Clouds gather as Cloudera and Hortonworks settle on uneven merger

$5bn deal sends stock market Hadoop over heels

The big data market became a little less competitive on Wednesday when two of the biggest players, Cloudera and Hortonworks, agreed to merge.

“Our businesses are highly complementary and strategic,” said Tom Reilly, chief executive officer at Cloudera.

“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. This vision will enable our companies to advance our shared commitment to customer success in their pursuit of digital transformation.”

Reilly has good reason to be happy. While the official announcement described the joining as a “merger of equals,” the boot is very definitely on Cloudera’s foot. Reilly will be CEO of the newly merged company, and his co-workers will fill the CFO and chairman’s positions as well. In addition the new firm will be 60 per cent owned by Cloudera shareholders, with 40 per cent going to Hortonworks.

“This compelling merger will create value for our respective stockholders and allow customers, partners, employees and the open source community to benefit from the enhanced offerings, larger scale and improved cost competitiveness inherent in this combination,” said Rob Bearden, chief executive officer of Hortonworks, who will be joining the board of directors of the new firm.

“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. 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.”

Both companies have yet to make a profit and the merger should allow the new business to cut down on duplicate staffing costs and head towards making some actual money. Shares in both firms rose over 10 per cent on news of the merger announcement. ®