Cloudera-Hortonworks Merger Creates Big Data Platform Kingpin

The global big data management software market will change dramatically with the all-stock merger of big data and open source software rivals Cloudera and Hortonworks who have a combined equity value of $5.2 billion.

The game-changing merger will create an industry behemoth offering data management and related software for multi-cloud, on-premise and the edge environments, the two companies said. Hortonworks CEO Rob Bearden said that the "compelling" combination would benefit partners, customers and the open source community from the combined companies’ enhanced offerings and "improved cost competitiveness."

"Together, we are well positioned to continue growing and competing in the streaming and IoT, data management, data warehousing, machine learning/AI and hybrid cloud markets. Importantly, we will be able to offer a broader set of offerings that will enable our customers to capitalize on the value of their data," said Bearden in a statement.

Shareholders on both sides seemed to support the merger as Cloudera's stock shot up 17 percent to $19.95 per share as of Thursday morning, while Hortonworks’ stock also surged 17 percent to $25.58.

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The combined company will have $720 million in annual revenue and more than 2,500 customers, with hopes of achieving more than $125 million in annualized savings through sales optimization and R&D, according to the companies.

The two vendors plan on creating the "industry's first enterprise data cloud" from the edge to artificial intelligence, said Cloudera CEO Tom Reilly.

"By bringing together Hortonworks' investments in end-to-end data management with Cloudera's investments in data warehousing and machine learning, we will deliver the industry's first enterprise data cloud from the Edge to AI. This vision will enable our companies to advance our shared commitment to customer success in their pursuit of digital transformation," said Reilly in a statement.

Cloudera, which went public last year, develops hybrid software that combines open-source Hadoop software with its own proprietary technology in an enterprise-grade platform for data management, machine learning and advanced analytics. Hortonworks, which went public in 2014, is a global provider of data management platforms and services and was also key in commercializing Hadoop's big data software.

Cloudera CEO Tom Reilly will serve as CEO of the combined companies while Cloudera CFO Jim Frankola will be CFO. Hortonworks chief operating officer Scott Davidson will serve in that capacity in the new company, as will Hortonworks chief product officer Arun Murthy. Hortonworks CEO Rob Bearden will serve on the board of directors.

Cloudera stockholders will own approximately 60 percent of the equity of the combined company while Hortonworks stockholders will own 40 percent. Hortonworks stockholders will receive 1.305 common shares of Cloudera for each share of Hortonworks stock owned.

The deal is expected to close in the first quarter of 2019, must be approved by both companies’ shareholders and is subject to U.S. antitrust and other regulatory approvals.