Teradata Strategic Direction Summary November 17, 2016 Business Outcome Led, Technology Enabled OUR STRATEGY DELIVER BUSINESS VALUE BY BEING THE BEST ANALYTICAL PARTNER TO THE WORLD S LEADING FIRMS Our long-term strategic objectives: 1. Deliver business outcomes for our customers through analytics at scale 2. focused on companies with the largest analytic opportunities 3. powered by market-leading hybrid-cloud technology 4. enabled by world class talent passionate about customer success 5. yielding double digit revenue growth with strong expansion of EPS & FCF We are making key strategic shifts: Focus: Business outcome led, technology enabled o From selling technology to delivering business value through analytics o From IT transactions to a trusted advisor to business and IT Approach: Easy to buy, easy to grow o From on-premises deployment to portable hybrid cloud solutions o From complex, a la carte options to simplified, consistent offerings o From primarily CapEx options to OpEx alternatives Business model: Transitioning from perpetual to subscription-based licenses o New deployment options to increase customer lifetime value o Business model shift to more predictable and recurring revenue By leveraging the power of a unique, comprehensive data and analytics strategy, Teradata can help businesses achieve high impact outcomes. There are three key elements in our portfolio which support our strategy: Hybrid Cloud Solutions Teradata Everywhere o Best performance on-premises and in the cloud o Teradata Everywhere : Portable and scalable software o Managed Cloud solutions to make cloud easy Analytics Solutions and Architecture Consulting Analytic Business Consulting and Analytic Solutions o Solve the most critical use cases with actionable insights o Build analytics capabilities & embed best practices o Develop new use cases and IP, proving ROI fast Ecosystem Architecture Consulting o Bridge gaps between technology choices and business value o Design fit-for-purpose, analytical ecosystem, using Teradata, open source and commercial technology Page 1 of 6
EXPANDED MARKET OPPORTUNITY We have a large market opportunity 12 Drivers of market growth: We can access an expanded portion of the market: Address a broader set of business problems and capture more of the experiment / discovery portion of the market by adding Cloud and new deployment options Expand beyond the technology and data-warehousing portion of our business to address more business problems, with a focus on enabling business analytics through Analytic Business Consulting, Analytic Solutions, and Ecosystem Architecture Consulting We are focused on the top 500 companies with the greatest analytic potential: Approximately 50% 3 of the addressable market is in the top 500 companies, as defined by analytic potential 2 This portion of the market will have the highest consumption growth - greater data volumes, increased complexity, and more analytical opportunities This is where Teradata is most differentiated We plan to grow revenue within this segment by increasing share of wallet and penetrating new accounts 2 1 Source: IDC; 2016 revenue 2016-2021 CAGR 2 Relevant IT spend by company derived from 2015 CapIQ revenue data and Q2 2016 Gartner IT spend distribution by subcategory / by industry. Relevant IT spend includes data center (enterprise communication equipment, servers, storage, unified communications), IT services (implementation, HW maintenance and support, SW support) and infrastructure software. Excludes specific analytics opportunity where we do not play today. Source: Gartner, CapIQ Page 2 of 6
OUR SOLUTIONS MARKET LEADING HYBRID CLOUD SOFTWARE AND SOLUTIONS - Teradata Everywhere Teradata has the best performance on-premises and in the cloud Teradata is focused on delivering a Hybrid Cloud ecosystem: 90% of companies will deploy both on-premises and in the cloud by 2020 34 o No single system meets all customers needs Enterprise performance and service level agreements at scale across deployment options 5 Deployment agnostic Best price/performance at any pricing tier Teradata Managed Cloud will make cloud easy : 85% of companies are looking to buy as-a-service 4 The Teradata managed cloud offering will provide fully managed service with multiple options: o In Teradata data centers for the highest levels of performance and scale o In Public Cloud for proximity to customers data gravity o On-premises for customers who have their own private cloud 43 Source: Proprietary cloud survey of enterprise companies 54 Source: Proprietary cloud survey of enterprise companies Page 3 of 6
ANALYTICS SOLUTIONS & ARCHITECTURE CONSULTING: CREATING BUSINESS VALUE FOR OUR CUSTOMERS, DRIVING TERADATA CONSUMPTION Analytics Solutions and Architecture Consulting fulfill a critical gap for customers Experienced Analytic Business Consulting and proven/repeatable use cases help customers achieve business value Monetized analytics through packaged Business Analytic Solutions reduce time to value Our offering is enabled and differentiated by Ecosystem Architecture Consulting The only partner with fully comprehensive offerings to drive business value from analytics Why we will win: We have a deep understanding of how to apply analytics to specific business problems We provide proven, repeatable solution bundles that deliver analytics at scale, with rapid time to value We leverage combined Teradata and Think Big expertise to bring industry-leading data warehouse and open source capabilities GO-TO-MARKET STRATEGY GAIN SHARE AT COMPANIES WITH THE GREATEST ANALYTIC POTENTIAL The foundation of our go-to-market strategy is focusing on, and increasing resources for, the companies with the greatest analytical potential. We plan to do this by: Increasing market penetration and share of wallet in the top 500 companies globally by analytic potential Resourcing larger, dedicated account teams for existing and new accounts and expanding existing relationships with business buyers. These changes will include o Re-aligned compensation incentives which complement our consultative sales model, favor customer choice, and are neutral to the deployment type o Improved market intelligence guide sales to the right opportunities and best use cases o Centralized sales support and improved tools and processes to support our field teams o Account-based marketing tailored to individual opportunities Implementing our new sales approach to be repeatable, demonstrate value fast, and have a clear path to production Page 4 of 6
This new consultative methodology allows us to drive repeat business through natural growth and scaling. We are able to quickly identify and prove business value through analytic consulting, essentially a low-risk assessment that does not require a technology purchase. Once we have proven our capabilities, we are able to provide rapid return on investment with technology embedded in our solution. Finally, we deliver outcomes and results as-a-service, which often lead to purchases of technology and additional services OUR STRATEGY IS INTENDED TO DELIVER Long-term partnerships with our customers to achieve business value Increased use and consumption of Teradata Transition to subscription-based recurring revenue model New revenue streams from analytic business solutions Double-digit revenue growth and strong expansion of EPS and FCF Business Outcome Led, Technology Enabled Page 5 of 6
SAFE HARBOR STATEMENT: This Strategic Direction Summary includes forward-looking statements that are based on current expectations, beliefs and assumptions with respect to Teradata s future plans, prospects and intentions and are subject to a number of risks and uncertainties that could affect our future results and could cause actual results to differ materially from those expressed in such statements. A detailed discussion of these risks and uncertainties is contained in Teradata s U.S. Securities and Exchange Commission (SEC) filings, including the company s most recent reports on Form 10-K and Form 10-Q, copies of which are available online from the SEC or at: http://investor.teradata.com/financial-performance/sec-filings. Teradata undertakes no duty to update any statement in light of new information or future events. Page 6 of 6