Analysis: Behind the SAP-Teradata Accord

Last week's Teradata-SAP partnership will benefit joint customers and possibly create additional sales opportunities for Teradata.

The accord announced last week between Teradata Corp. and SAP AG will benefit joint customers even as it gives users in SAP-only environments still another means of accelerating SAP analytics -- in this case, officials claim, by deploying NetWeaver BI (nee SAP Business Information Warehouse, or BW) on top of an entry-level appliance offering from Teradata.

The partnership is very much a statement of intention, however. Delivery -- in the form of improved integration between NetWeaver BI and Teradata Warehouse -- isn't expected until sometime next year. It's one of a trio of high-profile deals for Teradata. In February of last year, the DW giant agreed to a technology collaboration and marketing accord with SAS Institute Inc., followed, in March of 2008, by a worldwide reseller partnership with Oracle Corp.

Elsewhere, SAP officials say they're open to other partnering options, such as (notional) pairings with data warehouse (DW) appliance vendors.

Today, NetWeaver BW can be implemented (i.e., "layered") as an extensible data model on top of DBMS platforms from IBM, Microsoft, and Oracle, among others. SAP does not offer similar support for the Teradata Warehouse DBMS.

The upshot, experts say, is that getting data out of SAP and into Teradata (or vice versa) isn't a straightforward process. As a result, customers typically employ any of several somewhat kludgey approaches to reconcile the two worlds. "The way [customers] did it was to use [an] open hub and a built-in ETL process from [SAP] BW to export and import data from Teradata. We had a number of customers who were actually doing that, even though it was a little harder because you had to maintain the ETL and so on," explains Scott Gnau, vice-president and general manager for research and development with Teradata. "In some cases, [customers] would do an extract from pieces of BW and do some additional processing and data enrichment in Teradata, and sometimes publish that back into BW."

Last week's accord changes that, says Philip Russom, senior research director with TDWI.

"One of the many things Teradata and SAP have committed to doing is to 'port' BW to be easily deployed over the Teradata Warehouse DBMS," Russom explains, adding that the deal could be a boon for joint customers. "[T]he strength of BW is its analytic and report modeling that complements SAP's so-called 'standard business content' -- the massive data model underlying SAP ERP. BW enables you to report on and analyze data straight from the operational system.

"The weaknesses of BW are that it has a reputation for slow query response, limited data volume scalability, and limited visibility into non-SAP enterprise data. The new SAP/Teradata combination has great potential for curing these weaknesses."

In terms of implied closeness of collaboration, the arrangement is dissimilar to Teradata's worldwide reseller relationship with Oracle, whereby it resells Oracle Business Intelligence Enterprise Edition Plus and Oracle's Business Intelligence Analytic Applications on top of its Teradata DW platforms. The Teradata-SAP accord promises technological collaboration between both companies.

In this respect, the accord seems closer to Teradata's relationship with SAS; both Teradata and SAP, like Teradata and SAS, have pledged deep technological collaboration -- to the extent that the two companies say they've tasked engineers to jointly work on the effort. Moreover, both Teradata and SAP (like Teradata and SAS) hint that there's more to come.

"There are three to four things that we're looking at seriously that ought to make the SAP and Teradata solution offering even more attractive to [joint] customers," says Miles Stephenson, vice president for horizontal solutions and alliances for Teradata.

Stephenson agrees that the SAP partnership is similar to Teradata's accord with SAS but stops short of suggesting that SAP analytics -- like SAS analytics --could one day be embedded in Teradata Warehouse. "They're both … kind of directed in different areas. They're similar in that we've got alignment at the highest levels of the companies, and [in both cases] we have these R&D relationships, so both [the SAS and the SAP partnerships are] putting skin in the game when it comes to money and … [R&D] effort," he says.

Stephenson demurs when asked specifically about the possibility of embedding SAP Business Objects analytics inside Teradata Warehouse, a la SAS.

"For the last six months, we've been focusing on this. We've really been focusing hard on getting the BW port worked out [and] finalized, so while we're exploring other opportunities [of collaboration], we can't comment [on those] yet."

Franz Aman, vice-president of intelligence platform product marketing with SAP, likewise promises that there's more to come from both SAP and Teradata -- but (likewise) demurs when pressed for specific details. "Certainly, customers can benefit from the underlying Teradata database in terms of fault tolerance and scalability -- especially around data integration," he comments.

As things now stand, Aman avers, the Teradata-SAP accord will deliver indisputable benefits for joint customers in high-end environments.

"There's a lot of streaming and optimizing needed for the sheer amounts of data that are being shuffled in and consumed [by BW]. We can't just provide BW on top of general purpose databases like Oracle and DB2; we need to go beyond that and offer BW on top of finely-tuned databases that are meant to be real-time, meant to be highly scalable. Certainly, Teradata fits that bill."

