Cloud Hadoop Competition Hits MapR, Cloudera

Enterprise customers of big data platforms that incorporate Hadoop may be taking a wait-and-see attitude to new contracts and renewals.

That's because it's been a tough few months for the original purveyors of the hot big data technology from a few years back, Hadoop.

MapR filed a WARN notice in California to inform its employees that it will likely be closing down permanently and laying off 122 workers on June 14 if it can't get additional funding or a buyer.

The other two original Hadoop providers, Cloudera and Hortonworks, are finishing their integrations after they merged with each other in a deal announced in October 2018. However, on June 5 the combined company reported lower than expected revenue and earnings for its Q1, lowered its revenue expectations for the full year, and announced its CEO would be retiring in July. How much lower does it expect the revenues to be? The company now expects revenue in the range of $745 million to $765 million compared to a previous estimate of $835 million to $855 million.

What's going on? These companies were the center of attention for big data not so long ago. Then they recognized the need to move beyond Hadoop and evolved their platforms to include a stack of technology that enterprises would need for data management and analytics to meet the market demand. They both have won over a number of significant customers. MapR's enterprise clients have included Audi, Cisco, Ericsson, HP, Novartis, Outbrain, SAP, TransUnion, United Healthcare, and others. Cloudera's customers include ADP, Mastercard, the NYSE, and Thomson Reuters, among others.

But in spite of these moves, both companies saw deals delayed over the past several months. In Cloudera's Q1 earnings call, the now outgoing CEO Tom Reilly acknowledged that some of that business went to the native Hadoop implementations of public cloud providers including AWS.

Cloudera's salesforce and customers were on hold for 5 months, waiting for a product roadmap from the newly merged company. Customers didn't want to wait.

"A lot of those opportunities were taken by public cloud guys," Reilly said, about the deals lost in the first quarter.

Amazon's cloud-based Hadoop has been the biggest competitive threat to Cloudera, Hortonworks, and MapR, Gartner VP and analyst Merv Adrian told InformationWeek back when the Cloudera, Hortonworks merger was first announced in October 2018. Netflix, Razorfish, and Yelp all use the Amazon cloud version of Hadoop, according to the AWS Hadoop customer page.

Big data customers may be considering several different options as the dust settles around the Cloudera/Hortonworks merger and MapR's impending shut down.

Adrian said that MapR has experienced trouble before, recounting how the company ousted CEO Matt Mills at the beginning of 2018 to bring back founder and executive chairman John Schroeder as CEO, and gave up on its effort to prepare for an IPO.

"MapR has formidable competition on premises from a much larger Cloudera now, and faces increased pressure from cloud providers offering their own Hadoop-based solutions. Their proprietary versions of open source components now appear more risky as a result, and lead to more questions about their suitability for long term plans," Adrian told InformationWeek this week. "Gartner has talked to a number of concerned [MapR] customers, some quite large, who believe in the technology, and some made additional investments during the past year, but the outlook is not encouraging."

Among the company's missteps was the transition from direct sales to an indirect model, which is tricky when you are dealing with complicated technology sales to enterprise-sized companies, according to Adrian.

In spite of its own difficulties, Cloudera may be positioned to take advantage of MapR's troubles. Cloudera's Reilly said that the merger with Hortonworks has enabled the company to get more resources and scale to develop cloud architecture to "quickly re-platform our business. MapR could not get the resources or scale. Their customer base is an opportunity for us and part of our growing pipeline."

Yet Cloudera has yet to unveil its Cloudera Enterprise Data Platform, the unified Cloudera/Hortonworks offering announced in early 2019 and expected to be released this summer. This platform will support hybrid multi-cloud implementations, letting organizations move their workloads between on-premises and the cloud. Executives believe the hybrid nature of the offering will give it a competitive advantage over the cloud-only native public cloud Hadoop. When the platform is publicly released, Cloudera plans to update its pricing to the consumption model that is common with cloud computing, Reilly said.

Reilly will stay at Cloudera through July when he will retire and be replaced as CEO by board chairman Martin Cole who will act as the top executive while the board conducts a search for a permanent replacement.

Meanwhile, Reilly expressed confidence in the company's plans.

"We think bookings will show up later this year and accelerated revenue growth next year," he said.