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For months the speculation was rampant, and now the rumors have proven to be true. Yahoo has officially announced that it will become a player in the emerging Hadoop market. Hadoop provides distributed computing capabilities that enable organizations to process very large amounts of data quickly. Backed by Yahoo and Benchmark Capital, a new entity called Hortonworks has formed around a team from Yahoo that consists of more than 20 key architects of and contributors to the Apache Hadoop project. The company will start with some 25 employees and “will be hiring aggressively from our collective networks,” according to Rob Bearden, Hortonworks president and COO.

The strategy behind Hortonworks is relatively simple: focus on adoption and maturation of the open source Apache Hadoop project. The name plays off that of the toy elephant that symbolizes Hadoop and is a reference to the elephant in the Dr. Seuss book Horton Hears a Who. Hortonworks CEO Eric Baldeschwieler, formerly VP of software engineering for the Hadoop team at Yahoo, spoke recently at the IBM Big Data Symposium where IBM also indicated its support for the Apache distribution of Hadoop. Other vendors including Cloudera, EMC Greenplum and MapR have announced their own distributions of Apache Hadoop, rather than relying solely on the Apache distribution.

Our forthcoming research on Hadoop and information management shows that enterprises are interested in Hadoop. In a recent webinar we shared preliminary findings that more than 50% of the participating organizations are using Hadoop, planning to use it or evaluating it. The research also shows that nearly half the organizations using Hadoop are using more than one distribution, which suggests that existing distributions are immature and incomplete. So the fundamental premise of Hortonworks addresses a real market need. The main question will be whether Hortonworks can harden the Apache distribution quickly enough to attract market share sufficient to survive and thrive. Since it is committed to the open source model in which software is available for free, revenue will come only from training and support services. Initially, Yahoo will be Hortonworks’ primary customer, providing Tier 3 support, but the new entity will be competing with others such as Cloudera that offer training and support services for Hadoop.

A secondary question is whether Hortonworks’ entry into the market will disrupt other players. On one hand, nothing has changed – Apache Hadoop is the basis for the offerings from Cloudera, EMC and MapR. Where these vendors have found the Apache distribution lacking, they have made improvements and then either contributed the changes back to the Apache project or offered the improvements as proprietary extensions of or replacements to the Apache distribution. On the surface this model can continue uninterrupted. As the Apache distribution gains more features, others can continue to add value elsewhere. However, if the Apache distribution were to gain enough features rapidly enough, it might possibly take the market away from other vendors before they have built a sufficient customer base to fund their ongoing activities. I suspect the Hadoop market will continue to grow rapidly enough that several vendors can survive and that one vendor’s success will not, in the near term, cause the demise of another.

I’m somewhat surprised by Hortonworks’ choice of business model – choosing to go with a purely open source licensing scheme. I haven’t done empirical research, but I sense that most commercially successful open source companies also offer a premium (often called “enterprise” or “professional”) version of their product for which they charge a licensing fee. This combination of open source and premium product is referred to as an “open core” licensing model. I imagine Yahoo sought to maximize the value of its investment in Hortonworks, and obviously the owners could later change the business model, but given the prevalence of open core and the potential for higher margins associated with software license revenues, I expected that kind of business model.

Hortonworks has some things in its favor. Our research shows that the Apache distribution is most prevalent: 63% of organizations that use Hadoop have it as one of the distributions they use. However, Cloudera was a close second with 55%, which gives some credence to the open core approach. Hortonworks begins with some top engineering talent, but those experts will need support from experienced software executives to help manage the business. The company also potentially inherits Yahoo’s presence in the Hadoop market. Yahoo has been hosting the Hadoop Summit for years, contributing to the Apache distribution and sharing its knowledge of Hadoop from its internal usage by more than 1,000 users. We expect a close working relationship however it is structured.

As we discussed in the webinar last week, Hadoop technology is not yet mature. That organizations are drawing from multiple distributions suggests that no one has a lock on the market yet. Regardless of how big this market turns out to be, these are its early days and there is plenty of time for Hortonworks to grab its share.

