Yahoo!-backed Hadoop biz Hortonworks flings itself at the stock market

Open-source big data upstart in $100m IPO bid

Big data analytics firm Hortonworks filed paperwork with the US Securities and Exchange Commission on Monday announcing its intent to go public, making it the first of the Hadoop startups to float an initial public offering.

The filing didn't say how many shares Hortonworks plans to offer or at what price, but it estimated the total value of the firm's IPO at around $100m (although that may change).

Hortonworks is one of several companies to have built a business around Apache Hadoop, the open source data analytics engine that was originally developed by a team of engineers at Yahoo! and was derived loosely from Google's MapReduce and Google File System research papers.

The firm was founded in 2011 with $23m in seed funding from Yahoo! and Benchmark Capital. It has since raised another $50m from Yahoo! and various funds, plus another $50m investment from HP in July.

That doesn't make it the best funded of the Hadoop startups, though. In March, Intel lavished rival firm Cloudera with $740m, putting it well ahead of both Hortonworks and MapR, the latter of which has secured $110m in a funding round led by Google Capital.

Cloudera, Hortonworks, and MapR are all betting that as the amount of data captured by businesses increases, Hadoop will soon become as essential to enterprises as relational databases are today.

Hortonworks' SEC filing states that although the market for Hadoop software, hardware, and related services was worth just $2.0bn in 2013, it is expected to grow to $50.2bn by 2020, for a compound annual growth rate of 58 per cent.

Hortonworks' own share of that market is modest but growing fast. The company recognized just $1.65m in revenues for its fiscal 2012, but pulled in $41.54m for the twelve months ending on September 30, 2014.

Those revenues primarily come not from selling software but from offering support subscriptions. All of the software that makes up the Hortonworks Data Platform is developed as open source projects via the Apache Software Foundation.

So far, the lion's share of those sales have been to a few large early customers – perhaps most notably Microsoft, which provided 55 per cent of Hortonworks' total revenue during its fiscal 2013. In its S-1 filing with the SEC, Hortonworks said it expects its reliance on Microsoft to diminish as it wins more enterprise customers.

If Hortonworks is to become the first publicly-traded Hadoop company, however, it surely won't be the last. MapR CEO John Schroeder, for one, has said that he plans to take his company public in 2015. ®

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