherwise cannot all in a simple usable manner in one single platform. Teradata is a trusted brand with 40 years of experience innovation, investment.
We haven't built Vantage from scratch. We have leveraged our existing superior course that is set as the gold standard in the industry. Its high performance scalable software. And it can work on the most complex queries that our competitions cannot even handle. It can work on the critical workloads That is mission critical for some of the businesses.
Think about Aviation Industry. Think about Healthcare Industry. Those are mission critical workloads. They run that. They have to produce perform and give that answer in fast manner.
And trusted answer. That's what a data vantage does. So you heard weak talk about your data everywhere. A key differentiating component to our foundation as that, Teradata Everywhere, which is highly valued by our C suite customers. Wick mentioned about Chief Digital Officer, the CIOs, all of them are looking at derisking their investment.
To find values to reduce their complexity, to simplify and deliver those answers to their business. Powering their employees, you saw the stats from Oliver. How employees cannot even view data across. They are not powered by those simple solutions they can leverage to draw insights. And deliver those answers their business users want.
The CIOs are posed with questions which cloud provider do I use? When should I move? What about all those applications? Can I leave some of them on prem, some of them in the cloud? And we see that hybrid cloud is going to be there in the foreseeable future Teadata dearest this decision because we can deploy our software anywhere, anytime.
We have given the application portability with no code change. And above all, we can deploy the same software in Amazon web services in our own private data cloud, in Azure on prem. And above all, Teradata Vantage allows that flexibility to our customers to move any time with the pricing not skyrocketing like Snowflake based on the usage. So we continue to invest heavily in that core platform and we do it because we want to make it remain the best in class in the industry. And that delivers the descriptive analytics.
We have extended on top of that. The analytic data types, the languages that allows us to develop predictive analytics. Such as in customer journey, fraud analytics, predictive asset maintenance Remember the critical workload we were talking about? It's not just about that. You have to draw insights.
Give predictive modeling. And ultimately prescriptive analytics and the sentient enterprise. In which the analytical answers provides the recommended cause of action. That is what we are aiming at with the best in class artificial intelligence, deliver with near real time answers. So you would say what is unique again, advantage?
And let me take you take you through a storyline here. What happens if the analytics is not delivering answers for your business? Is that good? I would say not at all. And do you know why?
The reason is vast majority of the analytic outcomes that are generated from data science projects never even make it to production. And the reason is most of the customers do not have or they lack a repeatable process that allows you to take the entire life cycle of analytic workloads? Starting from ingestion, pulling data, analyzing it, loading it. So we have a customer who's one of the world's largest bank customer. And what they had a problem they had imposed.
And they said, we want to collect data from all our channels and we want to look at how we 6 months collecting data from various storages, data storages using different technical tools, techniques, You see the overhead. You need to have resources with specialized skills. You need to have technology that you have to learn, you cannot use the same resources across the board. And again, this is all the problem of data silos. This spend 6 months just to collect.
And that's just collection of data. This goes back to the point of 80% of time is used by data scientists just trying to gather data from disparate data sources. Now they spent few weeks again to analyze the data and then draw insights. Teadata Vantage, you can do that. You can bring that downtime from 6 months to just few weeks.
And to drive that answer from the analytics few weeks to few minutes. Annuals here, those stories throughout the course of this session. That is the simplification. So it Teradata Vantage provides that simple, unified analytic workflow cycle, not just once, but in a repeatable manner. That's the process we deliver.
We recognize that teradata is always part of the customer's broader ecosystem. We are going to be the 1st class citizen. You heard Oliver talk about how simplification, the approach that we have to take for our customers not only is applicable for us. You saw our strategic imperatives. How do you make this complex problem simple?
And that's how Vantage does it. Vantage develops and has the APIs that is applied to open standards so that we can seamlessly integrate into our customer's ecosystem and also our partners can integrate into our ecosystem. That's the power advantage, providing those APIs that adhere to open standards. Vantage can help simplify this complex ecosystem by delivering not just the APIs, but reducing cost derisking. That effort you're going to apply.
And then it also minimizes the data movement that every other competition is trying to do right now, building silo data warehouse. We don't. We are going to take analytics to the data where it lies. We don't have to pull data into teledata. So what you are seeing here is a simplified ecosystem the simplified platform that helps you to look at all these advanced analytics in one go.
Okay. So let's take a look at our competition. In our off late you've been hearing, you might have seen some little bit of a heat from our cloud only competitors. Companies like snowflakes, Snowflake, and Redshift. They have limited number of concurrent users.
So think about it for a minute. If you have to serve very large enterprise megadata companies, whose users or whose community is thousands of users. Look at that limitation that they have. Okay. Can they do it?
Yes, of course. But they can duplicate their virtual data warehouse, but to a limitation. 2nd, their ability to handle complex workload They have rudimentary workload management and that too with no tuning. So think about it. Again, if you have to serve enterprise level companies that complex workload That's a huge limitation right there.
Tuning is needed, especially for critical workloads. The 3rd, if you have to view the same data from one data warehouse to the next, you would have to duplicate the data again and again to see the same data across those datasets or the data warehouse. And especially when it comes to analytics, we're talking about analytics. One analytics that is built here Another one is built on the second one, and that goes on, right? There's no knowledge sharing, no insight sharing that's happening.
This also is a cause of introducing data silos, data drift, data governance and all problem that we are all faced with, they are really introducing complexity into an already existing complex ecosystem. We call that as the data waste land problem. So they are contributing to that data waste land problem. So the question is if you have companies like us, Teradata, who have all these capabilities we address profoundly? Why would you settle for a feather weight champion when you have a heavyweight champion with you.
So let's look at Teradata. Vantage, we don't have to scale, duplicate. With one instance of Vantage, we can save thousands of concurrent users at any point. We have proven technology, and we have testimony, we have customers that uses, we have proven to be the company with that software that can handle complex workload management. And above all, we can access data anywhere it sits.
We don't have to load data into teradata vantage. All these attributes are needed to really support and make an enterprise company successful. And that's what Teradata Vantage had. You heard me talk, but just don't take my words for it. Gartner says we push the boundaries of innovation.
Radient Advisors say we reduce the complexity of analytics. Data Nami, proclaims, Teradata Advantage is going to be the center for our customers' analytic strategies. In summary, Vantage is a single platform that brings all the advanced analytic use cases to answer to deliver those business outcomes that our customers are looking for. And it's powerful because we did not build Vantage from scratch. We are building on top of our existing gold standard innovation and services that we have built over decades.
And it takes years and years for anyone to build large scale enterprise level analytics platform. Thank you very much.
Data and analytics is an integral part. Everything that we do with our customers all have digital interactions. And so informing, the customers engaging with them is predominantly done on digital platforms. Pervasive data intelligence to me is not just the collection of data from every touchpoint that people have, but actually being able to leverage that data and solve both business outcomes and solve business problems. 1 of the next frontiers in sports analytics is really on analyzing player health.
If we look specifically at our team last year, when we had Rudy Gobert court, we played as a 59 win team. When he was injured, the stats indicated that we were a 42 win team. Which is the difference between being the number 1 or number 2 seed or maybe even not making the playoffs. And so it has huge impact. And so the next frontier is how do we reduce those injuries?
How do we find ways to help the players have better health, have better sleep, have better dietary habits and how when we identify a minor issue, do we keep it from becoming an ongoing longer issue for the players? There is a direct correlation between whether the team wins or loses and the amount that customers band, both in the team store and on concessions. And also, if we monitor our customer satisfaction scores, there is a significant difference between a win and a loss. Suddenly, our parking is less of an issue if we win the game.
My name is Steven Brooks. I'm the Chief Technology Officer for Teradata. As CTO, I take kind of a different role than some Silicon Valley CTO's a lot of their time just in the labs. My goal is CTO is to spend 50% of my time with customers. I want to take what I hear from customers, from prospects, from industry visionaries and translate that to what does it mean for Tyrtea's technology strategy and how do we deploy products and services out to the field?
And what I wanna do is share with you some customer experiences and what advantage means from a customer perspective? What is this transformation in Teradata's technology strategy, in Teradata's software analytics platform, what does that mean to customers? If we look at analytics and we break it down into 3 very simple phases, right? The space of data warehousing largely has traditionally focused on descriptive analytics. Understanding sort of what's happening in the business, doing reporting, being able to drill down, and largely SQL service that requirement as generated by a number of the BI tools out there in the market place data visualization tools like Tableau and Clic or Power BI or Cognos OBIE, lots of different tools out there.
MicroStrategy, it's a long list of tools all working very well with Theradata focused on descriptive analytics. But I will tell you that as we move more into predictive analytics, not just what happened in the past, not just developing the strategic intelligence for the enterprise, but being able to predict what's going to happen next. Being able to prescribe the actions that we need to take in order to be successful as an enterprise We need to go beyond SQL. SQL is not enough. SQL is a great powerful language, as Oliver mentioned, in the opening, but it's not enough.
So in Silicon Valley where I'm originally from, and these big wars between, I'll call them, the SQL bigots and the nosql bigots, right? And the nosql bigots say, ah, you know, you SQL people This is very interesting technology, but this is old technology doesn't solve all my problems. Go sit over there by the cobalt programmers. Your life is over. You are now legacy, right?
And by the way, we agree with some of those observations that SQL is not good enough. Just to be very clear. But in Silicon Valley, there's no shortage of SQL Digots. Oracle comes from Silicon Valley Informis came from Silicon Valley, Cybase came from Silicon Valley. DV2 and system r came from Silicon Valley, arguably the most important open source databases, ingress, post Chris family came from Silicon Valley, sequel bigots to say, you know, you hadoop people, you're a bunch of idiots.
You're doing flat file programming. You've reinvented VSAM. Yes. Okay. You've made it parallel.
That's interesting. That's good. And you have no optimizer, you have no schema, you have no fine grain security, you have no workload management, And so this became this very religious war. And at the extreme, in a religious war, both sides are stupid. Right?
The reality is, yes, the things that the SQL Biggets complained about are largely true, but that doesn't mean that no SQL doesn't have value. Right? And by the way, as Oliver said, SQL is not going away anytime soon because it's very powerful, but you can't stand still. You have to evolve. And so in Teradata, we began this investment, which we refer to internally, which I refer to as new SQL it's not no sequel.
