Cloudera, a provider of open source Hadoop software for businesses, now has a valuation north of $4 billion: http://t.co/ZC745LCFQQOn April 8, 2014 I published on this blog the same thing
— Forbes (@Forbes) December 19, 2014
@Forbes This is 8 month old news: see my blog 04/2014 "Aftershocks after the @cloudera 4.1 billion bombshell" http://t.co/U2SKYhZ9Kc
— Miha Ahronovitz (@myinnervoice) December 21, 2014
What is this?
Why did Forbes tweet eight month old news? Here are some speculations
- Cloudera valuation is not proven by market quotes an IPO did not take place yet.
- Cloudera competitor - Hortonworks Inc - valued at 1,8 billions - is rumored that filed to go Public in November 2014.
- Another smaller competitor, MapR also announced its intention to go public next year in 2015 (which is only 10 days from now)
How much room we have on market for three varieties of Hadoop and Spark ?
Quoting from WSJ
Not making a profit now is acceptable if long term the expectations of future profits will transform in reality. Twitter did not make a profit yet.Hortonworks’ IPO filing shows both the opportunity and the challenges. The company’s revenue has more than doubled in the past year, while operating expenses and losses also have roughly doubled.For the nine months ended Sept. 30, revenue was nearly $33.4 million, compared with nearly $16 million for that same period in 2013. But losses were also substantial and growing—$86.7 million in the first nine months compared with $48.4 million in 2013.Eric Baldeschwieler, a Hortonworks co-founder who was the company’s CTO until he departed last year, acknowledged it was still early days. However, signs in the market were positive, he said. “We’ve seen companies move from pedestrian use cases at small scale to exciting use cases at a large scale,” he said.Cloudera CEO Tom Reilly said in an interview that his company wasn’t yet ready for an IPO, although its revenues and customer numbers were double those of Hortonworks, which said it had just under 300 customers, including partners. Cloudera was also losing money, but at a lower rate, he said. “We would like to be a public company, and we will do it on our time,” he said.Unlike Hortonworks, which received a sizable portion of its revenue from its partnership with Microsoft, Cloudera’s revenue came entirely from paying clients, Riley said.
But what Hadoop companies lack, is the built-in ability top go viral like LinkedIn, Twitter, Facebook to attract customers fast.
The puzzleHow can a company with 300 customers be valued at 1.8M? Can a company with 1,000 customers be valued at $4.1 million? Who am I to judge, other than being a small independent blogger.
Like the child from the tale The Emperor's New Clothes I see that Hortonworks value is $ 6 million per customer and Cloudera assuming 1,000 customers has a value of $4.1 million per customer
By comparison Twitter valuation of $24 billion for 0.3 billion users, represent $60 per user. This means Horton valuation per user / customer is 100,000x that of Twitter.
One may argue that a customer and a user are two different things. But for Hadoop companies, what it counts is who pays the bills.
I have seen many wonders in the Valley, and I sure I will see another one. But the key of the success is to make the customers addicted to Hadoop. This means ease of use