Teradata Corp. (TDC">TDC) recently announced that one of its subsidiaries Aprimo has entered into a partnership with Chinese-based Frensworkz. Aprimo, a leading provider of cloud-based integrated marketing software, was acquired by Teradata for $525.0 million in cash last year.

Frensworkz has strong business relationships with both cloud and on-premise customer relationship management providers including Salesforce.com Inc. ( CRM - Analyst Report ) and Microsoft Corp. (MSFT">MSFT) in China, Taiwan and Hong Kong. Moreover, the company serves clients from diversified verticals such as high tech, retail and financial services & banking industries in China.

Under the terms of the partnership, Aprimo’s flagship product Aprimo Marketing Studio on Demand will be sold through Frensworkz in China. Teradata expects to benefit from the strong presence of Frensworkz in China. The company is already offering the complete line of Aprimo software in China and the alliance is further expected to strengthen its position in the Chinese market going forward.

Teradata is expected to benefit from Aprimo's expertise in the Cloud and Software-as-a-Service (SaaS) segments. Aprimo is expected to help the company compete against larger rivals such as IBM Corp. ( IBM - Analyst Report ) and Oracle Corp. (ORCL">ORCL) in cloud-based offerings over the long term.

We believe that Teradata will continue to pursue new partnerships in the emerging markets to drive Aprimo’s growth. This will not only help the company to counter local competition, but given the local knowledge of the partner, it will also help Teradata to counter competition from the more established global peers in the region.

Recommendation

We believe that new customer wins and strengthening relationships with large vendors will be the primary drivers of revenues and profits over the long term. We expect long-term growth to come from new strategic partnerships.

In the first three quarters of 2011, the company had added 18 independent software vendors as partners, including companies such as analytics application software provider Appfluent Technology, Inc., analytic software developer Clickfox and business intelligence (BI) software provider Arcplan.

We believe that Teradata will continue to benefit from its international expansion, improved traction from sales force expansion, new products and alliances, market share gains and a growing database analytics market. However, increased investment in sales, higher R&D expenses and an increase in the number of competing products in the market are resulting in continued pricing pressure that will likely limit margin expansion going forward.

We maintain our Neutral recommendation over the long term (6-12 months). Currently, Teradata has a Zacks #3 Rank, which implies a Hold rating in the short term.