Cloudera And Hortonworks Complete Their Merger, Creating Big Data Platform Powerhouse


Big data software developers Cloudera and Hortonworks completed their merger Thursday in a move the companies say creates a new enterprise data cloud provider powerhouse.

Now the newly combined companies, operating under the Cloudera name, face the complex task of integrating their operations and rationalizing their respective product lines.

Cloudera and Hortonworks announced the merger deal on Oct. 3, combining two of the leading providers of big data platforms and related data management tools. Shareholders of each company approved the deal in December, with Hortonworks shareholders receiving 1.305 common shares of Cloudera for each share of Hortonworks stock, leading to today's official completion of the merger.

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"Today, we start an exciting new chapter for Cloudera as we become the leading enterprise data cloud provider," said Tom Reilly, Cloudera's chief executive officer, in a statement. "This combined team and technology portfolio establish the new Cloudera as a clear market leader with the scale and resources to drive continued innovation and growth. We will provide customers a comprehensive solution-set to bring the right data analytics to data anywhere the enterprise needs to work, from the Edge to AI, with the industry's first Enterprise Data Cloud."

The combined companies have annual sales of $720 million and more than 2,500 customers. But prior to the merger the two companies had struggled to maintain profitability: The expectation is that savings through sales and R&D optimization will help the new Cloudera achieve that with operating margins of 15 percent or better.

Cloudera will offer its technology for a range of big data tasks in both cloud and hybrid IT environments. That means the company will at times be competing with cloud giants like Amazon Web Services and younger companies like cloud data warehouse supplier Snowflake Computing.

The merger "gives us more scale and resources to compete against those vendors," said Cloudera chief marketing officer Mick Hollison said in an interview with CRN shortly after the merger was announced.

The expectation is that by the end of 2020, Cloudera will be a $1 billion-plus company with annual sales growth of 20 percent or more, Hollison said.

At the time of the merger deal announcement the companies said that Cloudera CEO Tom Reilly would retain his post, as would Cloudera CFO Jim Frankola. Hortonworks Chief Operating Officer Scott Davidson will serve in that same capacity within Cloudera, as will Hortonworks Chief Product Officer Arun Murthy. Hortonworks CEO Rob Bearden has joined Cloudera's board.

The biggest task now before Cloudera is rationalizing the Cloudera and Hortonworks product portfolio. Both companies have platforms based on Hadoop and other open-source technologies: the Hortonworks Data Platform and the Cloudera Enterprise Data Hub.

"We share a lot of common platform elements. We think we'll get to a common platform pretty fast," Hollison said.

But there are many redundant and overlapping products that will need to be combined or discontinued with product migration paths developed for customers and partners. The plan, Hollison said, is for the new Cloudera to support both vendors’ current products for three years.

Hortonworks' technology portfolio is particularly strong in data ingestion and data management, Hollison said, including the Hortonworks DataFlow software. Cloudera's product line, including the Cloudera Data Science Workbench, is strong in machine learning and artificial intelligence.

Hollison said the development work will be expedited by the fact that the two companies had a common big data vision and that developers for both companies often worked together in the open-source software realm.

Cloudera has scheduled a broadcast event for Jan. 10 to discuss the company's product roadmap and development plans.

Cloudera has yet to detail its post-merger channel strategy. Both companies have extensive ecosystems of ISV, VAR and system integrator partners: Cloudera counts Accenture and Deloitte among its partners while Hortonworks' partner roster included Atos. Hollison said the merger will offer those partners a more comprehensive product line to work with while "allowing them to consolidate around an industry standard" platform.

Cloudera and Hortonworks, both on the CRN annual Big Data 100, both have "amazing talent" in such areas as engineering and go-to-market," said Kunal Agarwal, CEO of Unravel Data, a developer of big data application performance management software that works with both vendors' platforms.

In an interview with CRN, Agarwal said he'll be watching to see how "the topology" of the combined product lines develops – "What will the new stack look like?" he said – as well as how the two companies mesh from a personnel and cultural perspective.