Cloudera and Hortonworks Merge

GettyImages-913629624This is exciting stuff, so let’s jump right in.

First on the financials, which are sure to dominate the headlines. It’s a stock merger with Cloudera stockholders getting 60% stake in the new entity and Hortonworks stockholders obviously getting the other 40%. The combined organization is initially being valued at $5.2 billion, with Hortonworks having found positive cash flow by offering robust support services across the data analytics pipeline and Cloudera too relying on incorporating support within its subscription-based pricing model.

While it will be interesting to see how the companies merge overlapping approaches, personnel, offerings, etc., the executive leadership team will consist of a combination of executives from both companies, with Cloudera CEO Tom Reilly leading the new organization and Hortonworks CEO Rob Bearden joining the board.

Now onto my thoughts. I cannot stress this enough - this is not about two vendors in the Hadoop space merging to cover for a drying Hadoop market. While Hadoop may be part of their history, both vendors independently recognized that the complexities of data lakes, big data processing, and analytics could be served better by doing more than “just Hadoop.” The challenge has been that financial markets, prospects, and even existing customers still view them as two Hadoop vendors.

Both organizations have taken their respective paths to march towards a more comprehensive platform. Through open source contributions, proprietary innovation, and strategic partnerships, it’s clear each organization has had success in various stages of the data pipeline, whether something as simplistic as improving management across the pipeline as a whole, addressing data integration, preparation, and transformation complexities, or offering services and support for data science, machine learning, and artificial intelligence.

The new org will likely be spun as a cloud-based enterprise data management company, which will lead to the first wave of comments/criticism - they don’t have a cloud. And while they have partnerships with most of the major cloud providers, most of those cloud providers have competing offerings. So what will happen next, say in 12-18 months? Keep an eye out for a big move from a major tech vendor with a cloud.

Topics: Data Management