The Hadoop/NoSQL market topped $540 M in vendor revenues in 2012 and will grow at a 45% CAGR to $3.5 B in five years, not including hardware revenue, predicts Wikibon Big Data Analyst Jeff Kelly. While the vendor mix ranges from startup pure-play developers such as Cloudera and 10Gen to dominant vendors such as IBM and EMC, no single vendor dominates the market and six companies hold 7% or more of the market each. The top three in 2012 were MarkLogic (13%), CloudEra (10%), and IBM (9%).

The vendors are also diversified in their business models and revenue sources. IBM and EMC have priced their software very aggressively to build their services and support business. HortonWorks gives away a pure Apache Hadoop platform and also makes its income from services, while Deloitte and Accenture are, of course, pure consulting businesses. On the other hand several vendors including Aerospike and the NoSQL database companies, depend on software sales as their main source of income.

The market is being driven by enterprise demand for more flexible, scalable, and affordable alternatives to the traditional RDBMS vendors. Market growth, however, may be bounded by a lack of skilled Big Data practitioners who know how to derive maximum value from the technology. This opens the door for Hadoop/NoSQL software appliances and cloud-based analysis services.

While Hadoop has been garnering a great deal of press, the NoSQL market is actually slightly larger and growing faster, so that the aggregate market is growing faster than the Hadoop portion, Kelly writes. Revenue for NoSQL software and services totaled $286 million in 2012, growing to an expected $1.825 billion in 2017. The Hadoop market totaled $256 million in vendor revenue in 2012 and is expected to grow to $1.650 billion in 2017.

Wikibon predicts that the market will enter a period of vendor consolidation in the next 1-3 years as the big vendors start acquiring the startups. This is both good and bad news for users. On the one hand, a vibrant ecosystem of independent pure-play vendors provides corporate users with numerous choices, deployment models, and capabilities. On the other hand, consolidation will greatly simplify the environment, which today is characterized by complex partnership and reseller arrangements.

Users should evaluate potential technology or service suppliers in this market not just on technology but also their business models, commitment to open standards, and long-term viability. They should expect significant market disruption over the next three years.

As with all Wikibon analysis, Kelly’s complete report is available without charge on the Wikibon Web site. IT professionals are invited to register for free membership in the Wikibon community. This allows them to comment on the research and publish their own questions, tips, Professional Alerts, and longer research papers on the site. It also gets them invitations to the periodic Peer Incite meetings at which their peers discuss how they are using advanced technologies to solve business and technical problems.