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Segment and Other Supplemental Information
 9 Months Ended
Sep. 30, 2015
Segment Reporting [Abstract]  
Segment and Other Supplemental Information
Segment and Other Supplemental Information
Effective January 1, 2015, Teradata implemented an organizational change in which Teradata now manages its business in two divisions, which are also the Company’s operating segments: (1) Data and Analytics, and (2) Marketing Applications. This change will enable each division to be more sharply focused in rapidly addressing the dynamics of each market, and in bringing the best solutions to our customers. For purposes of discussing results by segment, management excludes the impact of certain items, consistent with the manner by which management evaluates the performance of each segment. This format is useful to investors because it allows analysis and comparability of operating trends. It also includes the same information that is used by Teradata management to make decisions regarding the segments and to assess financial performance. The chief operating decision maker evaluates the performance of the segments based on revenue and multiple profit measures, including segment gross margin. For management reporting purposes assets are not allocated to the segments. Prior period segment information has been reclassified to conform to the current period presentation.
The following table presents segment revenue and segment gross margin for the Company:
 
Three Months Ended
September 30,
 
Nine Months Ended 
 September 30,
In millions
2015
 
2014
 
2015
 
2014
Segment revenue
 
 
 
 
 
 
 
Data and Analytics
$
557

 
$
614

 
$
1,668

 
$
1,814

Marketing Applications
49

 
53

 
143

 
157

Total revenue
606

 
667

 
1,811

 
1,971

Segment gross margin
 
 
 
 
 
 
 
Data and Analytics
296

 
334

 
883

 
1,011

Marketing Applications
20

 
25

 
58

 
72

Total segment gross margin
316

 
359

 
941

 
1,083

Stock-based compensation expense
(3
)
 
(2
)
 
(10
)
 
(8
)
Amortization of acquisition-related intangible assets
(4
)
 
(6
)
 
(15
)
 
(16
)
Acquisition, integration and reorganization-related costs
(2
)
 
(1
)
 
(5
)
 
(5
)
Total gross margin
307

 
350

 
911

 
1,054

Selling, general and administrative expenses
179

 
181

 
553

 
557

Research and development costs
51

 
46

 
173

 
152

Impairment of goodwill
—

 
—

 
340

 
—

Income (loss) from operations
$
77

 
$
123

 
$
(155
)
 
$
345



The following table presents revenue by product and services for the Company:
 
Three Months Ended
September 30,
 
Nine Months Ended 
 September 30,
In millions
2015
 
2014
 
2015
 
2014
Products (software and hardware)(1)
$
240

 
$
294

 
$
737

 
$
867

Consulting services
194

 
200

 
560

 
592

Maintenance services
172

 
173

 
514

 
512

Total services
366

 
373

 
1,074

 
1,104

Total revenue
$
606

 
$
667

 
$
1,811

 
$
1,971

 
(1) Our analytic database software and hardware products are often sold and delivered together in the form of a “node” of capacity as an integrated technology solution. Accordingly, it is impracticable to provide the breakdown of revenue from various types of software and hardware products.