All right. Let's get started. Welcome to day three. Great to see so many faces in the morning. I'm Pinjalim Bora, a mid-cap software analyst at JP Morgan. I'm delighted to have here Steve McMillan, CEO of Teradata. Steve, welcome to the conference. Thank you. Great to be here. Maybe we can start with a little bit of a introduction about yourself, maybe a little bit about Teradata as well for the folks in the room that don't know about it. Sure. I joined Teradata in June of 2020. Just reflecting back on that, the reason I joined Teradata, there's probably a couple of reasons. The data and analytics space, I think you've all seen that recently, is probably one of the most interesting spaces in the technology sector. I'd had like over 30 years in the technology sector running businesses. Being in the data analytics space really gives you a really interesting platform to work with. For those that don't know Teradata is a fairly iconic company in the IT space. We're a 40-year-old company. You could say that the company actually invented enterprise data warehousing. That really gave us a base of technology at the core of the company. The third thing is the customer base that Teradata has. Teradata serves all of the largest enterprises in the world. Being focused on that enterprise segment and having the relationships that Teradata had, really, those three things came together for me as being a unique opportunity to turn around and transform the company and put in a new strategy for the company. Teradata has been, you know, a very traditional IT organization when I joined. You know, the bulk of its revenues were based on-prem, there was a real opportunity to transform that company and put in a cloud strategy and a cloud vision. I think the board recruited me really to drive that cloud vision and creating a data and analytics platform for the cloud. That's really what drove us into that segment. Yeah, that's a great intro. I want to deep dive into the transformation that you're talking about. Before that, you know, Teradata, as you say, is a key player in data analytics and data warehousing. Maybe talk about some of the key trends that you're seeing in that space in general, just zooming out a bit? Yeah. I think what everybody's seeing is that data is a really great competitive weapon for organizations around the world. We see data being used in a lot of industry-specific use cases. Teradata has powered a lot of those use cases over the past 40 years. Whether it's supply chain optimization, which is now manifested in things like a green agenda for organizations. We work with companies like American Airlines. We run all of American Airlines' flight operations, as an example, in the cloud. They say that we help them with their green agenda in terms of reducing fuel emissions, reducing fuel burn. That data and analytics space is increasingly more important for organizations around the world to really respond to challenging times. In this macroeconomic environment, I think what you see is, if you think about the top three IT buying patterns orient around cybersecurity, cloud, and data and analytics. Teradata sits at the real intersection of data analytics and now the cloud. Utilizing those capabilities together, I think a lot of organizations around the world see that as the way that they can be relevant into the future. Indeed, a lot of the banks, JPMC being one of them, think about, you know, how to be the bank of the future. In order to be the bank of the future, they see the importance of leveraging the research and development dollars of the hyperscalers to actually deliver services because they can't... A single organization can't compete without leveraging the hyperscalers' capabilities. When we think about the data and analytics environment, and the marketplace, we think about how you converge the hyperscalers' capabilities, the capabilities of Teradata, really to serve our customers' direction and strategy of helping them move into the industry of the future. Yeah, interesting. Okay. Let's talk about just the transformation journey. You joined in 2020. You know, Teradata was on-premise, you know, 10 years ago, probably. It's more cloudy. Seems like the business model has changed about 80% recurring revenue now. Walk us through that transformation. Talk about kind of the challenges and the learnings that you've gone through. Yeah. I think I joined Teradata, the previous management team had actually executed a fairly major transition for a technology company, which is moving from a perpetual on-premise license model towards a recurring revenue model. They'd gone through a lot of that transition. If you look back, you know, over time, you see a very interesting financial profile for Teradata. Now that we have, you know, over 90% of our recurring revenues, and our technology-based revenues associated with recurring. It gives a very stable revenue base for the company as we move forward. What Teradata hadn't done to that point was really embraced a technology strategy and a market strategy of being cloud first. When I joined the company, I joined with that mission, and that, and that really starts with the technology and the product. Over the last three years, we've actually completely transformed every single component of the company. We started with product, and we made some significant investments in product. As I said, been in the IT industry for over 30 years, and, you know, I've been in companies that have declared that they're gonna have a cloud first strategy, but really nothing actually changed in terms of the execution and how the company was actually operating. We actually took a research and development budget, which was, at the time, about 70% focused on-prem