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        Matt Aslett's Analyst Perspectives

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        Teradata Encourages AI and Analytics Experimentation

        Cloud computing has had an enormous impact on the analytics and data industry in recent decades, with the on-demand provisioning of computational resources providing new opportunities for enterprises to lower costs and increase efficiency. Two-thirds of participants in Ventana Research’s Data Lakes Dynamic Insights research are using a cloud-based environment as the primary data platform for analytics.  

        The rapid adoption of cloud-based analytics and data platforms has also posed a new and significant competitive threat to incumbent software providers. All providers have adapted toVentana_Research_DI_Data_Lake_Primary_Data_Platform_24 survive by making products available in the cloud as well as on-premises, but the most inventive have also adapted business strategies to thrive through the introduction of new cloud services — such as Teradata’s AI Unlimited — that are designed to embrace the disruptive impact of the cloud to attract new customers and drive innovation. 

        Teradata has been a prominent provider of analytics and data platform software for 45 years, during which it established itself as a trusted provider of analytic data software, hardware and strategic advice and consulting. The company’s customers include some of the world’s best-known brands in industries including financial services, transportation, retail, manufacturing, healthcare, utilities and government.  

        As I previously explained, recent years have been transitional for Teradata as its customers have increasingly embraced cloud-based consumption models. The company has evolved from perpetual to recurring revenue and predominantly on-premises deployment to cloud-based services.  

        The 2022 delivery of VantageCloud Lake, built on cloud-native architecture, was a significant milestone for Teradata, enabling users to access and analyze data in cloud object storage and independently scale the compute and storage layers for improved efficiency. The launch of VantageCloud Lake, combined with the rebranding of the company’s cloud analytics software as ClearScape Analytics, enabled Teradata to throw off some of the outdated associations of the company as primarily a provider of on-premises hardware-based data warehousing platforms.  

        The company generated revenue of $1.83 billion in its fiscal 2023, up 2% on the previous year. Annual recurring revenue accounted for $1.57 billion and was up 6%. Public cloud annual recurring revenue was $528 million, an increase of 48%, demonstrating the company’s opportunity to drive greater growth via cloud-based products. This is set to be extended with the recent launch of Teradata AI Unlimited, a serverless artificial intelligence and machine learning engine designed to facilitate further adoption of ClearScape Analytics and VantageCloud. 

        Teradata VantageCloud is a combined database and analytics product designed to deliver analytic data processing for enterprise business intelligence and AI projects. Two editions of VantageCloud are available. VantageCloud Enterprise is designed to support mission-critical enterprise workloads managed by IT and is available on-premises, in the cloud, or a hybrid architecture. VantageCloud Lake is positioned for ad hoc exploratory analytics use cases and departmental projects. Initially available only on Amazon Web Services, VantageCloud Lake was expanded to Microsoft Azure in mid-2023. Built on cloud-native architecture, VantageCloud Lake enables users to access and analyze data in cloud object storage, independently scaling the compute and storage layers for improved efficiency.  

        In addition to the company’s core analytic database functionality, both VantageCloud Enterprise and VantageCloud Lake provide distributed query and data fabric capabilities as well as the ClearScape Analytics suite of in-database analytics functions and AI model management and governance to enable organizations to scale AI/ML initiatives. VantageCloud’s data fabric functionality was boosted by the acquisition of data catalog provider Stemma in mid-2023, adding AI-enhanced semantic mapping, data search and exploration to help the company support data intelligence initiatives.  

        Teradata also recently introduced generative AI-based services in September 2023 to enhance productivity and increase data democratization with the private preview launch of ask.ai, providing a natural language interface for querying data in VantageCloud Lake as well as the ability to generate metadata and system configuration information. 

        In addition to adding generative AI capabilities to VantageCloud, Teradata has also taken steps to facilitate customers’ adoption of AI and generative AI through the launch of AI Unlimited, which provides a serverless, cloud-based offering for developing AI and ML applications. Initially available on Amazon Web Services and subsequently on Microsoft Azure, AI Unlimited is targeted at data engineers, data scientists and developers and is positioned to facilitate self-service experimentation. AI Unlimited users can access data in the Parquet, CSV or JSON file formats using a Jupyter Notebook, Microsoft Visual Studio Code or Microsoft Excel. It can make use of any models trained on Amazon SageMaker (on AWS) or Azure ML services as well as Microsoft Azure OpenAI Service (on Azure).  

        Providing on-demand access to the database as a serverless compute engine, AI Unlimited enables users to explore data and experiment with AI use cases in a non-production environment. As I previously explained, serverless databases have the potential to lower the learning curve for developing new data-driven applications but are best suited to development and test environments as well as lightweight applications and workloads with sporadic usage.  

        While AI Unlimited is not designed for production workloads, successful initiatives can be taken into production using VantageCloud. Nevertheless, we see increasing demand forVentana_Research_2024_Assertion_AnalyticsData_Exploration_Investment_40_S environments that facilitate experimentation with data science and AI initiatives. I assert that through 2027, more than three-quarters of enterprises will invest in greater experimentation and exploration, utilizing data science to identify new business challenges and opportunities. 

        Like VantageCloud Lake, AI Unlimited is positioned to drive adoption of Teradata for new customers and departmental projects, serving experimental and exploratory use cases that will lay the foundation for expanded adoption of VantageCloud and ClearScape Analytics. Teradata’s embrace of generative AI is relatively nascent, and we expect to hear more about both its use of and support for generative AI this year as well as further details related to its plans for the capabilities acquired with Stemma. In the meantime, I recommend that enterprises include VantageCloud and ClearScape Analytics in evaluations for analytic database platforms and in-database analytics, and also consider VantageCloud Lake and AI Unlimited for new innovation initiatives. 


        Matt Aslett


        Matt Aslett
        Director of Research, Analytics and Data

        Matt Aslett leads the software research and advisory for Analytics and Data at Ventana Research, now part of ISG, covering software that improves the utilization and value of information. His focus areas of expertise and market coverage include analytics, data intelligence, data operations, data platforms, and streaming and events.


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