Cloudera, focused on Big Data and analytics, held its annual analyst meeting on March 10-11, 2015, in San Francisco. The company, the largest provider of Hadoop-related software worldwide has chosen to focus its energies on highlighting the business side of analytics, as it seeks rapid growth and profits from its expanding market presence.
Rather than dive into the details of such Hadoop projects, Cloudera executives focused on their overall portfolio, and the offerings of 1,400 partners worldwide, a combination they said brings new levels of business value to its customers.
This focus on the business side of analytics comes as the company, founded in 2008, reaches its seventh birthday.
Despite being flush with cash, due in part due to the $740M investment by Intel, Cloudera is not yet profitable, but told analysts that it has achieved annual revenue in excess of $100M. This is more than two times the revenue of its main competitor Hortonworks, a publicly listed major Hadoop distributor, which had its IPO in December, 2014.
Competition in the Marketplace
The tension between Cloudera and Hortonworks for marketshare and mind-share is palpable, along with competition from MapR and Pivotal, an EMC spin-off. All of these companies provide Hadoop distributions – but the competition between Cloudera and Hortonworks can be seen in their relationships with OEMs, ISVs, and cloud solutions providers. Both are busy building ecosystems that will take them to the next level, as growing software companies.
Cloudera is adding headcount quickly, but it can do so with its deep supply of cash. Intel’s investment in Cloudera gives it an 18% share of the privately held company, valuing Cloudera at $4.1 Billion.
We should note that when Cloudera competitor Hortonworks went public in December, 2014, its market cap was $1 billion, reflecting the market’s outlook for rapid growth in Big Data Analytics worldwide. Hortonworks also leveraged its relationship with another industry giant – Microsoft, which ported the Hortonworks Data Platform (HDP) to run on Microsoft Windows.
Clearly, this segment shows much promise in the marketplace—and in the way the market values its products.
We believe it would be reasonable to expect that Cloudera will also plan to have an IPO at some future date.
Focusing on Business Value
Making that next step into the enterprise world is key to Cloudera’s future in Big Data/Analytics. We believe that’s why Cloudera is so focused on its value proposition. It must make clear to line-of-business (LOB) leaders why they should invest in Cloudera’s software technology and support.
Cloudera is focused on the business value of Hadoop and Big Data. Up to now, the dialog was overly technical, focused on projects such as Hive, Sqoop and Pig,– yet did little to attract business leaders and business managers.
But these Hadoop-style names are widely used in technical circles—within the open-source application developer groups that are building analytics engines based on code from the Apache Software Foundation, an open-source software organization.
While Cloudera continues to refine the solutions it optimizes for the use of data scientists, business analysts, line-of-business groups, and IT organizations, the focus on business value highlights a change in the way Cloudera positions itself.
By focusing on business value, Cloudera is taking an approach similar to that of VMware, which de-emphasized the hypervisor, in favor of higher value software and services. VMware, a multi-billion-dollar software firm first looked “up” the technology stack, at management of virtualized environments – and then to services to help customers adopt VMware’s portfolio of technology for business solutions. This approach helped VMware grow its revenues and profits more quickly – avoiding competition based on hypervisors alone.
Technical change is important: The release of Hadoop 2.0 last year, along with the rapid growth of Big Data, are driving end-user demand for analytics to find “patterns in the data” – especially when that data gets to multi-terabyte and petabyte levels. Increasingly, business leaders will be interested to know how Hadoop can help them get to “actionable data” more quickly, based on analysis of extremely large datasets.
To drive home its point about business value, Cloudera spent time highlighting some of its high-profile customers, and how they had adopted Cloudera’s Enterprise Data Hub (EDH) and software tools to gain business advantage by analyzing company-wide data.
At the conference, executives from MasterCard and Costco spoke about their use of Cloudera in their production enterprise deployments. Costco is looking for faster updates to its rewards program, based on transactional data. Mastercard is building a highly secure system for merchants verifying credit-card use. In both cases, these customers said Cloudera’s offerings, and those of its partners, were building blocks for a broader business solution.
The Business Value of Data
Central to the business solutions Cloudera highlighted at the conference is an Enterprise Data Hub (EDH), which Cloudera described as the fastest-growing way that customers are consuming its product. Cloudera executives said the company’s customers are adopting it to gain insights to enterprise data and external data. Cloudera plans to build on this success by emphasizing EDH’s features, and its deployments at customer sites, even more in 2015.
When accelerated by faster analytics, enterprises are able to examine larger pools of data. The result is simple: By tapping into this new intelligence, enterprises are able to generate new sources of revenue, to innovate and to improve competitive advantage, and to transform their business by doing so.
That’s why Cloudera is so focused on getting the attention of business leaders.
Ben Woo, Managing Director, Neuralytix contributed to this Research Brief.