Regards,

David Menninger – VP & Research Director

InetSoft is a business intelligence vendor that is not well-known but has more than 3,000 customers. Why do you need to know about another BI vendor? As I’ve written in the past, there’s a place in this market for both the megavendors and smaller vendors. InetSoft, one of the latter, has developed a broad set of capabilities over the years that have resonated with its customers. It recently announced and brought to market a significant new release, Style Intelligence 11.   

InetSoft’s BI capabilities include dashboards, visualization, enterprise reporting and access to a variety of data sources. While previous releases delivered these capabilities in separate products, Style Intelligence 11 integrates them all into a single product. InetSoft has also architected its components to make them reusable and sharable. The product provides a range of capabilities: Style Report for reporting, Style Scope for dashboarding and visualization, and Style Intelligence, which includes all these capabilities plus advanced data source connectors for OLAP and ERP access. In addition Style Studio integrates a range of these capabilities into one framework for rapid assembly of analytics and information for meeting specific application needs. 

The reporting capabilities in Style Report include drag-and-drop report creation of pixel-perfect production reports as well as interactive reports and ad-hoc reporting. Report layout is flexible and can be made interactive with scripting of business logic via JavaScript that is linked to different events and elements within the report. A library of over 30 different chart types provides a starting point for many common types of reports. Reports can be viewed interactively in real time or as self-contained extracts of data, which is useful when working offline. The product also includes scheduling, bursting, clustered reporting and auditing, features often found only in high-end products. 

InetSoft’s dashboarding with Style Scope also includes the interactive visualization and data exploration capabilities as well as more traditional portal-style displays using graphical objects such as tables, charts, gauges and maps. Visualization includes a variety of interactive multidimensional chart types as well as brushing to highlight selected data elements in multiple related views. The dashboard components can also be used for both input and output. So in addition to displaying data, the dashboards can be used to gather it, thus enabling what-if capabilities. Email alerts and notifications can be generated including dashboard snapshots that enabling viewing offline; this overcomes one of the common downsides of dashboard-based applications. 

The InetSoft architecture reflects the maturity of the product gained over 15 years of development. Several performance and scalability features are built into the product, such as connection pooling to minimize database resource requirements and clustered deployments for increased scalability. The data access architecture, referred to as Data Blocks, provides data mash-up capabilities for rapid prototyping and self-service data integration. An intelligent caching scheme provides enhanced performance when accessing remote data. InetSoft also provides built-in connectivity to a variety of data sources including relational databases, OLAP cubes and applications from salesforce.com, SAP, PeopleSoft, JD Edwards and Siebel. In addition, InetSoft incorporates a security model that provides fine-grained access down to the cell level for users, roles and groups. It also supports single sign-on to leverage existing security models and makes it easier for authorized end users to access the system. 

To broaden its market further InetSoft needs to make additional investments in mobile capabilities. The current product, although browser-based, has no specific mobile capabilities and uses Adobe Flash technology, which would make it difficult to support Apple iOS devices such as the iPad and iPhone which is now emerging as more important though could operate on other smart phones and tablets from Android, HP and RIM. OEMs constitute about half of InetSoft’s business today, based in part on how easily this J2EE application can be embedded in other software systems. And while the product appears ready for the cloud with multitenancy and clustering capabilities, there is no cloud version yet but most of the BI vendors do not offer it either. I suspect the OEM market might begin to demand both cloud and mobile capabilities as identified in our recent business analytics research. 

All in all, InetSoft offers a broad set of business intelligence features in a well-integrated, lightweight architecture. Its ability to provide rapid assembly of analytics and information is what our research into information applications and business intelligence has found to be critical for business analysts to meet the pressing needs for publishing information. This approach of application assembly is not found in most of the BI vendors products today and is a key differentiator for InetSoft to help organizations deliver business analytics in a simple and usable form. It isn’t the biggest, most established vendor in the market, but it does have a product proven by thousands of customers already. For those of you looking for an alternative for your BI needs, InetSoft may be worth considering and easy to take a look at the product here. 

Regards, 

David Menninger – VP & Research Director

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