Profitless prosperity: Can tech vendors make money? Analysts weigh in


As the DataWorks Summit 2017 EU, kicked off in Munich, Germany today, there is a new rebranding of sorts surrounding open-source data. This event, presented by Hortonworks Inc., has changed its name from Hadoop Summit, which indicates an industry trend of transitioning from the open source world to the big data world.

“It’s a small European event for Hortonworks and the ecosystem, but it’s called DataWorks 2017. … The name Hadoop is being sunsetted at these events, which is a big theme this year — the transition of Hadoop being the branded category to [being called] data,” said John Furrier (@furrier) (pictured, left), co-host of theCUBE, SiliconANGLE Media’s mobile live streaming studio. (*Disclosure below.)

Furrier along with his co-host and Wikibon analyst Dave Vellante (@dvellante) (pictured, right) began the event discussing the branding transition and what is important for vendors to know to make money in the large-scale ecosystem.

Profits for practitioners — not technology vendors

Vellante noted that we are deep in the era of “profitless prosperity,” as he cited the Cloudera Inc. initial public offering. He believes companies like Hortonworks and Cloudera are seeing the industry transforming, where practitioners are the money makers and the technology vendors are in a profit-losing situation.

“For every $1 each of these companies spends … they lose between $1.70 and $2.50. We’ve always said at Wikibon, the people who are going to make money in big data are the practitioners of big data,” Vellante said.

According to Furrier, “Profitless prosperity is right, but I think that it is longevity with these companies because the ecosystem is robust. If you factor in the ecosystem revenue, that is enough rising tide, in my opinion. The question is how do they become successful as a standalone venture? I think you are going to see a quick shift and pivot quickly back to business-building.”

The chatter at the DataWorks Summit is centered around doing deals and deployments, Furrier pointed out. And while the latest technology talk is happening, it is not the real topic of discussion.

“Is it the same wine, but in a new bottle, or is this really a shift toward new innovation ?” Vellante asked.

Furrier believes it is not a new shift and it is the same innovation. According to Furrier, Hadoop is just the horse Hortonworks rode in on. Data is still at the heart of the company.

The real test for these businesses will happen when customers put projects on the table and they have to produce value. The total cost of ownership and deriving business outcomes will drive the market. And, according to Furrier, that is becoming a data-specific thing.

“You are seeing a focus on cloud integration and real-time workloads. These are real projects — not fantasy or hype or early adopter. These are companies saying that we are moving to a new paradigm in transforming our companies to digital, and we need cost efficiencies and revenue-producing applications and workloads with data at the heart of it,” he said.

For Furrier, this is the real deal, and he is confident that no hubris, no technology posturing, no open-standard jockeying can right the situation. “Customers have demands, and they want them filled,” he said.

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.)

Photo: SiliconANGLE