It's not sequel. It's no sequel. New sequel is taking sequel beyond its sort of traditional boundaries beyond the constraints of relational algebra beyond some of the sort of ANSI standard constraints and so on. To deliver more advanced capabilities, to deliver things like time series analytics, to deliver the ability to handle semi structure data types like the web log data all of her talked about earlier. The ability to do geospatial analytics, the ability to do in database R and pipe on and other sort of non SQL languages to deliver the advanced analytics.
So this vantage journey, of course, vantage, we sort of came out to marketplace this year with big branding and so on. But the reality, this is not a journey that started this year. This is a journey that started years ago implementing these new SQL capabilities. And as we brought more and more capabilities into
the engine,
what you would call the Teradata Engine, You'll actually stop hearing us talk about the Teradata Engine because as Rima said, this is we just assume that that's there. Right? We assume you need this foundation of great data management and all these new SQL capabilities. And yes, I get asked all the time about these database players like, you know, vertica or Snowflake or Redshift or whatever, these guys are competing in the old SQL domain for the most part. And they're still trying to do catch up on workload management and optimizer technology and a bunch of other stuff.
We just, for us, that's for granted. Yes, we of course, we will continue to do incremental improvement on those things. But our core focus is on how do we go beyond SQL for this analytics platform capability. And as we introduce more and more things into the database, which is great, We also recognize the need for engines that aren't necessarily going to be put inside the database, but actually sit as peers in this analytics platform. When we acquired Astor from the Stanford University spin off company some years ago, Right?
Astra was a separate appliance with its own copy of the data and so on. Had some very interesting stuff they owned, and now we own patents related to how do you integrate mapreduce and SQL? Mapreduce is one of the fundamental sort of programming paradigms that was introduced by Hadoop into the marketplace. But bringing that capability into the machine learning engine. And then creating that engine within this Vantage platform, this analytics platform, so that we can actually share the data rather than duplicating the data.
And that data doesn't necessarily have to be in a teradata file system per se. It might be in an three file system. It might be in an Azure blob storage infrastructure. Through query grid, we might be getting some of our data from Hadoop. Or other no sequel technologies.
Make sure that we can get the data from the right place to get the data And when you need the optimal performance, yes, for the structured and semi structured data, you're absolutely going to use the teradata hash based file system because no one can beat that performance. But there are some cases where you might want to make trade offs related to cost and performance in store on, for example, S3, you're less concerned about performance, but you want to optimize costs or some of the historical data or maybe staging data into data lake and so on, we have the ability in a transparent way to access that data without duplicating the data. And with this cross engine analytic orchestration that we do in the Vantage platform, we provide the orchestration. We make sure the data gets to the right engine. Through our in memory analytics table, technology, to the ability to have these machines as peers so we can do things like machine learning and graph engine capability.
And and this is an extensible platform. That platform can include engines that we build, but by the way, it's specifically designed so that we can plug in engines from the open source community like sparks machine learning library or the, or tensorflow or engines that have not yet even been invented yet. Or engines that our customers want to build or their favorite systems integrators, or commercial platforms, maybe from the SAS Institute or Microsoft or or others. So Para Data becomes this harness for scaling out the analytics to handle these mega large opportunities, large, not just in the size of the data, but large in the vision and the sophistication, the complexity of the workload that they are working applications platform, the analytics capability is not the graphical user interface. That is not our core competence.
We are not going to compete with the Tableos and the clicks and the microstrategies and those kinds of guys, right? We build the connectors so they can integrate in you can use open source leaders like Jupyter, for example, or maybe you want to use Nime or Rstudio and so on the data scientist gets to use the languages of their choice and the tools of their choice. We're not dictating a data science workbench, but rather connecting to the sort of industry leading capabilities within the organization. So this Vantage platform is a critical evolution of the Teradata Technology. From a database technology, which is where a lot of the guys are still competing out.
And yes, they have their silver bullets. They have the calmer silver bullet or the in memory silver bullet or the cloud native silver bullet. Silver bullets are never long lasting. They solve a particular problem. And by the way, we have cloud, we have columnar, we have in memory.
These are not, these are not things that's, you know, the Sol problems by themselves, but rather part of a larger ecosystem. That's what we at Teradata do. So let me share with you some of the the feedback that I consistently hear from our customers in the field. Teradata Everywhere strategy absolutely love it because it allows the customers to deploy without risk today and without risk tomorrow. I can deploy in AWS, if that's the right answer today, And 16 months from now, if Microsoft makes me a deal that I can't refuse and Microsoft off as mature to the point where I think it's gonna handle my workload better than AWS at a better price performance.
I can take my Teradata licenses and I can move them over to AWS. And by the way, the licenses is just part of the story. It's the functionality. I can pick up the Teradata capability. They and the vantage analytic bill they can pick it up and move it, no line of code will change in that customer's analytic ecosystem that relates to Teradata Vantage.
I can't speak for other tools they may use in their environment, but from a Teradata perspective, their investment is protected. And that gives them the confidence to make investments today knowing that those investments are still going to be good tomorrow when tomorrow the right answer may be different. I can make investments today for on premises to because that's where my data gravity is today for these big players, knowing that I can move into the cloud when I'm ready. And maybe by the way, I will decide to do a private cloud deployment on premises with the stacks that now Amazon and Microsoft are coming to marketplace with. And Teradata's ability with a single code base, So again, this isn't, you know, where you have the behavior, you know, on premises is different than behavior in the cloud because there's a different code base.
No. Single code base optimized at lower levels to understand the differences between a bare metal deployment versus a VMware deployment versus an Azureable deployment versus an AWS deployment, yes, we certainly do that level of optimization because the customer shouldn't have to worry about it. But the functionality delivered completely portable, completely protected single code base, in the Teradata software. The reality is most of our customers today and going into the near future are going to be hybrid cloud and on premises. They'll do their data science work that requires very high agility where they're less concerned about cost where they're very often using data that has been masked and, and, therefore, there's no turn about sort of security in the cloud and so on, which by the way is mainly FUD because I think the cloud is actually more secure than most data centers.
Of large enterprises, but put aside the FUD, they have the confidence that they can do that work in the cloud with high agility access to lots of tools that make sense for data science to do experimentation with. And they can bring it on premises for the productionization where you'd want to manage for cost and service levels a different set of criteria. The reality is most customers today have hybrid cloud strategies. They're a mix of on premises and in cloud and those capabilities are both important, for Teradata's technology strategy. Now from a Vantage platform point of view, the ability to leverage the best in capabilities for open source and commercial working together, this is a key critical success factor.
Right?
It's not an either or. It's the ability to take the best practices to bake the best software, to take best of breed in the industry where we're focused on what is the total time to value and what is the total cost to value Some of our competitors like to talk about what is the price per terabyte of storing data? It's not that important storing data and doing nothing with it is not interesting. I wanna know what is the cost for answers. What is the cost for value?
What is the cost for outcome? That's where the rubber hits the road, right? And so the ability to sort of have a the efficiency for the lowest cost per query of your complex queries for a high concurrency, for the workflow of management, this is something that is highly valued by our customers. But it's not just a SQL database. Again, it's an analytics platform that goes beyond SQL by leaps and bounds.
And this space especially in machine learning and deep learning, there's going to continue to be very rapid evolution in this space. We believe I believe over the next 5 to 8 years, there will be a new answer roughly every 2 years. Right? Some time ago, SAS was arguably the right answer for advanced analytics. And then R became the right answer.
And then Spark became the right answer. And Cafe became the right answer. And right now Google Pinterflow is the hot item. 2 years from now, it'll be something different. And 4 years from now, it's hard to even predict what that will be, but that will be yet again something different.
The Vantage architecture by using containerization technology, by using a services based approach with APIs, as Oliver mentioned earlier, allows us to expand with additional engines which we may build or the open source community may build or our commercial software partners may build. And we can plug them in without disrupting the ecosystem, protecting the investment, allowing data scientists to do experimentation in their sandboxes and their data labs and so on. And then create that bridge that allows organization without destabilizing the environment. So if a data scientist takes some open source piece of software and invent something great, and then hands it over to IT and says, please put that in production. IT said, I don't want any part of that, right?
It's a big problem, as Rima mentioned, there's a there's a there's a lot of great science data science work that never goes into production. And we need to provide that bridge to bring it in production, bring it in production with workload management, with high availability with efficient access to data, without duplicating the data for every single engine, Vantage separates the compute From the storage, we can add engines independent of the data. We can share that data. We're not duplicating the data. For every single engine.
We do the orchestration for that. So minimizing the duplication or data, minimizing the movement of data and building that bridge between the innovation part of the organization with the data scientists and the monetize it part with IT that's going to put things into production. If we look at the use cases, that have been most popular in this first release of Vantage fall on roughly 6 categories. I want to be able to predict the future. I want to take historical data and use that to predict the future.
Largely with what's called supervised learning or training sets using a wide variety of algorithms that are provided by the machine learning library with INVantage. Segmentation unsupervised learning clustering using other techniques to understand groups of customers that are behaving together so you can do micro targeting to those segmentations and then understanding causality. Right? What is the path to churn and how did we get there? We can predict using capabilities within Vantage and a medical pathway, who's going to end up in back surgery and who's not and which of those back surgeries might have been unnecessary.
And what is the path we can take them on in order to eliminate the unnecessary back surgery, save money and save the health of that patient. Context sentiment analysis, doing text based analytics, doing sentiment analysis to understand how the customers feel about our products, our services, and so on. Network analysis, social network analysis, calling circles, understanding relationships, understanding the path of money and money laundering schemes. There are lots of interesting uses of graph analytics within our customer base. Data science is a lot about having a good idea, having hypothesis and then testing it.
Data science is data R and D I've got an idea I need to test it and it needs to be fast and cheap to fail because each failure is a learning the ability to spin up a data lab very quickly, to deploy the Vantage capabilities, do the hypothesis testing And it's okay to fail as long as we're learning and we're doing it fast and cheap, and then we go into the next and the next, and then we find those those nuggets of gold. These are the 6 main use cases that we see in this first release of Avantage. Let me give you a few more specific examples. So this first example is a major manufacturer that you all know they make equipment, which is quite complex equipment, multiple sub assemblies, and they need to detect when some part thing. Having a dashboard go red to say your machine is broken, yeah, we know that because it's not working.