and 30% in the cloud, and we actually inverted that over the course of two months with a new chief product officer that I brought into, that I've promoted into that position. When we inverted that envelope, it really acted as a catalyst for the company to get behind the cloud mission. If I look at where we were from a cloud re-recurring revenue perspective in June of 2020, you know, we have more than 7-fold increased that recurring revenue from a cloud perspective if you compare it to the earnings that we just announced recently. That entire increase in cloud ARR or recurring revenues from the cloud is based on a transformation of every single component of the company. We brought in a new chief product officer, a new chief revenue officer, and a new chief customer officer, a new chief marketing officer, to really help with that transformation. These individuals are experts in their fields in terms of driving transformational change and moving a company from, you know, a traditional technology base towards more of a cloud base. That's really been powering our overall transformation from a recurring revenue perspective to such an extent now that, you know, if you think about rough orders of magnitude, more than $370 million of cloud ARR, against a total ARR base of roughly $1.5 billion. We've still got a lot of on-prem business that we can leverage to continue to develop and grow our cloud business as we move forward. 30%-35% cloud ARR at this point. Yeah. It's a big change, 70%-30% kind of inverting that. You have talked about the product strategy a little bit. You launched what do you call it? The VantageCloud Lake recently. You're kind of capitalizing on the core parallel processing IP that Teradata already always had. Maybe talk about that evolution of the product strategy till now? Yeah. If Teradata born on-prem, we've got a number of technology moats which give us differentiation in the marketplace. Three of those patented capabilities that we have are Workload Management and query optimization, and a thing they call push down queries. What that enables us to do is develop a very efficient, effective performant solutions for our customers that our competition can't actually deliver to. We've taken those patented capabilities, and when we joined, we made a big bet in terms of our research and development budget back in 2020 by actually saying, "We're gonna re-architect our core, our fundamental processing engines that we have for the cloud." We started that program in June of 2020, and we actually announced at the end of August last year, the release of our new cloud-native architecture, which is what we call VantageCloud Lake. VantageCloud Lake essentially enables the Teradata platform in the cloud to deliver not just enterprise data warehousing, but a data lake, a data lakehouse, with built-in analytics capabilities that differentiate us from our competition. We give our customers the choice of being able to have pristine data in an enterprise data warehousing, but also combine that with all sorts of different data that may be in a data lake. This is where Teradata's product strategy is differentiated from the rest of the market from a Snowflake or a Databricks. We have a belief that you don't need to bring all of your data into one place. You should be able to utilize the data inside an enterprise no matter where it is inside your company. What that actually does is it unleashes the power of data for an organization, and it really resonates with our customers in terms of having that ethos. you know, if you think about a Snowflake's approach is much like Teradata's approach from, you know, 20 years ago, which is, you know, bring all your data and put it inside at one single place. What does that do? It means you have to replicate that data. You have to ensure, you know, data governance between different sources of data. We actually give an approach to data inside an organization which is very, very different. It was actually born from the fact that it probably won't surprise anybody in this room to learn we don't actually make that much money from reselling the compute and storage capabilities of the hyperscalers. That is, if you think about our recurring revenue, that portion of our recurring revenue is fairly low profitability and low margin. Where we actually make our money is in the usage and consumption of our software in the cloud, and we make incredibly high margins on that software and software usage. To promote that software usage, the best way to do that is to open up as much data as possible to the Teradata software. We have adopted an approach to be very open and connected in terms of our technology and the data that it can access in a customer's ecosystem, and that's really powering the growth. If I look at our net expansion rates in the cloud, you know, our net expansion rates are around 120%. 119% is at the last earnings call. You know, that is within, you know, some of the best-in-class SaaS companies in the world. As our cloud revenues, you know, start to grow, we said it over 35%, right, in terms of cloud ARR against total ARR just now. As that starts to grow and we start to expand our overall business utilizing the growth in the cloud, that will start to accelerate our growth as we move forward. Yeah. Your strategy is not to bring in the data, not to replicate. Yes. It's. Absolutely, you can do that if you want, but our strategy is really how do you open the platform to access as much data as possible no matter where it is. 