Early Tech Darling Cloudera’s Business and Platform Disrupted by Big Guys Public Cloud

Cloudera, a private cloud software provider founded 11 years ago with high expectations, is learning the hard way that yesterday’s cutting edge is today’s outmoded model.

The company, created in 2008 by engineers from Google, Facebook and Yahoo, now struggles to compete against the combined public cloudOpens a new window and data analysis abilities of Amazon, Google and other tech titans. As a result, Cloudera’s chief executive and strategist left the companyOpens a new window earlier this month, and its shares plummeted.

Early on, Cloudera was at the center of the cloud’s momentum, a software provider that gave companies access to Hadoop, and open-source platform for big data applications running in clustered systems. It was one of the first offerings of off-site storageOpens a new window , and Cloudera was one of the first independent vendors to sell data analytics.

Initially, companies were able to extract value from massive collections of data by utilizing Hadoop, writer Alex Woodie saidOpens a new window . He added:

“This centralized approach would enable customers to eliminate stand-alone analytics systems and use a common set of tools and techniques to build a variety of applications, like fraud detection, customer 360 and product recommendations — all atop a single all-encompassing data platform.”

Disrupted by Easier Solutions

Hadoop was able to handle a number of open source projects, such as Hive, Impala, Storm, Giraph, Spark, and Tez.

All revolved around new business opportunities coming from big data, for which Hadoop was the open source platform and Cloudera was the leading data-management software that ran on it. Corporations used the combination to access machine learning and real-time analytics.

But the company’s private cloud business and platform were disrupted by Big Tech which successfully used its resources to market the public cloud’s lower costs and greater flexibility.

The main difference between the public and private cloud is that customers are not responsible for the management of a public cloud hosting solution. Their data is stored in the provider’s data center and the provider is responsible for the management, maintenance and security of the data center.

The most popular public cloud platforms form a Who’s Who of Big Tech: Amazon Web Services, Google Cloud Platform, Microsoft Azure, IBM Bluemix and Alibaba Cloud.

Modern technologies like artificial intelligence and big data analytics need heavy computing power. Cloud computing offers corporations an alternative to building expensive in-house computing and storage systems, and allows companies to use scalable computing power on a plug-and-play basis.

The combination of lower costs and greater flexibility have helped the modern cloud offerings to elbow solutions such as Hadoop and firms that sell them such as Cloudera largely to the margins of the market.

Advantages of Public Cloud

Public cloud platforms, such as Azure, have introduced new layers of infrastructure in the form of Platform as a Service, which have allowed engineers to design scalable data solutions. In the past, the solutions rarely would have been considered for on-premises systems because of their costs and complexity.

These days, the choice of data service reduces to simply selecting an existing off-the-shelf cloud service that matches the company’s business requirements.

Amazon Web Service, for example, offers clients a one-stop shop that frees them to use a full-fledged virtual cluster of computers, at any time, complete with tools to meet all their data management and security needs, entirely through the Internet.

It’s a combination that companies like MapR, a business software competitor to Cloudera, have found nearly impossible to compete against, even though they started offering their business software to companies on the public cloud.

Going Where the Data is Stored

“People need to deploy their big data analysis systems where they have their data,” Mike Olson, Cloudera’s chief strategy officer, told an interviewer. “Increasingly, that is the public cloud.”

MapR announced in May that it planned to lay off more than 100 employees and expected to shut down due to a lack of funding.

Cloudera’s former chief executive Tom Reilly acknowledged as much during Cloudera’s first quarter earnings callOpens a new window for 2020 when he discussed how Amazon Web Services and other giants have taken Cloudera’s best clients.

“We saw increased competition from the public cloud vendors, and so it just increased desire for (our) customers to understand how they can move workloads into the public cloud environment,” Reilly said.

“And so that’s where we saw some of the churn because we weren’t really competitive against what the public cloud guys were offering.”