Hortonworks and Cloudera, two companies that are based upon the open source Hadoop platform, have decided to merge together into a single entity. The merged entity will have a value of $5.2 Bn, and both Cloudera and Hortonworks will hold equal equity in the final company. It should be noted that both Cloudera and Hortonworks are publicly listed firms.
The interesting thing about Hadoop, is the fact that it is open source, and that it is insanely complex. That is exactly where companies like Hortonworks and Cloudera come in. By packaging Hadoop’s capabilities in a manner that is easy to consume for enterprise IT departments, the two companies managed to create billion dollar businesses.
The two did however, take different approaches. While Hortonworks is a pure open source firm, Cloudera combines open source with it’s in-house proprietary tools. What’s more, while the former sells to big data technologists, Cloudera’s solutions are aimed towards solving different business problems.
However, the onset of cloud has given birth to a whole load of easily consumable big data solutions. These solutions are pre-packaged, and have managed to put Hadoop based systems on the run. This is exactly why the two companies decided to split their differences and join hands to create a more sustainable enterprise. The combined entity will have 2,500 customers, revenues of over $720 million, and $500 million in cash with zero debt.
Speaking on the topic, Tom Reilly CEO, Cloudera said:
Our businesses are highly complementary and strategic. 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.
Hortonworks CEO Rob Bearden agrees:
This compelling merger will create value for our respective stockholders and allow customers, partners, employees and the open source community to benefit from the enhanced offerings, larger scale and improved cost competitiveness inherent in this combination.
The deal will be an all-stock merger, and both of the companies will have equal equity in the final entity.