The Cloud

Big-Data Rivals Cloudera, Hortonworks to Merge

The merger of equals would combine Hadoop software developers with complementary strengths in data storage, advanced analytics, and data management.
Matthew HellerOctober 4, 2018

Cloudera and Hortonworks, two of the biggest players in the big-data market, have agreed to merge in a move to offer a unified platform for everything from edge computing to the Internet of things.

The all-stock merger of equals announced Wednesday would combine two companies whose core business, Hadoop open-source software products for analyzing large data sets, has experienced a slowdown in growth amid competition from Web-based data platforms.

Cloudera’s strength is in data storage and advanced analytics while Hortonworks specializes in data management.

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“Our businesses are highly complementary and strategic,” Cloudera CEO Tom Reilly said in a news release. “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.”

The combined equity value of the two companies is $5.2 billion based on the closing prices of their stocks on Tuesday. Reilly will serve as CEO of the combined entity, with Cloudera CFO Jim Frankola serving as its finance chief.

Hortonworks, which spun out of Yahoo, went public in 2014, while Cloudera, which is the larger company in terms of market capitalization and revenue, went public in 2017.

As Xconomy reports, the merger “comes at a time when web-based data platforms are offering customers the ability to use artificial intelligence software to analyze data distributed among their own data centers as well as multiple cloud storage options. These platforms are also extending the reach of cloud computing to distributed ‘edge clouds.’”

The combined company will have about $720 million in revenue, more than 2,500 customers, and about $500 million in cash.

“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,” said Hortonworks CEO Rob Bearden, who will join the combined company’s board. “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.”