Cloudera and Hortonworks, which both have built big businesses by packaging Hadoop for the enterprise, have agreed to merge.
The companies announced this week a plan to swap stock, with Hortonworks shareholders expected to receive 1.305 common shares of Cloudera for each share of Hortonworks they own. Once the deal is closed, Cloudera stockholders will own about 60 percent of the combined company’s equity, with Hortonworks stockholders owning the rest.
Open source Hadoop has been one of the most popular ways for companies to store lots of data for analytics. In recent years, however, big public cloud platforms’ storage and analytics services have outgrown Hadoop in popularity, leaving Hadoop distributions like Cloudera and Hortonworks struggling to grow market share.
Hortonworks and Cloudera have addressed the increased competitive pressure on Hadoop by adding new capabilities, such as Apache Spark and support for public cloud storage services.
By merging, the companies hope, they’ll be able to bring to market an end-to-end enterprise data management solution that will be stronger than competitors’, while also saving some costs. They expect the transaction to result in $125 million in annual cost synergies. (Both lost money in the most recent full fiscal year.)
The play is to provide a unified enterprise data platform that spans customers’ data centers, public cloud environments, and edge locations. The combined company will support more major public cloud platforms than each of them supports currently. Cloudera supports Amazon Web Services and Microsoft Azure, while Hortonworks supports Google Cloud, IBM Cloud, and Azure.
The combination will also cover a much wider variety of partnerships with data warehouse hardware makers, such as Oracle, Intel, IBM, and Teradata.
The combined company is expected to generate about $720 million in revenue from more than 2,500 customers.