'Cause we recognize the fact that, you know, our customers are using Salesforce, or our customers are using Workday, or their customers are using ServiceNow, or they may have data in AWS, and they may have data in Azure, and they may still have data on-prem, so how do you access and utilize all of that data together? That's a fairly unique approach in the marketplace just now. Because we are a multi-cloud capability from a technology perspective, you know, we can have our technology in each of those clouds and give our customers that capability. Yeah. you, before VantageCloud Lake, I think you had announced something called Vantage Enterprise- Yes -if I believe right. Talk to us about kind of the difference between- Yeah -the two, maybe is there a difference of use cases between the two as well? Our VantageCloud Enterprise was essentially, if you think about Teradata is was thought of as a hardware company for a long, long time. We are actually a software company and a software platform company. We're kinda miscategorized or misunderstood in the marketplace. Our VantageCloud Enterprise was essentially us abstracting our software from the hardware on-prem and using that software in the cloud. What that enabled our customers to do was to take some of the most complex mission-critical workloads that they were running on-prem and actually run that in the cloud. That's, again, major airlines around the world, major banks around the world are able to seamlessly take their workload from an on-premise solution and then run it in the cloud, and that's what VantageCloud Enterprise edition enables our customers to do. It's much more about pristine enterprise data warehousing and analytics at enterprise scale. Our VantageCloud Lake product can sit alongside our VantageCloud Enterprise and allow much more experimental or departmental workloads or use cases to be executed. There's a lot of interest just now in GenAI or large language models. You know, ChatGPT has kinda made that famous. But all of that kind of data and analytics that sit behind those can actually be executed in VantageCloud Lake to provide lots of different solutions and use cases for our customers. It's very complementary. Yes. Okay. Ultimately, we will actually run everything on our VantageCloud Lake architecture. By the end of this year, our VantageCloud Lake architecture will support all of the enterprise use cases and all of those departmental or experimental or advanced AI and ML use cases. That technology roadmap and plan that we put in place back in 2020 is really starting to come to fruition with VantageCloud Lake that we announced last August. Also, as we go through this year in our product roadmap, it's gonna accelerate that delivery and continue to accelerate our ability to take our existing customers to the cloud and bring new customers to Teradata in the cloud. Maybe talk about the adoption. You said you'd launch it in August of last year. I think the GA was beginning of this year? January. Right. It's not been too long, but what have you seen from customers? Is it a new logo story? Is there a migration story to it with VantageCloud Lake? I think VantageCloud Lake has really given our customers a point of view of how they can take their data strategy forward. From an existing customer perspective, it's given our existing customers some real confidence that, you know, there's an architecture that they see into the future that's gonna be able to support their growth and support their data and analytics use cases into the future. To your point, I think the other thing it provides is an ability to win new logos and smaller workloads. We are always gonna be focused on the enterprise market. The Global 10,000, that's really the sweet spot for Teradata because we really drive enterprise performance. You can see that in the shape of the deals that we do. You know, we just referenced a nine-figure deal that we did in Q1 of this year. Back in Q3 of last year, we actually did the largest AWS Marketplace deal by an ISV, which is super powerful if you think about that. A bigger deal than SAP or any of the other ISVs in the world. Teradata actually did that deal with Amazon. We're super excited about the focus on the enterprise, the large deals that we can execute, especially in this market. What we see in this market, because we're not exposed to some of the challenges that some of the SMB customers are having just now, the enterprises still want to utilize data. They want to utilize cloud-based technologies to deliver into the future. That gives us a lot of stability around our opportunity base and stability around our revenue base as we move forward. Yeah. Let's talk a little bit about competition. It is a, it is an interesting field. There are a lot of new players. There are a lot of strong players. Snowflake, you have all the hyperscalers, their own things. Talk about how do you see that competitive landscape? Why do you win when you win? Why do you lose? You know, talk about. Yep all that dynamic. For sure. I think we could probably segment the competition in the data and analytics marketplace into three. There's kind of the traditional providers, you know, the legacy providers like IBM and Oracle. There's the hyperscalers, as you mentioned, there's the kind of born in the cloud, Snowflake or Databricks. We compete against 3 based on our enterprise scale and performance and our price performance. Against all three categories there, we can beat them from a price performance perspective, an enterprise performance perspective, and an enterprise scale. Just an example of that, sometimes, as customers look to utilize some of these technologies, either from born in the cloud or the hyperscalers, they find that those technologies just can't operate at the scale that their organization and their business needs. We had an airline in Europe, as an example, that was looking at one of the hyperscaler capabilities to move their platform