Yesterday, MapR, a pioneer in cloud data management since 2009, announced that it plans to cut 122 jobs and close its headquarters which is located just a few miles from our location in Silicon Valley. Just a few years ago, MapR was considered one of the Unicorns (startups that were valued at a billion dollars or more) in the Big Data Analytics market which is a booming market. MarketWatch estimates that the global big data market is expected to grow at a CAGR of 22.4% during the forecast period and reach USD 200 billion by 2024. MapR is not the only Big Data Analytics vendor that is laying off workers. Cloudera and Horton Works recently merged and went through layoffs earlier this year.
Some analysts attribute this to a natural consolidation of the “surplus of enterprise Hadoop companies” after the hype and frenzy of the VC community reached its peak. The cost of sales and services are also very high and the pay per use model puts a squeeze on cash flow. The difficulty of monetizing a business based upon open-source software is challenging. Analysts are also predicting that the Big Data Analytics ecosystem will converge around AWS, Azure, and Google Cloud and many of these smaller companies will be acquired or displaced by the large public cloud vendors.
While layoffs are disturbing, there should be plenty of opportunities for these workers to find work, especially since most companies are looking to Big Data Analytics to build competitive advantage. I am hopeful that these smaller companies survive since we need them as part of our hybrid cloud ecosystem. While we count on public cloud for our operational systems like marketing and CRM, we keep our enterprise systems like finance and supply chain on private cloud and integrate many of these Big Data Analytics products with our own products like Pentaho to provide best of breed solutions. Our enterprise data systems need to be behind our firewalls to ensure security and governance of our critical enterprise data. Many Big Data Analytics products also enable movement of applications and data across public and private clouds and leverage public cloud services like containers and server-less computing. We incorporate many of these products in our DataOps offerings.
There should be plenty of opportunities for these companies to grow and prosper if they can survive the early startup costs. Since unicorns are funded by VC investors, many will be bought out as soon as they become successful. However, the people who work in these startups, even those that don't survive, will continue to work and bring the innovative skills they developed in Big Data Analytics to enrich the overall market.