MapR is selling its assets to HPE, marking end of an era for Hadoop

Hewlett Packard Enterprise is buying the assets of MapR, signalling the end of the Google-backed startup.

MapR had announced in May that it was cutting 122 jobs and planning to close its Santa Clara, California headquarters. The company had said it was “pursuing a strategic transaction.”

The sale highlights the struggles of big data companies offering Hadoop-based services, such as Cloudera, whose share price recently dropped.

MapR is selling its assets to Hewlett Packard Enterprise, signalling what could be the end of the road for the Google-backed startup that raised $280 million but has struggled recently to stay afloat.

The announcement comes two months after MapR essentially disclosed that there was a very real possibility that it could shut down.

The company said in May that it was “pursuing a strategic transaction” that would allow it to keep its Santa Clara, California headquarters open. It also gave notice to the state of California that it planned to cut 122 jobs which MapR had also classified as “permanent.”

MapR also said at the time that it had received “more than one letter of intent from interested parties, and today is engaging in the due diligence process in a transaction which, if consummated, may eliminate the need to close the Santa Clara site.”

After that, nobody heard anything of any substance about the fate of MapR — until Monday, when the HPE deal was announced.

The financial terms of the HPE deal were not disclosed. The fate of MapR employees and the company's headquarters also was not clear.

Employees' fate uncertain

“A number of MapR employees” are expected to join HPE's storage business unit, although it's unclear how many will be asked to stay, an HPE spokesperson told Business Insider.

“We are still finalizing transition plans and aren't able to share numbers at this point, but retaining key MapR talent is a huge priority of this acquisition,” the spokesperson said.

On MapR's headquarters, the company representative said: “We will be evaluating the real estate situation over the coming weeks as we finalize integration plans.”

Founded in 2009, MapR emerged as a leading cloud platform that enables businesses to store and manage huge data workloads using artificial intelligence and big data-analytics tools, such as Hadoop.

In fact, the deal highlighted HPE's interest in beefing up its data management and analytics capabilities as the tech giant strives to beef up its position in the enterprise cloud market. This is important as HPE struggles to expand its reach in the cloud, where it has been outpaced by such rivals as Amazon, Microsoft and Google.

HPE said it was acquiring MapR's “technology, intellectual property, and domain expertise in artificial intelligence and machine learning and analytics data management.”

“The explosion of data is creating a new era of intelligence where the winners will be the ones who harness the power of data, wherever it lives,” HPE CEO Antonio Neri said in a statement.

Hadoop woes

The sale of MapR's assets also highlight the rapid changes in the way data management and processing in the enterprise. Hadoop, which offers the ability to sort through data from diverse sources with exceptional speed, had been the hot trend in enterprise computing when MapR was first founded in 2009.

The startup and Cloudera were long considered to be among its leading providers. MapR was even starting to plan for an IPO, it was reported in 2017.

But then new cloud technologies, led by AI and machine learning, outshined Hadoop as a way to sift and make sense of data.

When it announced the planned layoffs, MapR said in a statement to Business Insider that the company “has been moving aggressively toward a more efficient business model.”

That was going to be tough given the way the market had shifted.

“Hadoop's future has definitely taken a swerve,” analyst Steve Allen of S2C Partners told Business Insider. “Hadoop is under siege and it appears that this time, due to new weapons and cloud technology, it will finally be unable to hold its own as an independent technology. It will become a vassal to their new overlords, the cloud people.”

The rise of AI and the expansion of cloud computing, he said, made it possible “to make good inferences” and “to do this quickly enough for your predictions to be relevant,” he said. This made Hadoop, which he compared to “a large warehouse where you stored files,” less appealing.

Allen also speculated that Cloudera “will continue to suffer.” Cloudera, the leading Hadoop company, recently went through some turmoil, marked by a drop in its stock price and the departure of CEO Tom Reilly. Cloudera also announced that it will make all its software available as open source, embracing the business model of Red Hat, which IBM just acquired for $34 billion.

Hadoop as component of AI

Justin Norman, Cloudera's director of research and data science services, offered a more upbeat view of Hadoop and its future in the enterprise cloud. Hadoop is a “a complimentary component to AI” that enterprises can use to develop more capabilities in analyzing data.

But he also acknowledged that the rise of AI and machine learning did create some confusion.

“A lot of customers we speak to are really worried,” he told Business Insider. “A lot of times they end up saying, 'Did we miss the boat？' or 'Did we invest in the wrong thing？' … The largest challenge is that people are really scared that they've gone in the wrong direction.”

But Norman stressed: “A lot of times that's really not the case at all,” since Hadoop and AI are complimentary.

In fact, HPE's decision to buy MapR's assets shows there's still value to be found in Hadoop.

“HPE has a very poor record of making company acquisitions, so just buying the intellectual property should have a far better outcome than if they'd bought the company,” analyst Rob Enderle of the Enderle Group told Business Insider. Buying MapR's technology, he said, “could simply add to the number of choices HPE provides.”

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