to that hyperscaler. What they found was they just didn't have the capability to execute. Yeah. We have unique differentiation against each of the three categories. To compete against the traditional providers, if you look at Oracle's strategy, for example, Oracle's strategy really orients around OCI and Oracle Cloud. We are a multi-cloud capability, we offer our capability in AWS, Azure, and Google. That's very compelling for customers and enterprises around the world as they want to develop a multi-cloud strategy. Competing against the hyperscalers, again, having that multi-cloud capability is a very compelling reason to utilize the Teradata platform. Not only that, being able to, for some of the largest customers in the world, also have an on-prem component of that, capability is a real differentiator in terms of competing with, the hyperscalers. Actually we see that, we just announced a large partnership with Dell, actually, so that our Teradata software can run on Dell's converged infrastructure. Actually, Dell's sales force is now incented to sell, Teradata software on top of the Dell converged infrastructure. That's a unique proposition that we've developed with Dell that will open up that kinda on-prem segment of the marketplace. Competing with, the born in the cloud, the cloud natives. I think what organizations are finding is that the cost of operating some of these cloud native capabilities is incredibly expensive because their answer to complex challenges is essentially to scale up compute. 'Cause they were born in the cloud, they're used to having infinite, in inverted commas, infinite resources available to them. If a Snowflake or a Databricks has to solve a really complex query or analytical use case, they'll spin up lots of compute to do that, and it starts to increase costs fairly significantly. Our approach to financial governance and query optimization and workload management enables customers to utilize cloud-based technologies in a very effective and efficient way, and that's really differentiated from the competition. As we look across those three segments of competition, you know, Teradata is really well placed to win business. I think a lot of our customers are moving to the cloud with us because they see those capabilities manifest now in terms of the technology that we've got and the acceleration that we see in terms of our cloud ARR growth. If you look in Q1, we grew our cloud ARR 89% from a year-over-year perspective, and that's a testimony, I think, to our technology strategy and the execution of the company. Yeah. The multi-cloud, the hybrid cloud, all those points make sense. The born in the cloud query part. Have you done any kind of studies in terms of, you know, similar workloads running in Snowflake or Redshift? Yep. Teradata. Have you done any kind of? Yeah. There's we've actually had third-party analysis. There's a company called BEZNext that did some third-party analysis in terms of cost per query. When you compare it to Teradata workload execution and how that compares to Snowflake, how that compares to Redshift. We've actually got that material available. If you look actually at our last analyst and investor meeting, we have one slide in there that kinda highlights that data, and it shows an order of magnitude difference from a cost per query perspective. The other thing I would point out in terms of external validation of the strategy is, you know, from a Gartner perspective, Teradata is in the leader quadrant from a cloud database management system. More importantly, Gartner also looked at four use cases where they compared Teradata with all of the classes of competition that we just spoke to. Teradata was declared the first in terms of capability in enterprise data warehousing and logical data warehousing and analytical use cases, and also operational databases. That Gartner, that Gartner report really gives us solid foundation in terms of, and solid ratification of our technology strategy. Right. Let's talk about a little bit about macro. You know, talk about what are you seeing in the macro environment, how is it impacting Teradata, and more recently when you're talking to customers, what is the sense of the current kind of business environment, and, you know? Teradata, we are an at-scale organization. We have 7,000 people across the world, we operate across all industries and have in-depth knowledge of industries and industry use cases. Again, we're focused on the enterprise segment across the world. Having that variation of industry and variation of geography actually again gives us some stability to our performance and to our overall growth trajectory. As one industry might not be performing well, we tend to find another industry is. As one geography might have a challenge, we find another geography makes up for that. Having that dispersion of business from a global perspective gives us some security in terms of our overall numbers and solidity in terms of our overall numbers. Because we're focused on the enterprise segment, we actually haven't seen much impact in terms of the macroeconomic environment, just now with higher interest rates. A lot of the organizations that we interact with aren't short of capital and capital investment. Indeed, those enterprise-sized organizations, they want to use data and analytics to respond to the challenges that they see inside their organization. I think that's one of the reasons why, you know, data analytics as a category for a CIO has been maintained as one of the most important areas for investment for organizations. The macroeconomic environment, the reason that we were confident in terms of reaffirming our guide for the full year was because we actually continued to see strength