We need to predict that this is gonna happen, that the part failure is gonna happen before it happens, not after it happens. This is not a dashboard, which is describing what happened in the last two minutes, it's what's going to happen in the next 8 hours. So we take data from sensors, this is IOT data, internet of things, so that things are the the sub assemblies and the parts and measuring things like vibration and temperature and other factors that influence our ability to predict whether our part is going to fail. In our machine learning library provide lots of tools for getting the data, parsing the data, organizing it, feeding it into the predictive models. And then we can identify what are the specific factors that are likely to predict that something's going to fail before it fails and allow us to prescribe what actions should we take in order to remediate the problem before the equipment is broken.
So the answer is a set of triggers can predict that the performance of this equipment is going to degrade. Oftentimes means fail, but it also might be degrade in performance and the quality of what's what's happening with the equipment, taking the data on a continuous near real time basis and generating those answers for decision makers. And by the way, decision makers in many cases are software processes, not necessarily human processes. Right? So we can intervene in an automated way in order to get high quality operation of this equipment.
The next example is a retail banking example large global bank, they want to be able to detect when an account is at risk of closure And what are the interventions that we can do in order to prevent that closure? So we take interactions across multiple channels across their branches, across their call centers, their their mobile apps, their internet banking, across all these channels. So taking detailed data into an integrated repository and then sessionizing it according to what is the purpose of the interaction? So if I'm, if I have a bunch of interactions related to something to do with my credit card, will sessionize those separately from the interactions related to my my mortgage, but of course, we also look at the the interaction between those sessions and how it impacts customer loyalty and customer affinity towards potentially closing an account. We're able to detect patterns that indicate risk of defection and then prescribe interventions take them on a different path, right?
The path to keeping the account open and growing the business rather than the path to closure And that has significantly impacted their ability to manage churn within their customer base. This example is a multinational leader in the digital economy and they are focused on using business intelligence as an offensive weapon to increase their market share, to increase customer delight as measured by Net Promoter Score, They focus a lot on user experience. How can we remove friction from the buying process and from the using their their digital platform? We want to be able to increase market share, particularly where we're underrepresented in certain product categories, upsell things like fulfillment services, etcetera. This customer uses a hybrid cloud environment.
They use Amazon's S3 as their data lake infrastructure, they use Teradata Vantage for doing the heavy lifting on the analytics and the prediction and so on, with Intelicloud, and they have been significantly growing their business. And as they grow their business, they grow the use of Vantage. So they've recently done an upgrade in their Teradata system, and they're driving about a 30% year over year growth in Vantage. And with the business of theirs growing our business grows very naturally. They are running many millions of queries not a month every day.
1,000,000 of queries every day, many millions of queries every day. No chance to do this with the sort of low and old SQL database wannabes that are still struggling with basic concurrency and optimizer and workload management, no chance. Believe me, they've tried They've done every every one of our customers, you know, it's good for us. They they benchmark against us. They try.
They look to see what does it really what does it really do? Right? Marketing planes, power point is very easy. What does it really do when the rubber hits the road? There are lots of examples.
We could take the whole day talking about examples One of the key themes that you're going to see is the ability to handle at scale the complexity and the concurrency of handling the workloads. Right? And we're not talking about a 20% gain or a 10% gain. We're talking about multiple factors or as a magnitude. I'll take one of the examples up here.
This, multinational, this this retailer, multichannel retailer in North America 1000 of stores, right, plus an online presence. One of the issues that they had is there was a category of merchandise, which is highly, highly seasonal. So the timeframe that you have to sell this merchandise is measured in days, not weeks and not months. So if all these sophisticated models to predict, how much inventory she would have on each store shelf, by store, by individual SKU stock keeping unit, right? Very complex models.
They look at all kinds, they look at historical data, they look at whether they look at all kinds of things and they get the right inventory to the store shelf. But you know what? When that merchandise hits the shelf on Saturday, your best indicator for how much you're going to sell over the next 7 days and what did you do on Saturday? And so they get the sales data and their model before they deployed the Vantage capability, their model was taking more than 60 hours Remember, this is a lot of SKUs and a lot of thousands of stores. And each store is, you know, individually, calculated what their inventory they need by SKU over 60 hours to do that.
Now when you've got a 7 day window on seasonal dice and you wanna take the Saturday sales and then predict what we need to do in the stores, rebalancing, shipping, you know, from the distribution house into the the stores. 60 hours is no go, right? That just doesn't work. So we were able to take this down to just over an hour, which meant that they could do multiple iterations and they could significantly decrease lost sales increase the, the accuracy of their inventory position. So they didn't have excess inventory because by the way, if you still have inventory on the shelf, after the season is done, this is not good.
This is inventory you're gonna throw away or basically sell at some radically reduced price. It's basically garbage. Right? So the ability to do this, to turn this around, this kind of analytics, they could not do it with the other technologies. They cannot do it with the other technologies.
And this is bottom line growth for them in their sales and their sort of reduction in inventory cost that translates directly to moving this processing into Vantage, driving consumption growth that helps them, but helps us too. That's what we want. So here are the key takeaways that I want for you coming out of this session. Teradata is not a stack of mediocrity, where you say buy everything from me. Because when someone says buy everything from me, no one can be the best at everything.
Teradata, we know what we're good at. We deliver that capability with vigor, and we integrate with Vester replayers and other pieces of the stack right? So we're integrating with the Tableos and the Alteryx and the microstrategies and the Jupyter notebook and the tensor flows and so on, whatever the best of breed is for that customer and different customers will have different choices, that's fine, right? Best of breed of open source and commercial technologies into a best of breed stack. We bridge from the data scientists into the monetization of the data science to the productionization to the ability to manage the best of breed tools that they want to use, their languages, their tools, and then translate that into production deployment which is where the value comes Teradata is not just a database anymore.
You won't hear us talking about the Teradata database anymore. We talk about the analytics platform. Fantage as an analytics platform. The database is one of the moving parts, absolutely. But think about that just for a second.
Tara Data has evolved from a database platform to an analytics platform. This is absolutely key. So with this, it's my pleasure to introduce
transform businesses, transform people's lives, At parity then, that's our purpose on this planet.
When we say our mission is to transform how businesses work, and people live. How does that translate to your work and your everyday life?
But I also ask you to think of charity in a new way. You used to know Teradata as the leader in data warehousing. A theory that has become a company that delivers pervasive data intelligence. Provasive data intelligence is the new how, a new standard that we have set for an entire industry. This is the new charity, though, that is all around you.
We did the hard work. We executed on that strategy. You will see new products, a new look and feel. Every day I talk to executives around the world, and they tell me how they are struggling to integrate their analytical solutions, their data, and how it is impossible for them to get mission critical answers at scale. A recent survey that we have done of 200, 60 worldwide executives told us 75% of them of them think analytics are too complicated for them to implement to act on to improve.
70 9 percent of their employees don't have the data that they need to do their job.
There is no silver bullet. You can't do this stuff in 3 weeks. You have to have a partner that is there for you that has been through it before is committed to you and we'll make sure that you are successful. We are real partners. We value our customers.
We value our people in our company who make it happen. And success is the greatest thing that can happen and we know that if we make our customers successful, that Teradata will be successful. We're not arrogant, but we're confident.
And we're driving into this new era, the era of intelligence, And to help with that, I'm very excited to announce on behalf of all of Teradata, the availability of Teradata Vantage, and Teradata Vantage is the enterprise platform for delivering pervasive data intelligence. To really help solve the problems With Teradata Vantage, you really get 3 things. The first thing is you get all of your preferred tools and languages. Your tools, your way. The second thing is you get the best analytic functions and engines at scale.
With Teradata Advantage, you can see things that other systems cannot. And the third thing that you get is support for multiple datasets and it integrates everything. All of your data, any way that you need it.
We were lucky to have the 1st Teradata Vantage installation in the world.
There are over 110,000,000 serious enabled vehicles on the road right now, and that is projected to grow to over $175,000,000 over the next several years, with 75% of new vehicles coming with our service and a free trial. That all translates to a lot of opportunity. And we intend to capitalize on it. And with data and analytics powered by Teradata, we are positioned for the future. Teradata Vantage provides one common data strategy.
It serves as the repository for our data. The data is cleanse, It's modeled, and it's available to be served up to the departments to operate their business. Teradata has reduced our costs and complexity?
I've done this for a long time. I really haven't seen these results ever. And that's really what excited me and what would meet the most. Is just showing the power of the speed of the platform of making it happen with organization with this technology will just make us, very agile, very responsive we want to be best in serving our customers as well as we are serving as our network quality is So by utilizing Theradata Vantage, this is now really within reach And that is why I'm here to share this amazing success story.
Philip, with the help of Teradata, and leveraging real time data and real time diagnostic analytics are able to more effectively diagnose problems
and send the doctors to the more critical situations.
They are integrating health care data from different places and using machine learning to identify abnormalities, and they're doing it really fast.
I wanna talk about is Qantas, Australian airline. Their budget for fuel alone is $3,200,000,000 a year, a 1% improvement is $32,000,000, 2% 64,000,000, you get the idea. But they need to do this at scale. They operate more than 90,000 flights a year. And every single one of these flights, creates 2,000,000 data points per hour.
They need to combine flight data, operational data. Weather data, delays, airport data. And with Teradata, they can. With Teradata, they have improved the fuel efficiency of their fleet by an additional 1.5%.
When we brought in these more advanced algorithms into Danske Bank, We increased the rate at which we caught the fraud. We detected a fraud by more than 50% while simultaneously, reducing the number of false positives. We're catching more fraud, and we're reducing the number of people that we annoy by reducing the number of false positives. This is the power of these advanced algorithms.
And the fact is health care companies around the globe is using teradata to harness the power of data and deliver answers and rise above all these complexities at scale. So if they are able to do it, no matter which industry you are part of, you can too.
