Teradata and SAP Deepen Ties

Earlier this week, at its European Universe user conference in Istanbul, Turkey, Teradata announced a new partnership with SAP to run SAP's NetWeaver Business Warehouse (BW) data warehouse natively on Teradata's scalable database. Both companies say it will be easier for joint customers to integrate their BW and SAP BusinessObjects business intelligence (BI) systems with Teradata's scalable Active Data warehousing platform.

However, the real significance of this deal is that it gives SAP an appliance story to tell (and sell) against rivals Oracle and IBM, both of which have preconfigured hardware and software offerings for BI and data warehousing.

SAP BW customers will get more choice and scalability

On the surface, this partnership is aimed at simplifying integration issues for customers of both companies' products. However, running SAP NetWeaver BW on a Teradata database seems to be straightforward. So the question is to what extent SAP BusinessObjects' software will be more 'integrated' with Teradata to make this better and easier.

It seems the benefit for joint customers is to remove the need to maintain a restructured 'shadow copy' of Teradata data held on SAP. Instead only one data warehouse is in place. More significant is that it is a way to counter some of BW's issues around data volume, query scalability and sticky integration with non-SAP data. Hence the Teradata alliance will be warmly welcomed by BW customers, and could spur more and bigger BW installations in the future, as well as more SAP users starting to implement operational business intelligence solutions. That is down to the scalability, performance gains, mixed workload management and broader access to enterprise data that is realised by Teradata's Active Data Warehouse architecture.

SAP has always felt a bit uneasy with the leverage that Oracle and IBM have yielded in the BI/data warehousing arena with their respective database management systems — more so now that they own BI and analytics tools and applications as well. Yet Teradata, unlike Oracle and IBM databases, is designed exclusively for BI. Better still, the approximately 100 BW users that also had Teradata will no longer be restricted to Oracle, IBM and SQL Server platforms. These companies had previously had to make do with either no connections or customised integrations. However, with any migration to Teradata, cost is likely to come into play — Teradata is much more expensive than SQL Server.

This looks like an appliance play in the making, and against a common BI foe

This partnership is also a signal that SAP and Teradata are preparing to offer integrated hardware-software data warehousing appliances in the near future. It is a partnership scribed straight out of a Machiavellian book, directed at a common foe — namely Oracle. Remember Oracle has its Exadata appliance (in cohorts with HP) and is now considering new opportunities for developing hardware-software combinations as a result of its Sun Microsystems acquisition announced earlier this month. That has put some pressure on SAP to deliver a pre-configured hardware-software BI offering of its own. Teradata is, of course, the original 'uber-appliance' - in the sense that it makes database software which it often packages with its own server hardware.

There is also IBM (another Teradata rival) to consider. Historically, SAP and IBM might well be strategic partners, but those bonds will loosen. IBM has now acquired Cognos and is bundling that company's BI software with IBM software and hardware as alphabetised classes of InfoSphere Balanced Warehouses.

However, we do question how aggressive SAP will be on selling its customers to Teradata over other platforms. For one, IBM has always been SAP's closest database partner — and we believe it will continue to be so simply because DB2 is not Oracle! Moreover SAP's database platform neutrality has always been a unique competitive advantage for SAP BusinessObjects BI against some of its biggest BI rivals that own databases. However, pushing the Teradata platform also gives SAP an opportunity to earn revenues for itself on BI and data warehousing deals rather than for its biggest applications and BI rival — namely Oracle.

Source: Ovum