Teradata Pulls The Pin On Marketing Tech. What Next?

Teradata Pulls The Pin On Marketing Tech. What Next?
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Teradata’s decision to withdraw from the marketing tech race, after building the business for several years has surprised market analysts. The question is whether this will start a rush for the exit for some of the second tier marketing cloud vendors, or whether it is simply unique to the company’s own circumstances.

As vendors like Oracle, Adobe, Salesforce and Marketo double down on their investments – particularly with an expansion into ad tech, Teradata would have been hard pressed to follow given its constrained circumstances.

CEO Mike Koehler (pictured below) announced the sale of the $200 million group last week in an earnings call, saying instead that Teradata would focus on its analytics business (itself under pressure from the emergence of open source technologies like hadoop).

CEO Mike Koehler

In its analysis Gartner suggested that despite the acquisitions of Aprimo and eCircle in recent years, “Teradata has long struggled in the application business as it is better known for data and analytics, and selling applications to marketing buyers is not the same as selling data and analytics to IT buyers.”

That’s ironic, given Teradata was an early pioneer in marketing technology and in fact was simply returning to the fold in recent years.

Analyst Kimberley Collins in a note to clients outlines four possible scenarios. The most likely is that the company will sell different applications to several different software vendors in order to help them extend their existing marketing capabilities. Such a move is not without risk in the digital marketing industry, she says.

Almost as likely is the new of a new entrant (presumably private equity or a company from an adjacent market) could buy the marketing business outright.

Gartner suggests a sale to a single vendor is less likely due to the problem of a redundancy of applications by the acquiring vendor. That is slightly mitigated if the vendors lack significant marketing tech already (SAP, we are looking at you.)

According to Collins, “Marketing Resource Management (MRM): MRM is the “star” product in Teradata’s marketing application portfolio, with a robust solution that has long been a leader in Gartner’s Magic Quadrant. It would be a great opportunity for a vendor to enter the MRM market in a signicant manner.

“Although MRM continues to be a strong seller, traditional Aprimo customers have expressed post-acquisition dissatisfaction with Teradata’s customer service, account management and pricing, leading to client retention issues. A new vendor could bolster customer satisfaction and drive sales momentum.”

And finally, the idea that Teradata might spin of the marketing business into a whole new entity is the least likely at all.

There is some speculation that Teradata only arrived at the decision recently. Behind this suggestion is the fact that the company only acquired data management platform FLXOne four weeks ago, begging the obvious question – why?

This article originally appeared on B&T’s sister site www.which-50.com

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