In case you were wondering, "big data" is still a thing. And in case you needed proof, recent earnings reports from Cloudera and Hortonworks suggest there is still big money in big data. We've taken to dressing it up in machine learning or AI clothes, but most companies are still struggling with the foundational basics of wildly variegated, fast-moving, high volume data, and are willing to pay for some help.
Reality catches up with the hype
If you're bored with the very idea of big data, assuming it's passe, you're not alone. A quick glance at Google search trends indicates a tapering off of interest over the past year. The hype cycle for big data, it would seem, has played itself out.
As often happens, however, just as big data has lost its hype, it's actually accelerating in terms of real enterprise adoption. Early on, the hype powers all sorts of proof of concepts and other tire-kicking, but little production deployments, as Gartner has highlighted for years (also see here). Today we finally seem to be getting to the dull but profitable phase of Hadoop, Kafka, and other big data technologies becoming part of the enterprise "furniture."
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Using Cloudera's earnings as a guide, consider the following:
- Subscription revenue was up 48% year-over-year, increasing from a 46% growth rate in the company's second quarter.
- Subscription revenue represented 83% of total revenue, up from 78% in the year-ago period. This would suggest that the company is able to sell more bits rather than having to peddle services to stitch that software together.
- Cloudera's net expansion rate was 135% for the quarter, just off a high of 140% in fiscal Q3 2018 (Net expansion rate refers to same-customer sales versus one year ago, and is an indication that customers that buy into Cloudera's big data vision tend to deepen their commitment over time).
- 23 net new Global 8000 customers added, with these larger customers spending considerably more, on average: Initial customer spend grew from $65,000 to $75,000.
- 50 customers are now spending $1 million or more each year with Cloudera, up from 40 in the company's second quarter.
In short, enterprises are putting more money into Cloudera and its peers (Hortonworks' data shows similar strength). It's a sign of a maturing market.
Ironically, the cash cow (or elephant) that kickstarted it all, Hadoop, is now out-of-favor in corporate branding, even if enterprises continue to adopt it. As Gartner analyst Merv Adrian highlighted: "The leading 2017 story of Hadoop distributions is that nobody seems to want to be accused of being in the business of providing them."
Adrian goes on to describe what these vendors are doing to replace Hadoop: "The former [Hadoop] Distributors are...adding products based on other Apache projects or their own pieces to generate additional revenue streams, partnering with third parties to create go to market offerings targeted at specific use cases, and in some cases, getting out of the [Hadoop distribution] business entirely." In other words, the big data vendors are "focus[ed] on business outcomes to meet mainstream buyers where they live."
This is an indication that vendors are focused less on trying to stoke the fires of fading hype and more focused on helping enterprises solve real big data problems. These won't necessarily involve a cure for cancer, though that would be nice, but rather more incremental ways to improve how enterprises do business. Less hype, more real. All good.
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Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. Asay has also held a variety of executive roles with leading mobile and big data software companies.