It's not good enough to just be in commercial software only. There's a lot of great commercial software out there. But there's also a lot of great open source software out there. And you want to be able to bring those capabilities into your Vantage environment. So Vantage is not just about things that Teradata builds or Teradata partners build.
It's also about bringing the open source community IP into the analytic environment. And this list is changing all the time. This phase is moving very, very quickly. And if you plant your foot too hard onto one particular tool or algorithm, you will be wrong in 2 or 3 years.
Our platform is highly distributed. You all know this. So we are obviously taking advantage of that. Our customers at the world's most demanding workloads. We know it.
We always knew this. The same applies when you start playing with AI. What's special about our customers is that the datasets are large, the number of models are large, the complexities high. One customer we are talking to has 1,500,000 models that they want to run-in production every day. There's another customer, this 400 data scientists, and they will all create delete, update, modify their models, ad hoc, anytime.
Our customers are used to running 100 or 1000 of queries simultaneously, seamlessly. It's all scheduled for them. Now when they run machine learning models, Why should it be different?
The key commonality in all of these is getting the right answers from analytics at scale. It takes pervasive data intelligence. With it, Teradata is touching 100 of millions of people's lives, and has the potential to touch 1,000,000,000 of life. Teradata can handle the scale and complexity every single day.
What data should I be looking at? What's the data that really matters? What's the data that I can use to predict the outcomes that I'm interested in? This is the promise for Vantage. Our goal is to help you help your decision makers transform that data into answers that drive outcomes in your business.
This that's a lot to take. I know. So actually, this all about just one thing. This is about one platform that we are giving you, the Teradata Vantage. I've seen it behind the scenes.
So trust me, when you try it, it will totally change your universe.
At Teradata, our mission is to transform how businesses work and people live through the power of data. Think about that for a moment. Transform businesses transform people's lives, carry them. That's our purpose on this planet.
When we say our mission is to transform how businesses work and people live, how does that translate to your work and your everyday life.
But I also ask you to think of charity in a new way. You used to know Teradata as the leader in data warehousing. A Teradata has become a company that delivers pervasive data intelligence. Pervasive data intelligence is the new how, a new standard that we have set for an entire industry. This is the new territory, though, that is all around you.
We did the hard work. We executed on that strategy. You would see new products and new look and feel Every day I talk to executives around the world. And they tell me how they are struggling to integrate their analytical solutions, their data, and how it is impossible for them to get mission critical answers at scale. A recent survey that we have done of 2 160 worldwide executives told us 75% of them of them think analytics are too complicated for them to implement, to act on, to improve.
79% of their employees don't have the data that they need to do their job.
There is no silver bullet. You can't do this stuff in 3 weeks. You have to have a partner that isn't there for you. That has been through it before is committed to you and will make sure that you are successful. We are real partners.
We value our customers. We value our people in our company who make it happen. And success is the greatest thing that can happen, and we know that if we make our customers successful, that Teradata will be successful. We're not arrogant, but we're confident.
And we're driving into this new era the era of intelligence. And to help with that, I'm very excited to announce on behalf of all of Teradata, the availability of Teradata Vantage, and Teradata Vantage is the enterprise platform for delivering pervasive data intelligence to really help solve the problems of complexity
of our world and
digitization. With Teradata Advantage, you really get 3 things. The first thing is you get all of your preferred tools and languages your tools, your way. The second thing is you get the best analytic functions and engines at scale. Teradata Advantage, you can see things that other systems cannot.
And the third thing that you get is support for multiple datasets and it integrates everything. All of your data, any way that you need it.
We're lucky to have the 1st Teradata Vantage installation in the world.
There are over 110,000,000 Series XM enabled vehicles on the road right now, and that is projected to grow to over 175,000,000 over the next several years with 75 percent of new vehicles coming with our service and a free trial. That all translates to a lot of opportunity, and we intend to capitalize on it. And with data and analytics powered by Teradata, we are positioned for the future. Teradata Advantage provides one common data strategy. It serves as the repository for our data, the data is cleansed, It's modeled, and it's available to be served up to the departments to operate their business.
Teradata has reduced our cost and complexity.
I've done this for a long time. I really haven't seen this result ever. And that's really what excited me and what would meet the most. Is just showing the power of the speed of the platform of making it happen with organization with this technology will just make us, very agile, very responsive We want to be best in serving our customers as well as we are serving as our network quality is So by utilizing Teradata Vantage, this is now really within reach And that is why I'm here to share this amazing success story. Phillips, with the
help of Teradata, and leveraging real time data and real time diagnostic analytics are able to more effectively diagnose problems
and send the doctors to the more critical situations.
They are integrating health care data from different places and using machine learning to identify abnormalities, and they're doing it really fast.
That I wanna talk about is Qantas, Australian Airline. Their budget for fuel alone is $3,200,000,000 a year, a 1% improvement is $32,000,000, 2%, 64,000,000, you get the idea. But they need to do this at scale. They operate more than 90,000 flights a year. And every single one of these flights, creates 2,000,000 data points per hour.
They need to combine flight data, operational data. Weather data, delays, airport data. And with Teradata, they can. With Teradata, they have improved the fuel efficiency of their fleet by an additional 1.5%.
When we brought in these more advanced algorithms into Danske Bank, We increased the rate at which we caught the fraud. We detected a fraud by more than 50% while simultaneously, reducing the number of false positives. We're catching more fraud, and we're reducing the number of people that we annoy by reducing the number of false positives. This is the power of these advanced algorithms.
And the fact is health care companies around the globe is using teradata to harness the power of data and deliver answers and rise above all these complexities at scale. So if they are able to do it, no matter which industry you are part of, you can too.
It's not good enough to just be in commercial software only. There's a lot of great commercial software out there. But there's also a lot of great open source software out there. And you want to be able to bring those capabilities into your Vantage environment. So Vantage is not just about things that Teradata builds or Teradata partners build.
It's also about bringing the open source community IP into the analytic environment. And this list is changing all the time this space is moving very, very quickly. And if you plant your foot too hard onto one particular tool or algorithm, you will be wrong in 2
or 3 years. Our platform is highly distributed. You all know this. So we are obviously taking advantage of that. Our customers at the world's most demanding workloads.
We know it. We always knew this. The same applies when you start playing with AI. What's special about our customers is that the datasets are large. The number of models are large.
The complexity is high. One customer we are talking to has 1,500,000 models that they want to run-in production every day. There's another customer, this 400 data scientists, and they will all create, delete update, modify their models, ad hoc, anytime. Our customers are used to running 100 of 1000 of queries simultaneously, seamlessly, it's all scheduled for them. Now when they run machine learning models, why should it be different?
The key commonality in all of these is getting the right answers from analytics at scale. It takes pervasive data intelligence. With it, Teradata is touching 100 of 1,000,000 of people's life and has the potential to touch 1,000,000,000 of life. Teradata can handle the scale and complexity every single day.
What data should I be looking at? What's the data that really matters? What's the data that I could use to predict the outcomes that I'm interested in? This is the promise for Vantage. Our goal is to help you, help your decision makers, transform that data into answers the drive outcomes in your business.
This that's a lot to take. I know. So actually, this is all about just one thing. This is about one platform that we are giving you, the Teradata Vantage, I've seen it behind the scenes. So trust me, when you try it, it will totally change your universe.
You
My slides. You're gonna put up my slides. Alright.
Am I right?
Alright. Welcome back, everyone. Thanks for coming. We'll hopefully do this more often in our lovely new corporate campus here. I'm Mark Helhane, EVP CFO.
I've met many of you and we're almost all of you over time. So I wanted to take some time today to put in perspective our strategy that we're driving to. Earlier this morning, Oliver gave you an in-depth overview of our strategy going forward You've heard were aligned. The entire organization is laser focused on driving this forward. You heard Rima and Steven talk about our new analytics platform Vantage That's what our customers have been telling us.
They want. We know where we focus in the market. To simplify their data and analytics ecosystems. They need a very scalable, highly reliable, high concurrency, strong security platform, and that's the hallmark of what Teradata has always been and what Vantage delivers. It's clearly uniquely differentiated and performs at a scale that and you heard examples of that across the different customer use case examples that are unique in different that only Teradata can perform for these biggest customers.
So Teradata, we are fully committed to moving this to a subscription recurring revenue business to do that in all about how do we grow ARR. And so I want to spend some time going through each of our strategic pillars and in talking about what's driving that and how that manifests itself ultimately into our financial statements. Some of you have heard me say, and clearly a lot of the folks in the company have heard me say, one of my favorite quotes of all time is a Winston Churchill quote. And it's However, beautiful, the strategy. Occasionally, you have to look at the results, which for the finance guy means, it's got to show up on our numbers.
So we can talk all we want about a great strategy, but at the end of the day, it has to show up in the numbers. So I want to connect the dots for you. Around how these pillars ultimately drive and show up in our numbers, okay? So clearly, relentlessly focusing on consumption. All about driving ARR growth.
That's our 1st pillar. We drive ARR growth. We drive recurring revenue growth. I am maniacally focused on that across the company, which other people in the company would tell you that that's what Mark's key thing is. Is what are we doing to drive ARR and drive recurring revenue?
I'm not focused on total revenue growth because we're in the midst of a transformation where eventually our perpetual revenue is going to go away. And some things we're going to do in and around consulting that I'll get into might result in that revenue declining, which It's not about during this transformation. What is total revenue doing? It's 100% all about what is recurring revenue doing. And so we have the entire company focused on it.
The entire company is going to get paid on it. Their compensation's totally aligned. And we believe we can drive our AR growth acceleration from where we are today for many years to come. So Let's get into what's gonna drive ARR and revenue growth going forward. Clearly, we've made movement to a subscription model.
And we candidly, that's been better than what we expected. Lots of reasons for that. And we're moving away from perpetual deal. Which at some point in the future goes away completely and we're 100% subscription based company. So when you're a subscription based company, that's the only thing you're selling is ARR.
Effectively. You've heard lots about Vantage, how it broadens our market, In our installed base, we think we have an incredible opportunity. The target market we're serving Oliver walked you through $20,000,000,000 plus. It's a great share of wallet opportunity for us because we're, again, uniquely differentiated. It's what our customers have been telling us they've wanted to help them solve the complexity, their cost structure, but it's not it's it's even more about when my conversations with our biggest customers, CFOs, and I've met with most of them, it's we're going to reduce the risk They say, Mark, the amount of risk that these data silos introduced across our organization is unbelievable.
