Cloudera Raises $25 Million in New VC Money

Palo Alto, Calif.-based Hadoop startup Cloudera has raised another $25 million in funding, bringing its total funding to $36 million in three rounds. Meritech Capital Partners led the Series C round, with existing investors Accel Partners and Greylock Partners chipping in, as well. The new funding bolsters Cloudera’s position as the hub of the commercial Hadoop world, as well as the beliefs of many data experts that Hadoop will become the centerpiece of many Big Data efforts in the near term.

As organizations of all types try to squeeze more insights from their mountains of unstructured data, they need new tools, and Hadoop has become a popular choice. The Apache Software Foundation drives Hadoop development, but Yahoo (s yhoo) and Cloudera each offer their own distributions. What makes Cloudera unique is its mission to make it as easy as possible for organizations to build and manage Hadoop clusters. As a recent survey illustrates, learning to harness the power of Hadoop is notoriously difficult for Big Data laypersons, and Cloudera is the only vendor offering a Hadoop distribution complete with advanced management tools and commercial support.

Thus Cloudera’s position as the Hadoop hub, with the spokes being an ever-increasing number of database, data warehouse and business intelligence ISVs that have integrated their products with Cloudera-based Hadoop clusters. Cloudera’s customer count is piling up, and any analytics vendor wanting to get a piece of that market is wise to attach itself to Cloudera’s efforts.

But a lack of competition doesn’t mean Cloudera doesn’t need this funding. For one, as CEO Mike Olson explained during a recent call, although interest in Hadoop is high, there’s still a lot of education required to inform the market what it really is and how it might help them. Furthermore, Cloudera does have competition up the stack. Yesterday, for example, IBM (s ibm) officially transitioned its InfoSphere BigInsights software from research project to commercial product. BigInsights uses Hadoop to analyze data, but abstracts the process to the point where users need not even know it’s in use, then returns results in a variety of popular visual formats. In theory, a company using BigInsights to tackle its analytic workloads need not even build its own Hadoop cluster per se.

On a larger scale, this latest $25 million could have major repercussions across the Big Data landscape. Large vendors, especially, need to develop their Hadoop strategies as customers’ appetites for highly scalable, advanced analytics products grow, and this money (along with the subsequent growth) will drive Cloudera’s valuation even higher than the $100 million Om suggested last month. IBM has its strategy, as does Microsoft (s msft) (with Dryad), but that’s about it. Although CEO Olson says Cloudera won’t be posting a “For Sale” sign anytime soon, that doesn’t mean someone won’t come courting. Now more than ever, it looks like Cloudera can command a high price for its independence.

Image courtesy of Flickr user AMagill.

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