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TowerGroup responds to NCR's announcement to split
January 8, 2007
BOSTON - Kathleen Khirallah, research director of TowerGroup's Retail Banking practice, says NCR Corp.'s plan to separate its Teradata business into an independent publicly traded company is positive, given the significant differences in the two organizations' business models, sales efforts and corporate branding.
"Creating an independent entity for Teradata will allow managers in both companies a tighter degree of business focus," she said. "Executives in the two new organizations will no longer need to worry about business issues in the other organization."
She added that the proposed split will likely have little impact on the financial institutions that use Teradata and NCR's ATMs and other self-service equipment.
"The two business units have historically sold their products and services into different parts of the institution, and contract leverage was limited," Khirallah said. "Teradata has experienced healthy growth in the past few years in terms of both revenue and operating income, providing NCR with a unique opportunity to spin off a strong, growing player in the software market at a favorable time."
Jerry Silva, research director of TowerGroup's Delivery Channels practice, says the decreased size of each unit "should allow them to respond much quicker to market demands - something that will greatly benefit the self-service part of the company in today's world."
"The separation will also allow for more diversification in the self-service company with less ensuing bureaucracy," Silva said. "This will help the company develop a more tactical approach to developing software solutions needed by the self-service industry."
Banking Executive SummaryNorth AmericaPublic CompaniesManufacturersKiosks/Self-ServiceOtherRemote ManagementBank / Credit UnionSoftware
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