Cloudera's Biz Model: Supporting Hadoop

We've covered Hadoop on a few occasions here at OStatic. Sponsored by the Apache Software Foundation, Hadoop is a software framework able to take advantage of huge clusters of computers to produce fast results for queries and more, by breaking them into parts. Yahoo makes extensive use of Hadoop for its search features. Now, as Valleywag is reporting, a veteran of Bear Stearns and Facebook is one of the folks behind Cloudera, a business focusing on supporting Hadoop deployments.

Valleywag reports:

"I'm confident that the founders of Cloudera will make tons of money, if only for this reason: Its data guru, Jeff Hammerbacher, worked on credit derivatives at Bear Stearns before he left and joined Facebook. He joined the social network in time for its notional value to soar to $15 billion."

Hmm, those are good resume notches, but I'm not sure they'll guarantee Cloudera's success on their own. There may be some other reasons why Cloudera could have a fighting chance, though.

As we covered here, Hadoop is a complex and powerful framework. It has a distributed file system designed to use thousands of computers at once to make complex tasks execute quickly, and an increasing number of businesses and institutions are depending on it.

According to Cloudera's home page:

"It allows you to explore complex, non-relational data in its native form, using custom analyses tailored to exactly the information and questions you have. Hadoop has been used in production by the largest Web properties in the world to process petabytes of data. Hadoop delivers insights you simply can't get with other analytical tools."

Cloudera's intent is to help with installing, configuring and running Hadoop, counting on Red Hat-type revenues gained from paid support for a free and open source software platform. The secret to Red Hat's successful implementation of that model has been getting large companies to buy into support and services, and then retaining them. Red Hat has an extraordinary customer retention rate for its largest 25 accounts. If Cloudera hopes to succeed, hooking up with large-scale Hadoop implementers and retaining them as customers will probably be the order of the day.