CloudEra Stays Competitive with Move to Open Source

Out with the old and in with the open source. Big data enterprise software provider CloudEra has recently joined the ranks of those who are fully embracing the collaborative model of source-code-for-everyone. While there are questions about whether this model will help them reach their full potential, the company remains committed to their course of action.

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CloudEra was founded in 2008 by Yahoo’s own Amr Awadallah, Google engineer Christophe Bisciglia, and Facebook data team titan Jeff Hammerbacher. The company’s flagship product was built on the Hadoop framework – a means for accessing and processing large clusters of data stored across a distributed network. They originally upended the data warehouse model with a platform that offered more flexibility and faster processing times. A few years later and now it’s Hadoop that is being disrupted by cloud-computing, AI and real-time processing.

In an effort to stay competitive, CloudEra has just completed a $5.2 billion merger with competitor HortonWorks and is moving away from their Hadoop roots. They now sell their services as an ‘enterprise data cloud’ and are hoping to catch those clients in need of hybrid support of on-premise and cloud-based data management.

In a March 2019 interview with Computer Business Review, Cloudera’s CMO, Mick Hollison, spoke about his company’s intentions for a cloud-crowded marketplace. In response to a rather pointed question about whether the company felt that public cloud providers “would eat them for lunch” after moving to an open-source approach, Hollison said: “It was core to the merger talks [with HortonWorks] from the beginning that this was something both executive teams wanted to do. However, being open source, and which licensing mechanism you choose for your open source software are two independent thoughts.”

“The fact that we’re going 100 percent open source, does not mean we may not in the future change our licensing structure,” he added. “The reality is that the large cloud infrastructure providers, as it stands today, can very easily just take the open source bits – whether they do or do not contribute them back to the community – and compete vigorously?”

The market has not been kind to Cloudera over the last twelve months, their stock took a 20 percent hit after their fourth quarter earnings release failed to hit their targets. Revenue came in at $144 million in Q4 2019 after analysts predicted $209 million. Despite this dip, there is an untold story playing out underneath those numbers. The January merger with Hortonworks has wreaked some havoc with integration of sales and accounting operations. In short, there will be some short-term losses but this is expected to balance out as the companies finish combining.

Hollison offered insight into Cloudera’s sales strategy for the upcoming year: “We’ve identified around two thousand accounts that we want to go chase. We’re going to go seek additional opportunities in the telco and automotive and life sciences spaces, because we’ve already got a strong footprint in those at the top end of those industries.”

Hollison also points to the company’s ongoing relationships with customers. The bulk of their growth, he stated, currently comes from existing clients looking to buy into more services. While this sales segment can only take them so far, it provides a cornerstone for business while the opportunity for cross-selling to HortonWorks’ client list is fully explored. Today, Cloudera has more than 1,600 employees. They have offices in 24 countries around the globe, with their headquarters in Palo Alto, California.