And we need to rein that risk in. We need to rein that, that, that complexity out. And yes, ultimately helps me reduce cost. But when I'm in my conversations with the CFO, it's about, I got to reduce the risk. We got too many copies of the same data, too many why do I have customer IDs in 150 different data sources around the company?
It's insane. So please help. So and then Vantage is only going to be available on subscription. We're only selling it on subscription. Which ultimately we think what we can do for the biggest customers and you've heard from a scale perspective talks and some of the customer examples, we're the only one that can do this for these customers.
And so that ultimately is going to drive our ARR and our recurring revenue. And hopefully you've now will take away that Vantage is a heck of a lot more than the data warehouse. So hopefully that came across very clear in both Steven's talks and so forth that were much more than a data warehouse the value we think that Vantage drives and the increased ability for customers to simplify that, we're going to price it accordingly. So we'll price for the value that we believe Vantage drives. And ultimately, we really believe our ARR growth assumptions can be satisfied by the opportunity just in our installed base.
We don't need a bunch of net new customers to go drive the targets that I'm going to lay out going forward. So as we grow our ARR acceleration, you know, it started in 2018. We had incentivized the sales force, as Oliver mentioned, around conversion and now we're shifting as of 11.19 to ARR. I've done this in my past. We first had to move off a perpetual towards subscription.
And then from there, once you get comfortable that that's working, then you start to drive towards Now it's all about growing ARR. We by the end of the year, another 18 days to go, 19 days and shopping days in this fiscal year. All of our 1.2 ish3000000000 of ARR, we will end the year well in excess of $400,000,000 of subscription based ARR That's up over 100%. We'll be up over 100% year over year. That's not being driven because we're converting perpetual customers just to subscription.
Lots of you have asked me, well, we think your ARR growth is only because you're moving your existing customers offer perpetual to subscription, that's not truly the case because whatever my Delta is going to end up being or our Delta is going to end up being in petual revenue. A 5th of that is when you do a conversion from perpetual description about a 5th of that value is what shows up in ARR, maybe a quarter. And we're clearly growing AR even in 2018 at a significantly higher number than that. So So over time, we think mid-fifteen for 3 year target ops 2021, mid-fifteen's AR growth. It's the target we're putting out there.
We feel good about it. And again, like I said, I think we can drive that just through our installed base. And it's not only going to drive nice recurring revenue, but ultimately then the mix profile of these businesses will be changed. Out into our 3 year target as well. We'll be a recurring non recurring business.
The perpetual business will be gone. We think that's probably in the range of 80%, 20%, 80% recurring revenue, 20 ish, slightly better but in and around that eightytwenty range is where we're targeting to end up in 2021. Mid teens recurring revenue growth But you've probably heard me say, even if we only grow recurring revenue for where we land at the end of 2018 at 10% for each of the next 3 years, Our recurring revenue business will be in excess of $1,600,000,000 in fact, probably just shy of $1,700,000,000 at only 10% recurring revenue growth. And we feel we're going to grow out our target in 2021s mid teens and we feel really good that we're going to grow better than 10%. Per year.
But even at that rate, we have a substantial recurring revenue business. Our second pillar radically simplify the business. Oliver spent a lot of time talking about this both from a customer perspective and both from an internal perspective. This helps us not only we think drive ARR, but really starts to impact the gross margin profile of the business. And that's where it shows up of how we improve on that front.
So let's just take a look at what are we doing there? So obviously Vantage is uniquely positioned us to help them that clearly creates a wallet share increase grows the ARR, but we've radically simplified the product offering. You heard things that Oliver mentioned and Rima mentioned around what we're doing to radically simplify the product Oliver mentioned, Hey, we used to have 12 different platforms. We're down to 1. That radically simplifies supply chain.
Supply chain costs radically simplifies support costs to support the platforms on a post sale basis, both whether that's from an engineering perspective or a traditional customer support perspective. And creates the opportunity for us then given this radical simplification to take costs down out of the business that starts to drive recurring revenue margins higher than where we are today. And then ultimately we also talked about making it easy to buy, simple to buy for our customers. I'm a firm believer technology, particularly software is all about making it easy to buy. And what we're doing from a subscription recurring perspective, whether that's a pure consumption model, if that's the the choice the customer wants, or they want more traditional type subscription model.
That's fine. We offer choice to make it easy to buy. We do it in a construct of a deal that allows them to know how if they invest more and grow with us, what it's gonna cost them into the future. It's a consumption oriented model, not a capacity oriented model. They don't have to sit there and decide the day how much capacity do I need to buy for the next 5 years and negotiate like heck to try to get the best price You don't need all that capacity today.
The beauty of a subscription model is buy it when you need it, consume it as you go, and pay for it as you go. And so that flexibility, which Teradata in the past, wasn't that flexible to do it. Didn't offer all those choices. And so That helps simplify from our customer's perspective of how they can invest and grow in a predictable manner with us at all. As well.
So all of this simplification then starts to drive recurring revenue gross margins into the future. So our 2021 targets mid-70s I've said in recurring revenue businesses, 70% is the minimum threshold, 80% is best in class, very few recurring revenue companies achieve 80% overall gross margins, you know, that becomes some rarified air. We clearly, you know, we're we're low to 70, 72%, 73% we've been putting up. We're going to drive it to 75%, if not better, by 2021. Ultimately, improvements of radical simplification on the recurring revenue gross margin and also what I'll talk about some of the things we're doing on the non recurring revenue things, ultimately start to drive gross margins to the mid-60s.
It's a huge pillar of what we're focused on and what we're going to go drive and do, and we feel very good about it. We know where to go, what we're doing We've laid it out as part of our strategy. And like we said, we're aligned to make it happen. So our 3rd strategy, pivoting to as a service, shifting from a consulting first oriented business to as a service first business. And I wanna reiterate what Oliver said.
This isn't as a service with a bunch of consulting people out doing a bunch of services work. It's all around driving automation. That also impacts our gross margin. Profile of the business, right? We will be managing our consulting business very differently going forward, given how we're aligning it to the new Vantage platform and the strategy.
Our focus on megadata customers, etcetera, means we're going to we're going to manage it and look at that business very differently. And other things that we're going to do around how the as a service manifests itself from a product offering perspective also has levers that pull and impact gross margins. So the drivers here, this autonomous platform, our continued investment in that automating things less human effort needed to be involved. Automating systems, processes, APIs, things that the platform just does that humans don't have to go in and turn knobs and do different things and so forth, contribute clearly to the margin profile of the business going forward. Our focus on megadata customers allows us to optimize what we're doing there, how we support those customers.
How we automate this autonomous platform, how that manifests itself in the support area of the company. How we're focusing consulting around driving consumption of the Vantage platform, which drives ARR, obviously, But it's all around the high value, high margin types of things that we're going to focus on going forward. And deemphasizing the lower of our lower margin aspects of our consulting business today. That likely manifests itself in less consulting revenue out into 2021 and how we transition from where we are today to where we're going on consulting. But the result is the margin profile of that remaining consulting business is highly more profitable, highly more strategic to driving our ultimate overall view across our and our customer profitability as we look at that and things like that.
So, and then ultimately, we're also going to end up leveraging more of a partner ecosystem than we've done in the past. We don't need to necessarily do everything we do today. Don't necessarily need to do that. We can leverage some partners to drive some of that as well. So that then says Our nonrecurring revenue margins also start to help contribute here in how we look at our nonrecurring business and how that changes from where we are land in and around today to where we're headed, right?
And that also is a driver given the mix assumptions and improvement here of how you get your overall gross margins from 50 to the mid-60s. Transforming our go to market in our brand. You've seeing a lot of what we've done around the brand and how we've repositioned Teradata, not only with our customers and prospects, Hopefully, you're starting to see it. We hadn't done a lot of significant outreach to the financial community and the repositioning of the brand. We started that at analytics which some of you attended, several of you, weren't there.
But it starts, that's the 4th pillar. We think it reduces operating costs. Clearly, will help drive revenue, but reduces operating costs, which then manifests itself in better operating profit profile to the business. So around our transforming our go to market. Megadata customers.
So we're aligning our sales motions to these megadata customers in a much more focused way. Allows us to streamline and optimize how we go to market, where we're gonna invest allows us to take a look on. We have existing customers outside these megadata customers and they're still important. We're not going to abandon that. We still have that those customers to serve, but we think we can do it in a much more efficient model, much more of a commercial oriented model.
Less dedicated teams, more shared team concept much more like a commercial model versus our true megacompany, which is much more like an enterprise model. That obviously lowers cost out of the go to market machine that drags with it the ability for us to look at What geographic rationalization can we streamline? What does that look like? What opportunities do we have to take a look at that? To streamline that, whether it's from a management perspective, an outright country perspective, what are our most profitable countries that we should focus on and the ones that are less profitable.
Do we need to be in that market 1? And 2, if we do, then how do we do it in a more streamlined way? That also then helps drive cost out of the business. And by doing that then, the overhead machine behind that, that is all around the sales support and all the support and care and feeding you have in a company to support your sales organization starts to get simplified, standardized, much more streamlined, creating opportunities yet for lower sales support costs across the company. And we're embarking on that as part of this as well.
And then obviously, ultimately, the new brand positioning pervasive data intelligence clearly is broadening our market opportunity. Our relevance in our market, I get asked how do you guys maintain your relevance in a rapidly evolving technology market. Vantage is the first piece of that. The brand. And then as we evolve and Oliver alluded, there's more things coming later in 2019 and beyond that we think we continue to be that key player.
Uniquely differentiated, solving problems that only we can solve for the biggest players out there. That ultimately allows our Vantage platform to be the analytics platform for the biggest companies, biggest data companies out there. And we do that. It's gonna be will manifest itself in our financials very nicely. So all of this drives operating performance improvement, right?
Which then ultimately increases operating income. We are embarking on an operational excellence program Some of that is external focused. Again, how do we simplify things that's going to, you know, how does it help improve margins? It ultimately helps improve EPS. And free cash flow for sure.
