Big Data is still producing big losses for Hortonworks Inc. as lower-than-expected revenues caused its stock to plunge more than 25 percent in trading today after the market close.

The company’s president since 2012, Herb Cunitz, also is leaving. Hortonworks, one of the few publicly held Big Data companies, said Cunitz will be seeking a chief executive position elsewhere. But he was the executive in charge of sales, so the departure appears to be related to the revenue shortfall.

The company, which makes software for storing and running applications on massive amounts of data, reported a second-quarter loss of $64.2 million, or $1.12 per share, compared with a loss of $43 million a year ago. Even without certain costs such as stock compensation, the loss was 72 cents a share, down from an 82-cent loss a year ago. That was 2 cents higher than analysts’ expectations.

Revenues jumped 46 percent from a year ago, to $43.6 million. That was only a bit under analysts’ average forecasts of $45.2 million, but investors have been accustomed to estimates getting beaten. Chief Executive Officer Rob Bearden (pictured above) said on the earnings conference call that some salespeople didn’t deliver on expected deals. “At the end of the day, we didn’t outpace our billings expectations,” he said. 

Bearden said sales will now report to him “indefinitely” as the company plans to keep closer tabs on deal flow during quarters. He also said the company is shifting its most effective revenue-generating salespeople to key accounts. Those not producing revenues were fired and will be replaced with those the company believes will be more effective. “There’s no doubt we must substantially tighten up our process of deal management,” he said.

Not surprisingly, investors were far from impressed. Hortonworks shares fell more than 25 percent in after-hours trading, to about $9.40 a share. They already were down more than 40 percent from the start of the year.

The shortfall spooked investors despite Bearden reiterating a previous forecast that in the fourth quarter, the company would hit break-even on earnings before taxes, depreciation and amortization. For the third quarter, the company said it expects revenue to be $45 million, only slightly above the current quarter. It also expects operating billings, by which it means the total value of all invoices, to hit $68 million.

For the full year, its estimate is $177 million in revenues–noticeably below the $190 million it forecast three months ago. That’s the result of a previously noted increase in multi-year deals that “we expect will impact the contours of our revenue growth trajectory starting in the second half of 2016,” the company said, an apparent reference to less revenue getting recognized near-term. Operating billings are forecast at $265 million for the year, the same as forecast in April.

Like other Big Data software companies, especially those such as Cloudera Inc. and MapR Inc. that also offer Hadoop and related software for storing large amounts of data and running applications on clusters of computer servers, Hortonworks faces an ever-increasing roster of new challengers. They include both a rapidly growing group of startups chipping away at Hadoop with faster or more efficient technologies and cloud computing vendors such as Amazon Web Services and Microsoft Azure that offer similar capabilities in their clouds.

Bearden sought to downplay the impact of competition. He said that in head-to-head contests on deals, Hortonworks wins about 90 percent of the time.

Some other startups continue to see outsized success. Big Data software firm Talend SA went public last week and its shares shot up 50 percent the first day. The privately held Big Data-as-a-service startup Qubole Inc. doubled its second-quarter revenues from a year ago, CEO and cofounder Ashish Thusoo said in an interview, though he declined to provide precise figures.

Bearden, however, repeatedly pointed to the internal sales issues as the main problem in the quarter. Chief among those is thin coverage in some geographic areas, especially Europe, the Middle East and Africa, areas he plans to beef up with more salespeople. But they can take seven to nine months to get productive, the company said. That could create “somewhat of an air pocket for the next two quarters,” Barclays analyst Raimo Lenschow said in a note to clients.

A broader issue is the growing complexity of Big Data offerings, which has appeared to slow down mainstream adoption of Hadoop and related technologies. That’s driving more corporations to cloud computing vendors that can offer a faster, simpler way to wrangle their data than setting up their own clusters of servers that require lots of experts to configure and run Hadoop. The result, said George Gilbert, an analyst with Wikibon Research (owned by the same company as SiliconANGLE), is that “the very services that define the core of Hadoop are being swapped out.”

Although Hortonworks’ own cloud offerings are getting simpler too, which could attract more customers, Gilbert said that could hurt their business in the short term because the company gets paid by the hour for those services. “They can’t bill for two- or three-year deals when in the cloud, so their cash flow could look even worse as customers shift to the cloud,” he said.

Analysts also wondered if Hortonworks’ results indicated that the market might not be as large as they had expected. Bearden insisted market growth remains strong. “We’re solidly convinced of no change whatsoever with adopting Hadoop in the enterprise,” he said.

SiliconANGLE Media co-CEO John Furrier spoke recently with Bearden on theCube, owned by the same company as SiliconANGLE:

Photo by Robert Hof