NCR and its Teradata data warehousing division are to separate into two publicly traded companies to better focus on their respective business strategies.

Enterprise-grade data warehousing software vendor Teradata and its IT services, hardware and software parent NCR work in different markets and have different business models, said Bill Nuti, NCR's president and chief executive officer.

NCR's businesses include automated teller machines (ATMs) and retail point-of-sale (POS) technologies. The separation will allow for a sharper management focus and better employee incentive plans, Nuti said.

In 2005, Teradata had revenues of $1.5 billion (£771 million) and an operating income of $309 million (£158.8m), NCR said.

The division must be approved by NCR's board of directors. Under the plan, holders of NCR common stock will receive Teradata stock, although the distribution ratio has not been determined yet, NCR said.

Once the separation is completed within the coming six to nine months, Nuti will head up the new smaller NCR, while Mike Koehler, the current senior vice president of the Teradata division, will become president and CEO of Teradata.