The New Cloudera and the emerging data analytics story
Updated: Oct 10, 2019
Recently, I attended the Cloudera Global Analyst Event in New York. The event, held near Hudson Yards, was well attended with analysts across several research firms in attendance. The event was collocated with Cloudera’s Customer Advisory Council meeting and this meant that Cloudera was able to draw on an impressive line-up of speakers from across several verticals to speak to the analyst community. On the face of it, I was in a small minority as a telecoms and mobility analyst lost in a sea of analysts covering big data and analytics. However, the presence of Globe Telecom and other customer presentations offered significant insight into the telecom and other verticals.
The “New Cloudera” has doubled down on its product strategy
Cloudera’s origins are in Palo Alto, in the Bay Area of the United States where they are currently headquartered. The company is known for its leadership role in the area of data analytics with its Cloudera Distribution for Hadoop product, with subsequent moves into data warehousing, artificial intelligence (AI) and machine learning. In late 2018, amidst a flurry of M&A activity by companies in the big data and analytics space, Cloudera merged with HortonWorks in an all-stock merger of equals a view to creating an “Enterprise Data Cloud from the Edge to AI”. Other recent acquisitions include Fast Forward Labs in 2018 and more recently, the acquisition of Arcadia Data to improve Cloudera’s ability to deliver actionable insights for customers with large and complex data sets.
Before the merger, both Cloudera and Hortonworks were under significant pressure, not only facing off against each other in an expensive battle for customer acquisition but they were also in a relative struggle against the public cloud giants like Amazon and Oracle. The new Cloudera performance post-merger with Hortonworks took a significant dip in the two quarters post the merger, with significant work done to streamline product overlaps and map out the new roadmap and strategy. A sharp deceleration in Q1 of 2019 prompting a leadership and strategy change. However, the company has reported significantly improved results in its most recent quarterly earnings, with $682 million in annualized recurring revenues (ARR), 86% gross margin and slightly over $500 million cash in hand. The company had several major announcements linked to a new partnership with IBM, the announcement of an open-source licensing and distribution framework, the acquisition of Arcadia Data and finally, the big one, the launch of the Cloudera Data Platform.
The Cloudera Data Platform (CDP) is an attempt by Cloudera to address several pain points that are emerging for enterprise IT teams as they attempt to execute on their digital transformation strategies; get to grips with the increasingly complex IT and application landscape and drive actionable insights from the ever-increasing weight of data collected from across their business. Enterprises are looking for ways to manage data and workflow across their data centers, multi-cloud and hybrid environments in a secure manner, all while avoiding vendor lock-in. This is a tall order but also precisely what Cloudera is attempting to address with the CDP, a platform that combines data warehousing, machine learning as well as Cloudera Data Hub, a cloud-native data management and analytics service. Besides taking the analysts through the product strategy and roadmaps, Cloudera accorded priority to customer viewpoints during this event and the presentations from major customers like GlaxoSmithKline (GSK) and Globe Telecom made for a compelling statement on Cloudera’s traction within several verticals.
Cloudera’s Significant Traction in Telecoms
One of the highlights of attending technology vendor events is the ability to listen to perspectives from their key customers. Not only do these sessions offer validation of the vendor’s roadmaps and overall strategies but they also offer the analyst community valuable insights into the specific business and how the product offering is solving real-world problems and pain points. As mentioned earlier, amongst several presentations by Cloudera customers and partners, Globe Telecom from the Philippines was represented by a senior executive in Gil Genio, their Chief Technology and Strategy Officer.
The telecom vertical is, in many ways, the perfect canvas for Cloudera to paint on. Communication service providers and mobile CSPs are typified by the twin problem of incredible amounts of data generation that can rarely be monetized. CSPs generate data from countless network elements and reams of operational and billing systems. Many of these data streams come from a host of incompatible legacy systems that do not talk to each other and certainly do not do this in real-time. There are also new and emerging data sources from IoT and connected devices in the connected car, home, smart city, and other use cases. On top of this, the intense regulatory oversight and scrutiny that is typical of the telecoms industry have meant that even in situations where the specific CSP has managed to corral all of its data sources together, it may still not be able to monetize their vast data resources.