And so when we look across these of these drivers, we have to become more efficient, more automated we're going to make investments in automation and efficiency throughout the company. Some of that is investments to modernize our systems and processes to more, best in breed technologies, replacing a lot of the manual processes we do today. A lot of it is how we simplify the organizational structure around the company to be laser focused on what we're doing on Vantage and growing ARR. We've outsourced certain and at lower cost versus saying we don't have to do all of that in house From a customer perspective and we've talked a lot about it, we're simplifying pricing, we're simplifying deal structures, we're simplifying the accretion to make it easier for customers to buy Terra Data. All of that drives efficiency and cost out of the business And then ultimately, all the things we're doing around the radical simplification as a service that's going to improve margins also helps drive our operating income improvement.
So our target out to 2021 20% to 25% operating income in 3 years. We feel very good about it. It's the one we have the most control over. We can't force a customer to press hard, sign here three times, but one thing we can do is manage the cost side of the business. And we will do that.
Obviously, if we improve our operating margin profile, EPS also improves. We see more than a doubling of our EPS out in 2021 from where we are today. Both 'seventeen where we landed 'eighteen. That's not through buying a ton of stock back to get us there. That's an assumption of the same weighted average shares outstanding we have today we may have in 2020.
We won't, of course, because we'll continue to stock back, but this is not being driven because all you guys going out and buying a bunch of stock over the next 3 years to achieve that? No. It's going to be achieved inherently through the financial performance of the business. And that then ultimately says from a free cash flow margin prevent by the way, the 20%, 25% is we're plowing new ground here, this business has been in those ranges in the past. So it's not like we're going to get there for the very first time.
So it's very doable. And then ultimately free cash flow margins out to that 20%, 25% range as well in 2021. From where we've been.
And we don't see any reason why that's not that
$400,000,000 plus level that the company achieved in the past. Even if total revenues roughly flat in 3 years because you're out of the perpetual business, you've aligned consulting strategically focused, which means there's less consulting revenue. So you're growing recurring, but, hey, 10% growth on recurring and $200,000,000 less in consulting. I'm not saying that's what it would be, but if it was, it'd be around $2,000,000,000, but 20%, 25% means you got $400,000,000 to $500,000,000 of free cash You guys can decide whether that's meaningful. Do your discounting back to today and determine whether if the current stock price is expensive, cheap, fairly valued.
We leave that up to you. We're going to go focus on our strategy, our execution, which ultimately manifests itself in these financial targets and the rest takes care of itself. So in summary, what's going to drive our success is clearly Vantage enables to share a wallet increase opportunity We think it allows us to drive our ARR growth assumptions just focused on our installed base. We don't need net new lots of net new customers to achieve these targets out to 2021. That opportunity exists right now today.
In the existing customer base we have in these megadata companies. We're moving away from perpetual to subscription. We're making it easier to buy and easier to consume our radical simplification, whether that's on the product offering side, the operational excellence sides of things we're doing We start to see both recurring revenue, consulting margin improvement that drives overall gross margin improvement are go to market aligning, transforming that business affects the OpEx side of the business, all of which then drives to the operating income performance we're laying out. And ultimately, that hits the free cash flow targets. The good news is we don't believe we have churn and huge renewal risk the subscription AR, this $400,000,000 I've been talking about, there's not a significant portion of that that's up for renewal in the next 2 years.
Our maintenance related renewal business has virtually had no churn. So we don't see a substantial risk we got to worry that there's a significant churn risk here that could derail these targets. And clearly, we think we have plenty of runway to increase our ARR to achieve our 3 year targets. So with all that said, out to 2021, we are now a complete subscription bookings mixed company. We are midteens on ARR growth as well as recurring revenue recurring revenue gross margins are mid-70s.
Consulting margins are approximately 20 ish, which means gross margins are in the mid-60s. Operating margins in that 20% to 25% range. EPS has more than doubled. And free cash flow is in that 20 percent to 25 percent range. That's our 3 year targets.
That's what we're driving towards Now how do we get from there from where we are today to there? So for 2019, We're going to give you more color on that on our Q4 call. I'm not going to get into specifics today. We haven't finished the full year However, across our key metrics ARR growth, recurring revenue growth Gross margin improvement profile, operating margin, free cash flow, we expect improvement in 2019 over 2018, We expect improvement in 2020 over 2019. And ultimately, we are going to land at these targets and in the range of these targets.
In 2021. It's not a hockey stick. It's not a little now and a little in 2020 and bam, you can get there all in one fell swoop. It's not perfectly linear either, but there's measured progress across the metrics over each of the next 3 years. We're bullish on where we're headed and what we're doing.
It's why the company has bought back a lot of stock in 2017,000,000 dollars, $315,000,000 bought back a lot stock in 2019, $206,000,000 through the 9 months and more in Q4, we'll see where it ultimately ends up because we're bullish and where we're headed We believe in the strategy and we think our excess cash is best used to go drive return value to shareholders through stock buyback. Because we're bullish that we believe in 2021, the profile of the business, the valuation of the business is dramatically different than what it is today. With that, I thank you for coming. I'm going to ask Vic to come back up. Obviously, we will update you on the progress over this next 3 year journey.
It's it's a journey. It doesn't happen overnight. The nature of our business is very evolutionary, not a transaction with our customers. We're going to be with them. All along the way and not just one big fell swoop and then walk from these customers.
That's not the nature of the relationship we have with these biggest customers. So Vic, I'll turn it back
Ah, so that's the presentation stuff. We'll do QA in just a minute. Last night, when I was wandering around, a lot of folks asked me, said you seem happier than you did 2 years ago. And the answer is yes, I am. I'm much happier than I was 2 years ago.
You've heard we have clarity. We have a great team. I've done transformations before and Part of that is we see all the stuff earlier than you do, right? We see what's happening. We know what's going on.
You can lead through change. But if at the end of the day, you turn around and you're out there by yourself, you've failed, right? The idea of successful change is you have to bring along a team who can do it and that team has to include everybody in company. And when I first showed up here and I'd wandered the floors, it was pretty quiet, pretty dark. A lot of questions about are you here to solve a company?
It doesn't happen today. I get emails lately that just stunned me about how excited people are about Teradata. Our folks are with us our customers are with us. In this transformation, we had the number one thing you need to be successful. Customers who appreciated what we wanted to do and wanted to do business with us and are grateful for the change we're making.
So I can tell you that I am 100% confident
and what we're doing here.
I know we've carved out a market that nobody else is after right now. Do I expect somebody else will come along? Absolutely. Do we have competition today in some areas? Yes, and we always will and we always have.
But instead of being a victim, Our role is to be an aggressor. And I always have a visual and I tell the organization about it. I carry back and probably I don't know how half of you in a room probably aren't old to remember Indiana Jones movies. But there was an Indiana Jones movie where Indiana Jones comes out and this guy comes out as huge guy with sword and he's swinging around and screaming and yelling and Indiana stands are for why I'm pulling out a gun and shoots him in the head. I like a pistol.
I'm not very fond of swords. And we have to have the attitude about having clarity around, we are how we win and make sure we are totally focused on that. We communicate to our people, And I can tell you we're going to do that. We're going to win. We're going to win along the lines that we talked about.
I've said, before, and I think there's a huge difference in an organization between confidence and arrogance. Arrogance is death, and confidence is what you need to succeed because if you do not believe you're going to win, you won't. You cannot do what you don't believe you can do. And I found over life, if I believe enough in things, almost anything I crawled on broken grass for the last for a long time before I got my wife to say yes, she'd marry me, but I stayed at it until she did. And we've been married tomorrow 50 years.
So, so I know what we're going to do here. I know there's skeptics in the audience. I understand we have given you Teradata has over the years reason to be that, but we understand the world's changing. Our job isn't to follow, but to lead and leading ways that we have core competencies in. So with that, we're going to do some Q and A.
So I'm going to ask the presenters to join with us here. And we'll take whatever questions you've got. I guess we have to get our own chairs too. I don't know.
You
have to talk loud.
Alright.
Yes. Alright. Okay. So we'll have a couple
of mics, in the IELTS here. And if you don't mind, if you'd state your name and affirm your list, so we'll start with Carl, right up here.
Thank you, Greg Karl Keirsted at Deutsche Bank. A great presentation. Thank you for hosting us and Mark, thank you for all the details he gave on the out year targets. That's super helpful. I'd like to 0 in, if I could, on the, assumption that to get to those 2021 targets, Teradata is not going to see significant churn.
So clearly, you've got a number of ELAs that are coming up for renewal over the next 2 to 3 years. So if I could just press what gives you the confidence that you're going to renew all those ELAs and your customers are not going to shrink them as they move to cloud based alternatives? What gives you that confidence?
Let me take that first and then maybe Martin can give some more color on that. It's back to our strategy and to the track record that we have seen over the last 2 years. When we launched Heritage Everywhere, there were a lot of unknowns. And when we went to the customers and we saw their reaction, we saw a change in behavior. We saw that they really appreciated that new look that we took in terms of what Teradata is.
And they started opening up and telling us what they need next. Which led ultimately to Vantage us releasing Vantage, right? So there's a very clear message coming from our customer base in terms of what they expect us to deliver for them. Invantage is that next step and we are talking about that. There's more coming in 2019.
We've also renewed several of these ELAs and other things in the last 2 years. And we saw what happened in these cases and how we have dealt with that, right? So, this gives us the confidence that overall, where we are coming from, we feel that there's a very strong base, very strong renewal rate. It's never going to be 100%, right? But It is not something that is a big thing that we worry about because that increased focus, that increased functionality, sort of matured everywhere going to Vantage, it's what's creating that interest.
And at the same time, it's these executives that are telling us they actually need help simplifying their infrastructures.
Mark, do
you want to add something? Yes.
And so, yes, I would just echo that historically we haven't seen it. That doesn't mean that that's necessarily a perfect predictor of the future. However, our customers and where we focus have explicitly. This is a hybrid shift things we're doing that are mission critical at the scale that we need it done and move that to the cloud anytime soon. And we said, We understand that.
