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Cloudera Touts Growth, Sharpens Focus at Analyst Event

Cloudera held it’s second annual industry analyst event on March 16 and 17, 2015. While the company didn’t announce when it plans to file its IPO (to the chagrin of the 40 or so gathered analysts), top executives including CEO Tom Reilly did review Cloudera’s financial performance and customer growth in FY 2015 and outlined its key focus areas from both a messaging and go-to-market perspective.

Some highlights …

  • Cloudera topped $100 million in revenue in FY 2015 (which ended January 31, 2015), a significant milestone for any technology vendor. Wikibon estimates about 65% of that revenue is subscription software, with the remaining 35% non-recurring services revenue.
  • The company is losing money but, according to CEO Reilly, “We are losing money more efficiently than our nearest competitor (Hortonworks).” Reilly did not provide specifics, however.
  • It added 264 new software subscription customers in FY 2015 for a total customer count of 535 (unique accounts, not multiple deployments in a single account) at year’s end. By comparison, Hortonworks claimed 332 unique customers as of December 31, 2014.
  • Cloudera has over 1,400 partners, around 800 of whom are systems integrators/professional services firms. This is inline with overall market dynamics, as over 70% of Big Data early adopters leverage consultants to support new deployments, according to Wikibon’s analysis.
  • The company plans to shift is messaging away from the underlying technology and towards business use cases/outcomes. It is focusing it’s go-to-market efforts on two specific vertical industries – financial services and telecommunications – and on large enterprises with $1 billion-plus in annual revenue.

Cloudera also took steps to better clarify its strategy vis-a-vis the emerging Big Data stack. As Wikibon has said before, we believe that Cloudera’s goal is to own most, if not all, of the Big Data stack. Insights from the analyst event allow Wikibon to clarify with more specificity what we mean.

Namely, Wikibon believes Cloudera’s strategy is to own the Hadoop slice of the Big Data stack, meaning Hadoop distribution software (CDH), Hadoop monitoring and management software (Cloudera Manager), as well as the data processing and analytics layer (HBase, Impala, Search, etc.), and data governance & data management tooling (Cloudera Navigator.)

We would also add security to this list. Cloudera CEO Reilly said during the event that security is the company’s number one differentiator over competitors.  The company spent much of 2015 doubling-down on security. Namely, the company worked closely with investor Intel to integrate data encryption into the chip-level, efforts it completed at the end of the year. Cloudera also made a security-related acquisition in FY 2015, picking up Texas-based Big Data security specialist Gazzang. Gazzang was integrated into a security center of excellence in Dallas.

Cloudera went out of its way during the event to say it has no plans to move into the Big Data application layer or business intelligence space, and is partnering with players in this space to help customers visualize and make use of Big Data analytics. In fact, Vice President of Products Charles Zedlewski said the single biggest driver of new workloads for the company are customers that want to leverage Tableau Software on top of Cloudera’s Hadoop platform. Cloudera is also partnering with data integration vendors such as Informatica and Syncsort to enable customers to more easily get data into the Cloudera platform.

In a related area, Cloudera is focusing on helping customers offload data warehouse workloads to Cloudera’s Hadoop platform. In February Cloudera acquired whose products help database administrators better understand SQL workloads running in existing data warehouses and identify the best candidates to move to Hadoop. The acquisition further emboldens Wikibon’s view that Cloudera’s long-term strategy is to compete with, not compliment, data warehouse vendors such as Teradata, IBM (Netezza deployments specifically) and Oracle.

Finally, Cloudera reiterated its opposition to the newly formed Open Data Platform, an industry consortium led by competitors Hortonworks and Pivotal with the stated goal of “standardizing” the Apache Hadoop core. For Wikibon’s analysis of ODP, see Boiling Down the Open Data Platform Debate.

Cloudera’s goal, we believe, is to build a comprehensive Big Data data management platform – from storage to processing to analytics – built on an open source base (Apache Hadoop) monetized via value-add software and services and supported by partnerships in the data integration and applications layers. CEO Reilly’s comment that the company is losing money, albeit more efficiently than its rivals, is a testament to the challenges of building a software company based on a product who’s core is open source and, hence, freely available to all. That said, Cloudera appears to be gaining traction with its high-end product, Enterprise Data Hub, with a number of large customers. For Cloudera to succeed, it must continue to grow its EDH business and quickly expand those deployments to new workloads and use cases in order to achieve profitability.

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