Teradata, NCR enter venture to develop a computer '100 times faster' than IBM's.

Teradata, NCR enter venture to develop a computer `100 times faster' than IBM's

Teradata Corp. of Los Angeles, a data-base computer manufacturer, last week signed an agreement with NCR Corp. of Dayton, Ohio to jointly develop a general purpose computer the companies believe can be 100 times faster and far more economical than the biggest IBM supercomputer currently on the market.

"It's technologically feasible," said analyst Donald J. Heeter of Minneapolis-based Wessels Arnold & Henderson. "If you look at the economics of the hardware and the performance of Teradata's system, if they can make that hardware into a general purpose computer, then they'll do it."

Both NCR and Teradata believe they can produce more cost-effective computers because they use smaller microchips (the brains of the computer) grouped together for power, instead of the larger, more expensive chips like the ones IBM uses. These smaller chips are the same ones used for small personal computers and are sold more competitively, much like commodities.

Teradata and NCR - formerly known as National Cash Register - also have compatible technologies: NCR specializes in gathering data and Teradata in handling it. If those specialties can be combined into one computer that divides those two tasks between their most efficient technologies, the data can be processed much faster, the companies say. This type of computing process, called parallel processing, is what distinguishes a commercial supercomputer from a regular mainframe, according to an IBM spokeswoman.

After a three-year project, to be conducted in a yet-undetermined location in Southern California and using 100 people from both companies, Teradata and NCR believe they can develop their supercomputer.

As part of the agreement, NCR will buy 1.4 million shares of newly issued Teradata stock for $36.8 million, or about 9.4 percent of Teradata stock, and will have the right to designate a member to the Teradata board.

Teradata currently has a market value of about $430 million, based on last week's stock close of $32 a share with 13.5 million shares outstanding. A year ago that value was less than $200 million. Sales of the company's database computer have grown from $3 million, when President and CEO Kenneth W. Simonds came on board (See Journal Profile on Simonds, page 28.) to $175 million for calendar 1989.

NCR Corp., which sells a broad range of computers including automated teller machines for banks, had 1989 revenues of $6 billion.

"It's a pretty good deal for Teradata," said analyst Heeter. "They've gotten a larger partner to help them develop their computer hardware."

NCR was not only impressed with Teradata's database computer, which can handle trillions of characters at a time, but with the Teradata computer's ability to connect to all types of computers. For example, a personal computer, a workstation and a mainframe can all connect to the Teradata database computer and use the same copy of its information.

"Teradata's. . .technology allows us to connect a large number of processors into one system, which is much bigger than anything in the marketplace today," said an NCR spokesman. "This allows a guy to buy in whenever he wants and grow it incrementally instead of buying [a large mainframe] all at once."

NCR's most powerful mainframe computer retails for about $5 million, while Teradata systems start at $500,000. IBM's top-of-the-line supercomputer ranges from $13 million to $14 million.