The hallmark of Teradata Everywhere strategy is if you have those software licenses on a subscription, you get the portability. You have the ability to move it to the cloud when you want, when you need to do it. With the same, not a single change in a in the line of code as Stephen mentioned earlier. So if there's an assumption that this is gonna move all to the cloud and we're gonna get run over by the cloud native companies, I respectively submit. I totally disagree.
We offer our customer base choice for the cloud today they are not choosing to go do that today. But in the future, if they want to, we have an option for them to do that as well that is seamless for them. And that was one of the key tenants and hallmarks of Tiara data everywhere. So that's why we have confidence. We don't think we see a churn churn significant churn risk, specifically given the scale that only we can perform for these biggest customers.
Okay. Wamsi?
Thanks, Wamsi Mohan, Bank of America. Appreciate the details of the presentation today. I was wondering, your traditional go to market looks like you might have to change that in some meaningful ways over here. Given your strategy is much more aligned at sort of having discussions at the C level versus maybe more with the IT side before. So How are you thinking about this go to market?
How much more of a partner dependence or SI dependence do you expect over the next few years and does it change your economics as well when you do that? Thank you.
Thank you, Ramsey. Let me take the first part of that. So we talked about our strategy being focused on these megadata companies, right? And we started talking about top 500 2 years ago, right? We've learned a lot along the way.
We have improved our go to market market model along the way We've introduced new ways of strategic account planning that traditionally we haven't done. We've learned how to address C level executives and how to, you know, listen to what their strategic needs are, right? And, is there more work to do, to get there? Absolutely, right? But We can strategy this year, we have further segmented the megadata companies and we know how to differentially, differentially treat these segments where most of the growth of ARR within these segments will come out of, that means where we will spend most of our investment dollars in terms of driving that growth, right?
And ultimately, we just feel very solid that based on the experience and based on that increased focus, in the feedback that we're getting from the customer base and the successes that we have landed and the customers we have converted that we are on the right path to do so And, we know what the next steps need to be. And you will see us focus on that. In 2019, we'll further fine tune that in the line the incentives of the leaders of all of our people, very solidly behind that go to market model. That covers these megadata companies, while at the same time also taking care of all the other customers that we have, but in a different commercial inside sales type of model, which also we have tested over the last 2 years with great success. And so that gives us a great coverage model, I think, to go in to that.
I'd say that the other thing is the focus on answers as opposed to the plumbing allows you to have different conversations with different people in the organization. Right? So focus on the people who are creating outcomes, who are creating the business value, those are the people that actually have the budgets that will grow the consumption of Vantage. As opposed to the the plumbers. Keith?
From Bank of Montreal. I wanted to ask you on Vantage. How much is has been new technology innovation and will be to technology innovation? And the context of the question is many times over the last number of years, companies when they face new market dynamics make declarative statements on strategy change without real change in products underneath it. And I did attend the recent customer event in Vegas.
And I think there was my perception, general confusion around what Vantage really is and what's changed. And in the past, Teradata has actually had strategies identified where the data warehouse was a node in a network and trying to get in the middle layer activities. And so I'm still a little bit unclear about what's new advantage from a technology perspective. So when you're going to customers, they say, okay, there are new APIs or there are new things. So they're actually writing checks for new products.
So if you could just talk about what the underpinnings of technology are today and what they might be? Thank you.
I think we're going to reema tell us a little bit about the integration that we have done there, there's a lot of innovation happening in that space overall, right? And Rema can tell us more in detail what that There's also technologies that we have simply integrated that we have, right? It's a mix. This is not brand new, as Rima said before, we're building on the core that we have ultimately, what you're seeing, and Steven can comment more on that in the use cases, it's that bringing together that simplification together with new things this year, we added things like time series support, like for the analytics that Terjeon never had before, right? So there's brand new components, together with bringing together things.
And Rima, by the way, she probably managed the largest cross functional team that we have ever had in Teradata to make Vanta Chapman. So, Rima, maybe you can tell us a little bit more about that.
Yes. So, thank you, Oliver, and great question there. It's It's a matter of obviously existing and new innovation, right? Oliver mentioned, right? And we have also, proven that through 4 d analytics.
Let me take a moment to explain what Vik and Oliver continuously said through this whole session. Our focus is to really make sure that our customer is successful. And what does that mean? It's not just through technology. It's through how we bring automation into the mix to provide shortened that overall downtime for our customers.
That means you have to create innovate you have to instill innovation, not just with technology, but looking at the end to end process and say, What are the timelines that it takes and what is the creativity we can apply through automation? So taking that manual effort out That means it is the not the planned downtime alone, but even the unplanned downtime alone because that's cost again for our customer. Right? So shortening that, it is making them successful and are successful in pain. That's one.
The second one we are creating innovation within ourselves, within our company. So we have come out with concept of a test as a service. Like you heard a customer speak, I also alluded to the fact is how can we reduce that time taken to build test and deploy? We are applying that same logic within Rx system, existing operating mechanisms to reduce our time taken to build answerable outcomes for us and for our customers. And in an effort, not just to use it internally, but to hand it to our customers so that they can use that test with the service as a tool to reduce their regression cycle.
So creativity is not just through technology. The innovation is not through technology. It's also looking at means of how we are improving our processes
the Teradata database and Vantage. Teradata database, there's still a foundation there, and it's a component advantage. But these analytic engines which are again containerized and delivered as services with the extensibility, that's brand new. That did not exist before, right? So one of those engines is machine learning engine.
That's actually, in some sense, a repackaging of what Astrid did, but with the separation of the analytics and the storage. And then there's engines which are completely new, which we'll be delivering next year, like, for example, TensorFlow and Spark from the open source community, This would not have been possible if you just think about Teradata as a database. It's fundamentally different.
Thank you Katy Huberty, Morgan Stanley. Just a quick clarification to follow-up on the last question. What does the revenue model look like product portfolio? Is does Vantage supersede IntelliFlex or is it an add on on top of the core that you're selling? Can you just comment on that?
And then I'll ask my question, which is coming into this year, you had a goal of signing some tens of new logos Can you just talk about where you are in meeting that? Is that even the right way to think about the business? Because Mark, you sort of deemphasized the need to to bring on new customers. And then on the other end of the model, do you have any metrics do you track? I assume you do.
What market share is in in the wallet share of the installed base and what a reasonable goal of wallet share would be on an annual basis going forward?
So maybe let me start off with the Vantage versus IntelliFlex question here, right? Our strategy is clearly to move beyond hardware. We're supposed to speak away from hardware as a meaningful building block in what we are doing. Vantage on top of tier 2 everywhere, of course, will always run on hardware. The cloud is built of hardware.
And so yes, we need to have the expertise to optimize Vantage to run best in the various different platforms of cloud. And yes, we have a by now a very simplified IntelliFlex platform, by the way, that since the beginning of this year, middle of this year, the latest iteration of IntelliFlex that we released, is no longer custom. It is now a very standardized software defined just behave just like the cloud because it allows us to abstract away from that. Our business model is removing hardware more and more from the conversation. It's about the subscription, and it includes all the as a service and all the hard work that you need to run, whether it's in your own data center, whether it's in a public cloud or in our cloud, And so the focus is shifting from hardware as the center of the universe, which is was for Teradata, 5 years ago to an yes, of course, there will be hardware and then enabling somebody's data center, but by us simplifying that, there's less focus on that.
And the conversations nowadays that we have with customers are tracking with that. We are having way less conversations of our hardware boxes anymore and much more about the capability of something like Vantage, right? In Teradata everywhere, so to speak forces us to abstract away from the hardware because you have choices where you want to run this and you don't care what the underlying hardware is. And by the way, if you look where the whole industry is going, And if you look where other cloud providers are going, everything is going away from hardware because hardware just has complexity and nobody wants to deal with that, right? And so that's a big part of our strategy is put software, subscription, consumption first and enable that through whatever is the best possible platform in the different deployment choices that we have.
And we work very closely with AWS as well as with Microsoft Azure, to help them test their infrastructure, scale out their infrastructure, a lot of learnings in the last 2 years when we first showed up at the doorsteps of the public clouds, we literally took public cloud data centers to their knees because they've never seen software run so efficient and extract so much out of their existing hardware than they have, but they are very fast in learning that. And and it has helped us scale in these environments, right? So de emphasis on hardware, focus on answers, focus on Vantage, as a subscription offering and soon to be a consumption offering in 2019 that we said.
Vantage is the new version of Teradata. It's broader than the data warehouse and it's only sold via subscription.
Yes. Very good.
Yes. Your question was sort of what share of wallet do we have inside our existing customer base and how do we think about that? It's basis points. It's not 1% across our installed base customer across our focus, we have probably less than 1% wallet share today. So we think it's an enormous opportunity to grow that spend inside our existing customer base.
It doesn't mean we're not going to focus on net new logos into the future. It just means I don't believe we need to land 50 new logos every year over the next 3 years to achieve these targets. These targets are not dependent on a huge driver of you got to go get a bunch of new customers to do it. We don't. That drives upside to these targets, we believe.
Maybe to add one more thing to that. And yes, we signed net new logos. We have deemphasized on reporting out of that. And yes, we hit We hit the goals that we had for the year in terms of new logos that we wanted to sign up.
Great. Thanks. Derek Wood at Cowen. Could you give us a sense for how easy it is to transition to Vantage and from a technology adoption standpoint. And then, Mark, you've talked about revenue uplift when maintenance to subscription and when you go to a subscription contract, since you're talking about Vantage being a broader platform, do you think that that's going to provide more of a revenue uplift at initial deal?
And is pricing going to change at all from being based on TCOR? Is it still going to be TCOR priced?
So maybe on the first part of the question, for the existing customer base in the megadata companies, the adoption advantage is very simple. That was a big part of what Rima and team have driven to make that as transparent as easy as possible compared to what you have done in the past. And by the way, our customers have been telling us very clearly, you know, a weekend of downtime, to upgrade systems, sorry, doesn't cut it anymore, right? I don't have that. And so a lot of that innovation, by the way, went into some of these things, whether it's elasticity, whether it is getting into Vantage, right, for an existing customer that is very simple to adopt.