As CSPs have grappled with how to come to grips with the “big data” flowing across their networks, they have typically focused on a few key use cases. These include internal use cases like tracking and monitoring of network elements to proactively identify and monitor potential network failures, as well as for tracking customer sentiment to drive favorable net promoter scores (NPS). Globe Telecom has traveled this well-worn path and has been an early customer for Cloudera in a sector where Cloudera seems to have penetration amongst all the top ten CSPs as their customers.
The Globe Telecom Case Study
Globe Telecom is a leading CSP in the Philippines, an emerging market characterized by an overwhelming 97% of their subscriber base on prepaid generating an average revenue per user (ARPU) of barely $1 per month. In a country where there is no national identification system at present, subscriber acquisition happens over a variety of channels, many of them not organic to the CSP. The implications of this ground reality are numerous but the most important takeaway is that in a market where margins are wafer-thin and subscribers are very cost-conscious and probe to tariff arbitrage, Globe needed to collect actionable intelligence on their customer base in order to first improve the customer experience and then ultimately, shore up NPS and 2protect their revenue base.
Globe Telecom is faced with many data-related challenges. Beyond the fact that there are multiple sources of data collection due to the prepaid oriented nature of the market, Globe was faced with rising costs of storage and data warehousing appliances. They were also struggling with performance issues when it came to analytics performed on very large data sets. Indeed, Globe was struggling to ingest 312 billion records (300 GB) daily or real-time fraud and other analytics. With the Cloudera partnership, Globe has been able to completely transform their data strategy and execution. With Cloudera, Globe is now able to manage very large data sets, with 16 terabytes ingested per day and up to 40 terabytes per day from streaming data. Globe has been able to migrate to an environment where they can do self-serve analytics, generate real-time recommendations and more.
With these new capabilities, Globe has focused on several use cases, both internal and external, all to improve customer experience (CX). Improved customer intelligence has enabled Globe to drive revenue by lowering customer churn to competitive CSP offerings. Globe is also able to respond in real-time to competitor offerings, loan airtime to customers and other measures that are geared towards enhanced CX. Globe has also focused its attention on their network to drive CX improvements, with use cases like proactive care for customers with known network events, workflows to help users with their migration to 4G service and so on. For Globe, the Cloudera partnership has thrown up many benefits. Besides the massive advancements in data management and analytics, the open distribution has meant that Globe has avoided black box platforms and lock-in. Globe has been able to standardize the data experience on all internal environments and ensure that these are interactions are secure and compliant with governance frameworks. Most importantly, CDP has allowed them to manage all self-serve experiences and data hub clusters through a single control pane. The importance of this last point can’t be understated as Globe has over three dozen legacy systems.
The beginning of the beginning
All in all, the Globe case study was a good validation of the power of the Cloudera platform to help these customers with their increasingly complex journeys with data. Within the Telco space, beyond Globe, Cloudera does support a wide variety of use cases for a number of global customers including BT, T-Mobile, Deutsche Telekom, Telefonica, Bharti Airtel, XL Axiata amongst others.
Besides, Globe, GSK and other customer examples also highlighted the urgent need for enterprises to make key decisions today if they hope to cope with the data deluge and steer a path to a hybrid, multi-cloud, multi-function architecture that is also secure and built on open source. The platform choices they make today will also be key in helping them cope with the next wave of data generation that will result from the increasing usage of the Internet of Things (IoT) and the multiple sensors, robots and other endpoints that enterprises across sectors are increasingly deploying. There is no question that much of this data will need to be managed using AI and ML models and technologies.
Ultimately, the biggest takeaway from an analyst event like this one was that in many ways, we are at the beginning of the beginning when it comes to data management and analytics. Enterprises who have embarked on these journeys will have multiple options to choose from and the road ahead is a long one. Choices made today will have enormous implications for future success and the ability to stay competitive and differentiated.