NCR's Teradata pricing 'illogical,' Gartner warns

Joining the likes of Microsoft and Oracle which are protecting revenues through "illogical pricing practices" NCR is the latest vendor demanding customers "overpay", prompting research firm Gartner to issue a warning to end users in Australia.

Gartner's senior hardware platforms analyst in Australia, Matthew Boon, said NCR Teradata customers, which make up hundreds of installations in the region particularly in financial services, are not being informed of price hikes because NCR is unwilling to publish list prices on its hardware.

The warning specifically relates to a new generation of NCR's massively parallel WorldMark servers that were introduced in May.

According to Gartner, the new two-processor nodes that are used in the latest WorldMark 5300 servers provide only 75 per cent of the performance available with the four-processor nodes used in the previous WorldMark 5255 servers. But NCR is insisting on selling the new nodes at the same price as the older nodes, which Gartner claims is "not in line" with standard industry practice.

"By comparison, recent generations of high-end Unix servers from Hewlett-Packard, IBM and Sun Microsystems effectively cut the hardware cost of processing power by increasing the processor speeds by up to 50 per cent with little, if any, increase in price," the advisory noted.

Boon said the vendor is trying to protect revenues by using practices usually applied in the storage industry.

"By bundling together databases, servers and storage, end users cannot see the cost of individual components, so price hikes can remain unseen; if users could see each component they would then go to their vendor and point out components they can buy cheaper elsewhere," Boon said.

"NCR is no longer aggressively marketing in the stand-alone server space; the aim is to offer bundled services offerings."

Vickie Farrell, a vice president in NCR's Teradata warehouse group, challenged Gartner's position. "What we sell is a complete solution that includes hardware and software," Farrell said. "The list price on the box is totally irrelevant. We don't sell off-the-shelf hardware. We sell uniquely configured systems that meet a customer's particular needs."

However, unlike other vendors that have clearly-published prices, NCR uses a bundled pricing model that gives customers little idea about how much they're really paying for their hardware, Gartner analyst Kevin Strange said.

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