For customers that don't have any territory or technology today, right, we have migration services that we have built over the years to help them when they have a Netisa box. So when they have a green plum box or when they have any of these services, to get that data on it. And what we are seeing, by the way, is now customers coming and even saying, Hey, I put a couple of these cloud instances out there. Can you help us consolidate them back into a Vantage instance because by themselves, they felt very easy, but now they become very painful for us, to operate and run on.
And so what we've historically seen, if a customer is completely converting off all of their existing perpetual licenses to all subscription. We've historically seen that be 1.25x uplift, depending on how many additional software are they buying, right? Into the future given Vantage, Over time, I think we have the opportunity for that to be larger. I don't know if it's larger than the 3x in the initial transaction because again, this isn't a transaction oriented kind of thing a one time. They will iterate, okay, we're moving off a couple of these.
We want put them on Vantage and then 96, 9, 10 months later, they're bringing more to it and more to it and more to it, particularly in a consumption oriented model. And so but yes, over time, you could look at that and say, Hey, I think we probably could do better but I don't know if it's in the initial fell swoop, the initial adoption of it. Do you see that? And we're not telling company, you don't have to give up your perpetual license keep them, continue to pay that historical maintenance. Happy to have you do that.
You don't have the portability aspects for those, the ones you do on subscription and we'll wait till the customers come back to us and say we'd like to convert all those versus try to lead and convince them to do it. Now to your last question, is pricing changing? Yes. We've pricing for the software side of what we do given what Vantage drives is changing come in January 1.
Zane?
Thanks very much. Zane Crane with Bernstein Research. Great presentation today. Was wondering as far as your ARR forecast through 'twenty one, how much of that do you expect to be coming from conversion of existing workloads inside your current customer versus new workloads that those customers are building that are maybe being enabled by the new technologies with Vantage. And then separately, Would you ever consider giving a renewal rate on a quarterly basis?
It seems like your churn rates are very low based on the ARR you've been adding, but just to make that more explicit, would you maybe consider giving the churn rate on a regular basis? Thank you.
So on the again, on the first part, on the ARR growth, Is it driving the conversion driven by conversion versus new workloads? We see it primarily by expanding and new workloads. That are happening. These types of workloads that we saw some examples here today, even, right? These are workloads that were previously done off platform.
That were previously done in other environments and that are now starting to come into this environment because of Vantage, right? Also as some of these companies are growing, they need more because they have, obviously, more sources, IoT. We talked about new types of analytics that we have brought in there. So we believe that a healthy part of that ARR growth will be new and expanded use cases of even some of the examples that Stephen shared with us. And in many
cases, those expanded use cases are reusing the same data that they already have, which means that it's relatively rapid to deploy the new capability.
It's Tyler Radke from Citi. So it seems like you've been pretty pleased with the overall bookings performance year, you had upside to your subscription mix targets. I think, Mark, you talked about a 55% increase in backlog. In the most recent quarter. My question is given the strength and you kind of have this strength in a year where you've been comping on TCV and sounds like you have a pricing change that's been, previewed to the customer.
So how much of that strength has been kind of pre purchasing in anticipation of this pricing strength? And what gives you the confidence you can accelerate ARR next year because, you know, you do have the change, to pricing and, you know, reps will be compensated on ARR versus, TCV.
We actually think that quite the opposite is happening. There's no pre purchasing happening. Because the customers are telling us they want to buy more just in time, okay, this is the consumption model that they're asking for, right? They don't want to pre purchase And we have we have we have taken the the the go to market organization away from that concept of like that's presell as much as possible for X years of capacity because we don't think that's the right way to look at that, right? Our customers want answers.
They want flexibility. Want to do it just in time and none of the actions that we have taken are those of prepurchasing something, yes, TCV leads to longer contract terms, yeah, got that, but not to more TCOR consumption upfront, right? And we believe that the position that we're coming in with and the switch in the go to market to focus on ARR will be a healthy driver for that in 2019.
Pre purchase is kind of old style wheel of vine. And what we see when customers move to consumption base, they actually grow faster because then they're not they're certainly not buying a box than trying to fit in the box. They use what they need to deliver business value and there's no box, there's no constraint.
Jennifer?
Jen Lowe from UBS. I just wanted to follow-up a little bit on Vantage and going to Katie's question about new logos. And I know that that's sort of a secondary focus versus growing wallet share within the existing, but it seems like with something like Vantage, if you get into a new customer they're they're able to extract data out of their existing data assets in addition to new, taradata investments maybe faster with something like Vantage. Is that a scenario that you could see playing out where because you're able to get so much value with Vantage out of existing nonteradata assets, maybe it drives those deals a little faster?
I would say that actually sort of the opposite in the sense that the customers that are already there and already have the data, it's much easier for them to use Vantage because the data is already there and then they exploit the data and they create value and that drives sort of the consumption, right? Somebody who's not a teradata customer who doesn't have a strong foundation, it takes them time to build up that foundation. Now again, that's very important because that builds future pipeline and growth and so on. If you're talking to the point of your question, what's going to be faster? It's going to actually be the customers who already have lots of data there and then they're just finding new ways to exploit that data.
That's my opinion.
And so our focus on share of wallet, right? Having said so, the conversations are absolutely starting with the prospects in that space because they have the same pain points and they are now seeing that other customers are getting those benefits, right? But we will never be in a rapid fire quick sales cycle environment. These are megadata companies. These are large scale environments, right?
Does Vantage make it easier compared to what it was before? Yes. Will a consumption model make it even easier than what it is today Yes. So we are layering in the right things, but let's make no mistakes. We are dealing with the largest multi multi $1,000,000,000 companies in the world and for the scale that we operate, again, not just turn on a departmental small little system, but to help them simplify a much larger architectural thing, that, that will take time and it takes time and it's something that we're used to, in, having said so that derisking part of Teradata Everywhere, the derisking part advantage with the existing customer base is certainly something where we're seeing, okay, they're faster making decisions because like there's less risk to that decision for them.
Yeah. And I'm going to step back just a bit. Okay. And because we have it taradata the Vic standard, right? So if we can reduce the explanation to where Vic understands it, everybody in the company gets it, right?
So I try to think about why is this different? Why do people not? So let's take Vantage and what is it? Why is it different? And I think it's for being in the room to get away from thinking about what Teradata was and what it is.
And this platform is a platform I think about it in real simple terms. And why it's key for us. The ability to ingest data from everywhere, not just from our care data platform process on it. The ability to use multiple engines to do that, a platform to develop analytics on the top. So it becomes something that you can ingest data from everywhere, not just what we own today to drive analytics.
We're going to allow expansion and increased rate of analytics development because you have a protocol that's consistent And so from a business perspective, it provides access to a broad field and you heard the discussion that we had a little earlier from the customer about the ability and what it does for speed to have one source of the truth. That is incrementally powerful and profitable for our customers. That drives business outcomes in the way something never does. And so we We don't have to think about things the old way. We don't have to go in and they can put everything in Teradata.
That's not what makes this successful. It is the ability very different than what we've been, okay? A lot of the things we're doing, another company I want to make about new customers and all that's great. Remember, we're in a transformation here and you know, it's like the old saying, it's hard to remember the objective was to drain the swamp when you're up to your ass and alligators, right? And so we have to make sure that as we move down the road, that we are ready for that.
And we have to get we had our existing customers, we get them, they were going to grow under the new But it's important that when we go out as Teradata and execute against our strategy that we do what we've always done, And that's kick ass and do exactly what we said we're going to do. And so we've got to be prepared everywhere we go to show up as Teradata. We don't want to show up and somebody comes in and throws off during the lap and says go find 15 SIs and come in and make this work. That's not who we are and not who we're going to be. And so it's important to think about the new Teradata.
I know what we always did, the corals, we got all of that's great. It's what makes us live long. A lot of people say, how do you know you're great? And I said, because we've been around 40 years, and we've got competitors that are 18, 20, 40 times as big as we are, and they haven't killed us yet. So we must have something, right?
I don't understand the technology, but I know it survives and wins and our customers like what we have. And so thinking about that new teradata What we have is part of it, but it's not where we're going. It's why this is so unique and different. And you kind of I have to stand back at times and think about exactly what does that look like? And I draw everybody's tired.
I draw a triangle, right? And on the bottom is ingestion of data. But you know, the ability and Rheem is working on this to cleanly ingest data for multiple poison. That's the Holy Grail. I mean, ask anybody if you if I can ingest clean data from any data point into a platform, that's the Holy Grail and a common protocol to develop analytics.
Saves it. It reduces cost complexity and risk. So that's how I think about it. That's the big explanation of where we are and why it's different. I don't technology is a part of its key, but why should we do any different than what we tell our customers?
We tell our customers, drive answers through teradata analytic platform, technology supported business outcome lab, right? That's what we're doing on our own technology supports it, but we're driving business outcomes.
Hi, Priy from Barclays Research. Two quick questions. The $400,000,000 in ARR, is that pure subscription ARR or does that include cloud upgrade rights, sorry, not upgrade rights and cloud? And second question, when you move to a consumption based pricing, how does that affect how does that affect pricing? Is it still that 1.25to3x uplift?
So the subscription based AR is subscription. It doesn't that's not maintenance software. We write whatever. It's everything on a subscription contract. Whether that's deployed on prem or in the cloud.
And the second part of the question was, Help me.
It was about pricing, when
Oh, oh, yeah, the consumption model, right? So, early indications in our work that we have done there is that consumption model actually accelerates, consumption of inherited advantage in the the pre work that we have done and the tests we have done with customers, show that it's a potential significant uplift on CAGR. In terms of their adoption of that technology because they're no longer bound by secure capacity boundaries, but they can at a moment's notice consume just in time what they need and that usually leads to more experimentation and that usually leads to more outcomes that then drive more consumption of the platform.
Okay. Well, we told you we would get you out of here before noon. So I do know we have a number of people in your flights they're trying to run to. We'll probably conclude the Q and A here. We do want to thank you for coming your participation both here in person and on the webcast as well.
Please stay tuned. We've got some exciting things going on here. We're looking forward to reporting our results in several weeks here, but Again, thank you for coming. We do have box lunches outside the room, so you can take those and go, especially for those who are on the run. And again, thanks for joining us.