The Times 100 : The Best Performing Companies in California : THE FAST TRACK : Databases Fuel Teradata’s Rise : Sales soar for the maker of supercomputers whose systems are helping workers to ‘turn data into real information.’
When you think of supercomputers, Cray may be the name that first springs to mind. And with good reason, because Seymour Cray invented the powerful, giant electronic species so popular in research laboratories and universities.
But there are other supercomputers in this world, machines that don’t help predict weather systems, build nuclear bombs or design airplanes. They track an airline’s frequent-flier program, a department store chain’s nationwide inventory or a bank’s customer transactions.
These are the type of machines built by Teradata Corp., an El Segundo company that jumped into the No. 10 spot on the 1989 Growth 100 list of the fastest-growing California companies. The company was created 10 years ago to build machines that track and cross-index massive quantities of data that can be retrieved from around the world.
In industry parlance, these are “database management” computers. But in the words of Kenneth Simonds, chairman and president of Teradata, they are systems that “turn data into real information that workers can use in their everyday jobs and (that) companies can use to further their strategies.”
Simonds’ assessment goes a long way toward explaining why the popularity of database systems is soaring while sales of supercomputers for scientific research are falling. It also helps explain why Teradata, an early entrant into this field, had revenues of $137 million in its 1989 fiscal year and is expected to report sales of as much as $220 million for the year ending June 30.
Although Teradata has been relatively unknown to the general public, its customers include some of America’s best-known corporations, such as K mart, Citicorp, American Airlines and AT&T.; The company has installed 240 systems, priced from $500,000 to $15 million, for 105 customers, most of them among the 200 largest U.S. corporations.
“We’re in the fastest-growing segment of the computer industry,” Simonds said. “Our type of machines can handle large databases better than the traditional mainframe computers.”
But the traditional mainframe manufacturers are catching on, too--on both sides of the Pacific.
Besides fending off competition from IBM’s top-of-the-line computers, Teradata is preparing for a stiff onslaught from such Japanese electronics giants as Toshiba, NEC, Mitsubishi and Hitachi, all of which are known to have database computer research projects under way.
Still, Simonds remains confident about Teradata’s prospects. “If we’re as right as we think we are about this market,” he said, “then there’s got to be an enormous number of companies that will get interested.”
FASTEST PROFIT GROWTH Companies ranked by two-year average annual growth in profits.
2-year avg. 1989 1987 annual profit income income Rank Company growth % ($ millions) ($ millions) 1 Security Pacific 586.8 740.600 15.70 2 Wells Fargo 244.0 601.100 50.80 3 Union Bank 86.1 138.926 40.13 4 Bergen Brunswig* 73.1 47.617 15.88 5 Cypress Semiconductor 63.3 30.714 11.52 6 Ross Stores* 60.8 29.840 11.54 7 Chips & Technologies* 60.0 33.045 12.91 8 20th Century Industries 58.3 91.026 36.34 9 Avery International* 57.8 86.500 34.73 10 Kaufman & Broad Home* ** 51.4 81.398 35.53 11 Oracle Systems* 50.9 97.680 42.88 12 Acuson 50.5 38.051 16.79 13 Autodesk* 50.3 46.378 20.54 14 Intel 49.2 391.021 175.54 15 First Capital Holdings 48.4 69.467 31.54 16 Apple Computer* 44.5 454.033 217.49 17 Imperial Bancorp 43.5 23.405 11.36 18 Mercury General 43.2 33.853 16.50 19 Wesco Financial 41.2 30.334 15.21 20 Caesars New Jersey* 41.1 35.968 18.07 21 Unocal 40.6 358.000 181.00 22 Neutrogena* 34.0 26.745 14.89 23 Walt Disney* 33.9 703.300 392.30 24 Adia Services* 33.7 20.302 11.35 25 MCA 33.5 244.760 137.25
* See exceptions, page 46. ** See company notes, page 45.
Source: MZ Group. Certain historical data is from Standard & Poor’s Compustat Inc.