Aman also rejects the suggestion that SAP's partnership with Teradata undercuts its value proposition with the SAP BI Accelerator (BIA), a hardware appliance that it markets as a query accelerator for NetWeaver BI.

"Once you get into the hundreds of terabytes or even petabytes, you need something like a Teradata," he indicates, arguing that companies that already have Teradata would prefer to leverage their existing expertise instead of incurring the additional cost (of both hardware and training) for the BIA.

"We just looked at the list of our Top 100 accounts. Almost half of them do have Teradata capabilities today. Skill sets around enterprise data warehousing are very rare. Once you have that skill set, you want to leverage that. Wherever [our customers] have these craftspeople, they want to leverage them as widely as possible."

A Question of Timing

Industry veteran Mike Schiff, a principal with data warehousing consultancy MAS Strategies, concurs.

"In theory, the BI Accelerator can be used with any database -- it'll just enhance whatever's under there. It's a hardware assist: if you buy the [BI] Accelerator, you don't have to pre-build aggregates for whatever database you're using. That's one of Teradata's biggest claims to fame -- [i.e.] that you don't need to build aggregates. So in a Teradata environment, the [BI] Accelerator might provide an assist, but it's not something you need to have," he indicates.

In other words, Schiff acknowledges, the BIA would probably be superfluous in joint Teradata-SAP environments. "Certainly, with Teradata you might have less of a need for it [the BIA] than you might with some of the other data structures, although that isn't to say you couldn't use both."

Although he's willing to concede the case for BIA and Teradata coexistence (if not complementarity), Schiff does raise question about the timing of the Teradata-SAP accord. It's an announcement about company intentions, after all. At this point, neither partner has delivered anything in the way of concrete interoperability; moreover, NetWeaver BI won't support out-of-the-box integration with Teradata Warehouse until SAP delivers NetWeaver 7.2 sometime next year -- so it could've been announced at any time, Schiff points out.

Why did Teradata and SAP choose last week's Teradata Universe event in Istanbul -- and not SAP's upcoming SAPPHIRE user conference in Orlando -- to trumpet their accord? "It may mean that it's … important to Teradata and that they needed to get something out there," he suggests.

SAP and Teradata officials have a simple explanation for timing. They told Enterprise Strategies that the companies have "pretty big news" coming out at SAPPHIRE and didn't want the partnership news getting overshadowed.

Aman indicates that -- while SAP and Teradata clearly have more up their sleeves in terms of collaboration and interoperability -- his company hasn't ruled out the possibility of partnering with other specialty vendors, too.

"There's a lot of things that are being discussed. We want to see what kind of customer adoption and traction we get and want to see that this is bearing fruit and turning into actual customer traction. Does this mean that we could partner with a data warehouse appliance [vendor]? I'm not excluding [a partnership like] that, but it has to make sense," he comments.

What about a partnership with Hewlett-Packard Co. (HP), which -- with the launch of its Neoview appliance almost three years ago (and the subsequent acquisition of the former Knightsbridge Solutions) -- is making a play for Teradata's sweet spot? HP has long had a special relationship with Oracle Corp., but -- with the latter's recent acquisition of Unix giant Sun Microsystems Inc. -- the HP-Oracle relationship got at least a bit more complicated.

Aman, for his part, demurs: "That's good input. Thanks for that."

Expanding the User Base

Most industry watchers see the partnership as a big win for joint customers. Teradata officials, on the other hand, talk up the possibility of new customer converts -- drawn (in this case) by the promise of running NetWeaver BI on top of Teradata's putatively affordable Extreme Data appliance, which clocks in at a claimed $16,500 per TB.

For customers in extremely large SAP environments, the ability to run NetWeaver BI on top of Teradata could prove enticing, Gnau argues. "[SAP] BW deployments are getting larger and larger. Customers want more data, they want more historical data. They want to be able to do more analytics, more data volume exploration, and I think we'll be able to do some pretty incredible things there for them," he says.

Stephenson, for his part, is careful to stress that -- even in such cases -- Teradata probably won't be cross-selling appliances at the expense of SAP BIA.

"These [Teradata appliances and BIA] address different requirements. With Teradata, you're addressing data volumes, you're addressing service levels, you're addressing problems of scale," he indicates. The point, Stephenson asserts, is that customers who buy into Teradata at the appliance level can continue to scale up as their data volumes increase.

"It doesn't matter whether I run [NetWeaver BI] on the 5500, the 2500, or one of our SMP [appliances]: anything I do with any of my platforms is easily transportable across our platform family," he points out.

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