Some analysts speculate that Cloudera Inc.’s initial public offering will see the company’s valuation severely lowered. Does this reflect reality, or is it an illusion created by a market that can’t yet measure the value of open-source communities?
“The ecosystems of open source are now going through a dimension where they’re not yet valued in the classic sense,” said John Furrier (@furrier) (pictured, left), co-host of theCUBE, SiliconANGLE Media’s mobile live streaming studio. (*Disclosure below.)
Open source’s “profitless prosperity” could turn into an indirect engine of value via the organic developer community building businesses, Furrier told co-host Dave Vellante (@dvellante) (pictured, right) during the DataWorks Summit taking place in Munich, Germany, today.
There are already examples of open-source communities foregoing the old partner-re-seller model and finding novel paths to profitability, Furrier said, citing FinTech as an example.
“These startups became financial services businesses that became FinTech suppliers to banks,” he said. Similar “net present value” could live under the covers in other open-source communities, unbeknownst to investors, Furrier added.
“You could argue that Hortonworks is undervalued as a company, because they’re not realizing those gains yet or those gains can’t be measured,” he said.
The salesforce advantage
Nonetheless, Furrier and Vellante agreed that established companies with experience selling to enterprises have a huge advantage over open-source and younger cloud players like Google.”These Hadoop startups are seeing that. None of them are making money,” Vellante said.
Any open-source community or cloud startup that thinks it will make money by offering self-service to enterprises is mistaken, said Furrier.
“An AdSense salesforce doesn’t work in the enterprise,” he said. Companies like Google Cloud would be smart to acquire a company with a large, experienced salesforce and fold them into its overall business, Furrier stated.
Watch the complete video interview below, and be sure to check out more of SiliconANGLE’s and theCUBE’s coverage of DataWorks Summit 2017 EU. (*Disclosure: TheCUBE is a paid media partner at DataWorks. The conference sponsor, Hortonworks, does not have editorial oversight of content on theCUBE or SiliconANGLE.)