Does Cloudera Have a Big Data Exit Strategy?
Cloudera's CEO has sold out to Oracle before. Will he do it again? And what are the economics of the Big Data business, anyway?
Big Data is big business -- a truth that Cloudera CEO Mike Olson understands better than most.
Olson is no newcomer to the technology business. Prior to Cloudera he ran Sleepycat Software, which maintained the Berkeley DB database. Oracle acquired Sleepycat in 2006.
Given this past history, is an acquisition in the cards for Cloudera?
Cloudera Business Model
Cloudera was founded in the summer of 2008 and was the first vendor to commercialize the open source Hadoop effort. According to Olson, today his company employs approximately 70 percent of the core creators of the Apache Hadoop group of projects.
Cloudera offers the Cloudera Distribution of Hadoop (CDH), a freely available packaged Hadoop distro. On the commercial side, the Cloudera Manager product enables administrators to run a thousand node Hadoop cluster in production.
"The idea is that if it's about the platform, whether that's data storage, analysis or processing, that's all open source," Olson said. "If it's about mitigating business risk, then we get to charge money for that with our proprietary product."
CDH and Cloudera Manager are bundled together and sold by Cloudera on an annual subscription basis. Olson noted that the business has been growing at a furious pace.
"We think we have a good strategy, and it certainly doesn't hurt to be in the middle of a market that is exploding around us," Olson said.
Leveraging partners is a key part of that strategy. Cloudera has over 400 certified partners in its ecosystem. While Cloudera delivers a platform that is easy for IT staff to run, its partners are the ones that deliver the apps and tools that make the platform more consumable, Olson said.
"It's very much like the model that Ingres, Sybase and Oracle pursued in the early days of the relational database market," Olson said. "Make the platform easy to run in the data center and then leave money on the table for partners to deliver business value, and they will drag us into deployments."
While Olson successfully exited his last company with an acquisition, that's not necessarily the plan he has for Cloudera. Earlier this month the company hired its first chief financial officer, Jim Frankola.
"It is our conviction that we're building a long term standalone company and that we want to remain independent," Olson said.
Though he would rather remain independent, Olson said his investors want a return on their investment. "I did sell the last business I had to Oracle, and I can tell you that for me personally it was a life changing transaction," he said. "It made a big difference in what I could aspire to do next."
In Olson's view, what is happening in the Big Data market today feels a lot like the relationship database market of the 1980s and '90s. "We believe that this market will be worth tens of billions of dollars a year, just as the relational market is," he said.
Olson aspires to bring Cloudera to the public markets in an IPO and grow the company.
"I would love the opportunity to ring the opening bell on Wall Street. Certainly we think the company has the capacity and the opportunity to be a long term standalone business," he said. "So while I won't say there no case in which we would not entertain an M&A offer, I will say that we're focused on building a business that doesn't grow up to be sold to IBM, but gets to grow up to be IBM."