Hortonworks president Cunitz: 141% customer renewal rate bodes well

Hortonworks president Herb Cunitz says his company’s recently declared 2014 results are cause for celebration

Hortonworks' recently declared 2014 results are cause for celebration, despite negative technology press reaction, according to the firm's president, Herb Cunitz (pictured).

The distributor of Hadoop, the open-source distributed computing framework used in big data, recorded 2014 revenue of $46m and a net loss of $177m. This was the company’s first set of results since its November 2014 inital public offering (IPO).

Full-year revenue for 2013 was $24m, and the company made a loss then of $63m.

Annual revenue growth from 2013 to 2014 was 92%. Cunitz said the signing up of 99 customers worldwide in the fourth quarter of 2014 –17 of which were outside the Americas – boded well. “Our average renewal is 141%," he said. "That is to say if a customer buys $100 of service one year, they will buy $141 the next.”

The 2014 results included a “one-time GAAP [generally accepted accounting principles] loss from an accounting transaction” in respect of the company’s relationship with Yahoo, from which Hortonworks originally emerged in 2011

This was a compensation expense – two common stock warrants with a combined “fair value” of $57.4m – realised at IPO. “This has zero impact on an operating basis," said Cunitz.

Hortonworks now has 331 customers, while competitor Cloudera has said it has 525 customers. “But we have been going for nine quarters," Cunitz said. "They have been going for 24.”

Read more about Hadoop distributors Cloudera, Hortonworks, and MapR

Although Cloudera signed up 65 new customers in the fourth quarter of 2014, Cunitz claimed that Hortonworks is "growing 52% faster" than its closest competitor.

Hortonworks is one of the suppliers behind the new Open Data Platform (ODP) initiative, which is aimed at promoting Hadooop. Cunitz said this initiative, which involves 14 other companies, will agree on what the core Hadoop kernel will be. 

"Let’s drive some standardisation to take the friction out of the market," he said. "This is about which components to standardise on.”

The ODP does not involve, Cunitz noted, Cloudera and MapR, two other Hadoop distributors. It also does not include Microsoft and HP, which “already partner with Hortonworks and use HDP [Hortonworks Data Platform] as their platform,” he said. “So, it would not buy them anything to be on the initial ODP list.”

Cunitz said the big data, Hadoop-centric industry has already crossed Geoffrey Moore’s concept of a technology adoption chasm

"The early majority now is already there," he said. “We are starting to see things liked retailers doing intra-day pricing using Hadoop. And the supplier side of the industry is starting to consolidate around standards. You could argue that the Open Data Platform is an early sign of that.

“It is still early phases of companies moving all their data to Hadoop to then serve it up to, say, Teradata for their data warehouse, or SAP Hana for real-time processing.”

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