HDP News

And it’s one way that markets do their job of eliminating unnecessary profits.

Not so sure. The way I see is, when AIX, Solaris, HP-UX were dominating the Unix world, each company had to employ army of programmers and when someone released a feature or option then others have to reinvent the wheel. Is it efficient? Probably not. But it allowed employment of large folks. Not only in development side but even in support because each release had its own quirks.

Now with Linux, folks contribute freely and companies don’t have to employ army to develop, they still make their support money. The way I see their margins have gone even further up, while price may have come down. The other beneficiaries are companies who consume these things.

The labor got screwed on its own volition.

With the availability of open source it’s much more difficult to become a “gorilla” because you don’t have a legal lock on the product. Gorilladom now comes from getting the network effect to work in your favor.

If you consider number of installations as “network effect” yes it is the new moat. Not many companies are going to switch from “RedHat” to “ubuntu”. There are other vendors support say for ex: Until 2016 ubuntu was not widely supported by Oracle.

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My point is that Hortonworks does NOT get revenue from Hadoop like M$ gets revenue from licensing Windows or Oracle gets revenue from licensing their database.

Let us take Oracle as an example. Oracle database license is a perpetual license. So you are free to use license for the rest of your life. Then how does oracle make money? Of course by support. They charge close to 25% of the original licensing fee as “support fees” this allows the customer to get bug fixes, upgrades to newer versions, etc. Of course oracle introduces new features or “options” as they call in newer versions and they charge for the use of those “options”. Some features become standard in subsequent versions and some not.

Now if you look at HDP, they are not employing an army like Oracle to develop their product, but they still invest in testing, and adding additional features and staff to support their customers. In terms of revenue HDP also going to charge you a licensing fee, and a support fees.

Because it is not proprietary and there are other players in this early stage what they charge is less. But the model itself is not that far away from Oracle’s.

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You are looking at it from the customer’s point of view. When I wrote “free” I was looking at it from an investor’s point of view. My point is that Hortonworks does NOT get revenue from Hadoop like M$ gets revenue from licensing Windows or Oracle gets revenue from licensing their database. This means one should not use M$ or Oracle as a model for Hortonworks.

It’s both true and untrue. Open source can charge a subscription fee for releasing their flavor of thoroughly tested open source software integrated with various other popular modules/libraries from the larger ecosystem. This is more true for complex enterprise software. It saves the companies the cost of doing it themselves. Subscription cost though usually much lower than proprietary software. This along with flexibility and transparency is major selling point of open source.

RedHat charges for RHEL for its distribution of Linux. Another example - Python programming language is open source, and anyone can download it from www.python.org. But still there are companies which integrate it with a few hundred popular libraries built on top of it by various organizations/enthusiasts/Academics etc, test it thoroughly and distribute it a nominal cost. This is usually bundled together with support and training costs. They sponsor open source projects often funded by their customers themselves and contribute actively in maintaining and nourishing the open source ecosystem.

For enterprise software, there is a larger need of using open source software from a trusted vendor like RHT. In fact RHT has deals with several companies running into millions of dollars.
Can a customer simply walk away ? Yes and customers like that fact because they are not locked in with proprietary software and at the mercy of software vendor for costs escalation over the years. But in practice it is never so easy. There is a great deal of customization, implementation, knowledge that has gone in specially for enterprise implementations. Any decision to walk out is not easy and has huge transition cost to the customer. In this sense it is very similar to IBM or Skyworks which are deeply embedded in their customers processes and that is their moat.

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Back when PCs just started entering business they were cheap enough so that they could be purchased by low-level managers. We soon had a dog from every town (more like 50 dogs). It was a support nightmare and cost far more than the simple cost of acquisition. Now scale that up to multiple content management systems, multiple MRP systems, multiple . . . You get the picture? It was now costing big bucks to host and maintain and interface all these disparate, expensive enterprise systems.

They changed the rules. No business unit could buy s/w or h/w without going through architecture. We had a process where we would put together a team of users, IT folks, Finance, Procurement and occasionally others to perform evaluations and reach a consensus on which to buy. I was focused on life-cycle management of information (and it’s digital doppelganger, data). But we also had teams for desktop, network, etc.

The whole reason for the existence of architecture was to reduce the overall cost of IT by reducing redundancies, planning transitions, looking into the foggy future, etc.

It’s interesting for me to hear the other side of this story. My side, abbreviated, is:

The great thing about PC’s when they first came out was that we could just buy what we needed to get the job done. We didn’t need to get IT involved, so we didn’t have to wait for approvals and then wait for setup. We got things done. We could make changes to our environment ourselves to make things more efficient.
Then IT realized what was happening and inserted themselves. Now we had to buy from IT-approved vendors, which were the ones that were literally kicking back money to IT. IT justified this as reducing the company’s budget, but it was a shell-game - instead of allocating money directly to IT, IT was taking a cut of the higher prices every other department was paying. Then cloud services came along and were were able to find applications we needed on the web, yet again by-passing IT in order to get things done. And now IT’s trying to insert themselves into purchase decisions of those applications…

One thing that’s interesting, is that the above story was carried across 4 different companies. Yet, how IT worked and changed was seamless across the companies, so my conclusion is that almost everyone was moving at the same pace, and IT was continuously trying to catch-up. And the tension between groups doing direct work and IT was always the same: from our POV the IT group was not considering itself a service organization to other groups in the company as much as it was trying to make itself more efficient and cost-effective. I believe an overall company perspective, however, would be that you want the groups doing the things that your company makes money off to be efficient, and to have IT do whatever they could to support that, not to overly regulate that.

Sorry for the side-bar.

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Second, MapReduce allows Hadoop to be queried via SQL.

Apache Hive which is part of Hadoop open source also allows SQL like querying. It is not just MapReduce, even Oracle has a BigData solution that works with hadoop and allows SQL querying.

My basic feeling on this issue is that if companies still need SQL and depend on SQL, then it won’t really adopt Hadoop

This is true for most young companies. But many consulting companies and big IT shops even many enterprise power users have deep SQL skills. The ability to leverage that skill is a powerful force rather than re-train them.

Over the decades I have seen it is difficult and takes time to retrain folks, your sincerely included.

The urge for a SQL interface is not mere entrenchment or fighting the trend, but a matter of the existence of other data in the company in software where the natural interface is SQL and the desire to use reporting tools to access across multiple data sources and the reporting tools generally rely on SQL. This is the whole point behind Data Direct Cloud which can combine data coming from in-house and internet sources which are SQL, no-SQL, or which have specialized interfaces like SalesForce.