Steve McMillan: Yes. Thanks for the question. Look, I think from a cloud migration perspective, we never saw a slowdown from the Teradata platform. We have had tremendous success migrating Teradata customers to the cloud, and that has continued as we have strengthened our technology and strengthen the platform. What we see is the benefits of the Teradata platform that we can operate in a hybrid environment. So, we can actually ensure that customers do not want to put some of the data into the cloud, maybe for some governance reasons or regulatory requirements or performance-based characteristics. If you are a telco, you want to keep your network data on-prem, the Teradata platform enables them to deploy in a completely hybrid environment.
We operate some of the world’s most critical workloads and some of the largest data sets in the world. What our customers know and find is that the best way for them to modernize their data solution set to get the benefits out of these new AI and ML capabilities is to use the Teradata platform as their core technology platform for data and analytics, both on-prem and in the cloud. And so we know that we are the best in terms of enterprise scale and enterprise price performance, enabling our customers to actually get these AI models out of a proof of concept and enter production and deploy in the way that our customers want to deploy. So, they want to have a data lake or a data warehouse or a lake-house, these are all deployment options and data architectures that the Teradata platform supports.
It’s very differentiated from how our competitive – how our competitors address that marketplace and it uniquely positions us to execute from both a hybrid perspective and to help customers move 100% of the workload to the cloud with the Teradata platform. So, I am not concerned that there is going to be an increase in competitive pressure to move from the Teradata platform to some of these more niche cloud data and analytics providers that can perhaps address the complexity.
Operator: Thank you. The next question is from the line of Raimo Lenschow with Barclays. You may proceed.
Sheldon McMeans: Great. This is Sheldon McMeans on for Raimo. Thanks for taking our questions. You have previously discussed turning back on the new customer acquisition engine. I want to ask how these initiatives are going? How do you rate your performance in fiscal year ‘23? And does your fiscal year ‘24 guidance assume a greater contribution from new logos than last year, or are you still taking a rather conservative stance regarding new logo contribution?
Steve McMillan: Yes, we are happy with the progress that we are making from a new logo perspective. In Q4, we added more new logos than any other quarter. And as we went through 2023, we want that momentum to continue into 2024. As we have always said, these new logos tend to start very small and grow quickly. We are super excited about things like AI Unlimited that we had, which will start to get new users and new customers, utilizing Teradata capabilities in the marketplace, and that will be a great introduction into Teradata ecosystems for new logos across the world. So, yes, we don’t expect a huge dollar contribution from new logos as we move forward. However, we are happy with the progress that we are making from that new logo engine.
Operator: [Operator Instructions] The next question is from the line of Matt Hedberg with RBC Capital Markets. You may proceed.
Simran Biswal: Hi guys. This is Simran on for Matt Hedberg. Thanks for taking our questions. Just one for me. Can you talk about the 2024 pipeline coverage in dollars? And how does it look this year compared to last year? Thanks.
Steve McMillan: Yes. I think we don’t go into a lot of details about our pipeline coverage specifically. What I would say is that we are seeing the marketplace being super attractive, right. And our performance in the market and the cloud marketplace has been great. We grew at 48% in 2023, that was way ahead of the market growth rates. We are seeing strong interest in our platform. We are seeing that new logo engine starting to come online. So, I think as we look at the guidance that we have issued for 2024, we always issued that guidance based on a prudent approach and a realistic approach to execution.
Operator: Thank you. The next question is from the line of Howard Ma with Guggenheim Securities. You may proceed.
Howard Ma: Thank you. My question is also on the 2024 outlook. So, leading up into today’s earnings trend, I was under the strong impression that Teradata is an accelerating total ARR story driven by cloud, but with the 2024 outlook ranges, it’s unclear if that’s still the case. So, Steve and Claire, you have adequately explained the on-premise erosions. But putting that aside, can you just answer – and you kind of hit on this earlier, but can you answer if – are your customers – are they still executing on their cloud journeys on Teradata with as much as fervor as before? And if not, has competition picked back up, or is there anything else that we should – that should prevent you from accelerating total ARR growth in 2024?
Steve McMillan: Yes. I think from a customer perspective, we are still seeing great interest. You just look at the range of different wins that I highlighted in the prepared remarks. We are seeing a lot of interest to utilize our cloud platform and that being the vehicle of their modernization journey. As we look at how we assess our customer environments and whether strategically, they are going to be long-term customers, but we very much matured our customer success motion, so we understand what’s happening with those customers and the strategic plans that they have in place. And that’s given us the opportunity to ensure that we can serve them. We are not seeing really any change in the competitive environment. Some of the things, I think they are boosting demand for us and give us confidence in terms of our execution.
It’s a fairly unique approach that we have to having a platform that really supports an OpenAI approach, you can use multiple different types of language models. We are working with some of our on-prem customers in terms of deploying AI capabilities that they couldn’t potentially do with other providers. And we see a lot of different opportunities in terms of driving growth in terms of the overall business.
Operator: Thank you. The next question is from the line of Nehal Chokshi with Northland Capital Markets. You may proceed.
Nehal Chokshi: Yes. Thanks. I apologize in advance if these questions have been asked. But Steve, you mentioned that greater than 75% of cloud customers are now operating hybrid. Could you give us a sense as far as what percent was it a year ago?
Steve McMillan: Yes. I think if we look – as we look back, we have said it was 50% to 60%, and that’s a number we have quoted in the past, so in terms of customers that are operating in a hybrid environment. And clearly, now that we have got hundreds and hundreds of our customers and in the cloud with us, the major corporations in the world, we are seeing great interest and the hybrid capability that we have is clearly a unique differentiator in terms of working across and creating that query fabric across both cloud and on-prem environment. Thanks Nehal.
Operator: Thank you. There are no further questions in queue. I would like to turn the call back over to Steve McMillan for concluding remarks.
Steve McMillan: Thanks everyone for joining us today. As we look ahead, we are going to continue to innovate as the complete cloud analytics and data platform company for AI. We remain absolutely focused on delivering the harmonized data, trusted AI and faster innovations that empower our customers to make better, more confident decisions and improve their overall business performance. We really are excited about our future in this truly dynamic market. Thanks very much.
Operator: This concludes today’s conference call. You may now disconnect.