in our pipeline and strength in terms of execution as we go through the year. You know, if I think about, you know, how we performed in this most recent quarter, you know, seeing that sequential growth from Q4 to Q1, from our total recurring revenues and our cloud recurring revenues, and how we see that going through the year. You know, we actually, we were actually asked, "Is that an inflection point for the company?" Right? As we're starting to grow those revenues now. I wouldn't use the term inflection point. I think this is just a demonstration and the plan actually in terms of how we set out the guidance for 2023, but also our long-term guidance to 2025, and having over $1 billion of recurring revenues in the cloud by 2025. We actually see the opportunity to continue every quarter to consistently deliver. Q4 is traditionally our strongest quarter as we go through 2023. It really sets us up for that long-term guidance as we get to 2025. Yeah. Understood. I wanna see if anybody in the audience have any questions. We have a few hands up. Great. Thank you. It's quite the transformation. You talked about making data easily available, liberating the data, it seems like sort of the holy grail in a lot of ways. The question I have is: should that mean at some point you will start winning new logos? Yeah, we are actually, Part of the strategy change that I put in when I joined the company really was, we had stopped a new logo. The previous management team had stopped new logo acquisition. They had essentially a theory that they could leverage the existing customer base and growth in data, and the customers that they had in terms of the largest companies in the world, would power growth. We certainly see that as an important growth aspect for the company as we move forward. Our new approach and our technology approach starts to enable new logos. We've started to see the traction in new logos. What I would say for 2023 in a macroeconomic environment, it's difficult for all organizations and IT organizations to win new logos unless you're doing a platform consolidation, a cost takeout consolidation. I'm pretty happy with the progress that we've been making from a new logo perspective. I'd use de minimis in our 2023 guidance, but it becomes increasingly important as we move to 2025, but more importantly, as we move beyond 2025. The goals that we set out for 2025 are achievable even with a very small amount of new logo. We see that as a real upside as we move forward. Can I just follow up on that? You also talk about being more cost-efficient versus the competition. Therefore, how do you drive a net retention ratio, you know, above 15%? How do you drive same-store growth if you're more efficient? Yeah. Our growth and our expansion rates are actually driven by the use cases. You know, GenAI is a great example of something that's getting a lot of traction in the marketplace. We see GenAI as a real tailwind for us from an execution perspective as it opens up new use cases. I'll give an example. We have a retailer in Israel that's using a large language model to really transform their retailer experience. The shopping cart actually talks to the consumer as they're walking around the store. Teradata actually powers that large language model for that company. All the feature engineering is done in Teradata Vantage. They actually use Amazon SageMaker to train the model, and then the scoring of the model to actually give the recommendation is again done inside Teradata. It gives a good use case that integrates together the capabilities of Teradata, the capabilities of the hyperscaler, utilizing a GenAI large language model for real business impact. The growth of use cases, the growth of data that's being accessed is what drives our expansion rate. I would like to have a dialogue with my shopping cart. Go ahead. Yeah. Can you talk about maybe the unstructured data and whether you guys are able to run queries for unstructured data versus relational data and how that's, you know, evolved over time and whether you're under indexed or on par with industry? Maybe just talk about that. Yeah. I'll give another example. Volkswagen in Europe actually use real-time streaming data from shop floor robots. It streams data into AWS S3 storage, Native Object Store on AWS. We actually have Teradata query engines and analytics engines sitting next to that data, processing that data in real time, to actually make a recommendation to the shop floor robot on whether it has to redo the weld on that manufacturing line. Utilizing real-time streaming is just one example of, you know, different kinds of datasets that the Teradata platform is opening up to over time. We have other examples of, we have a retailer, a restaurant chain actually, that utilizes Teradata to process video data, to actually make recommendations about how the kitchen should operate. Lots of different examples of different types of data, and that's one of the things that we've done from the company's perspective. When I talk about having a data platform, what I mean from a platform perspective is that we open up the Teradata engines for query processing and analytics to as much data as possible. We use partnerships with organizations like Starburst to access lots of different data sources. We have lots of built-in integrations in the platform to access different data sources. Again, it goes to the whole strategy of to drive expansion into the future, opening up as much data as possible, structured and unstructured, will be really powerful as we move forward. I think we're out of time. 20 seconds is probably not enough for me to ask a question, you to answer. Thank you so much for the insights. Thank you. Thanks. Thank you very much.