Big data analytics and marketing applications company, Teradata Corp. (TDC) recently acquired privately-held RainStor for an undisclosed amount.
Headquartered in San Francisco, CA, RainStor has offices in Gloucester, United Kingdom and New York. Founded in 2002, RainStor is a software company that provides a database designed to manage and analyze big data for large enterprises.
Per the acquisition deal, majority of RainStor employees will remain in San Francisco and Gloucester. RainStor will be integrated into Teradata's operations, supporting the big data analytics business.
We believe that the acquisition will bolster Teradata's enterprise-grade Hadoop solutions. It will also enable organizations to add archival data store capabilities for their entire enterprise. The new archival capability, in turn, will help customers to cost-effectively and efficiently address their data archiving requirements using Hadoop.
RainStor happens to be Teradata’s fourth big data-related acquisition in fiscal 2014, the other three being that of Revelytix, Hadapt and Think Big Analytics. This indicates that the company is currently beefing up its big-data related offerings.
We believe that new customer wins and strengthening relationships with large vendors will be the primary revenue drivers. Teradata will continue to benefit from international expansion, improved traction from sales force expansion, new products and alliances, market share gains and a growing database analytics market.
Moreover, the recent acquisitions of Think Big Analytics as well as the recent launch of services including the likes of Connection Analytics will bolster and diversify its offerings going forward. This, in turn, will drive top line growth.
However, increased investment in sales, a sluggish spending environment in the domestic market and increasing competition from EMC Corp. (EMC), NetApp (NTAP) and Nimble Storage (NMBL) are resulting in continued pricing pressure that will likely limit margin expansion in the rest of 2014.
Moreover, Teradata is plagued by the problem of supplier concentration as majority of the assembly and procurement is done by Flextronics. Thus, any disruption at Flextronics will jeopardize Taradata’s profitability.
Currently, Teradata has a Zacks Rank #3 (Hold).
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