Cloudera IPO Highlights The Big Data And Hadoop Opportunity

Last week, Cloudera successfully completed an IPO, raising $259 million of equity capital, including the over-allotment option. Shares were priced at $15 per share and traded up to over $18 per share on the first day of trading, giving investors a 20%+ return.

Cloudera describes itself as a company that “empowers organizations to become data‑driven enterprises in the newly hyperconnected world.” Cloudera, founded in 2008, was the first commercial Hadoop player and is a Leader in Mike Gualtieri and Noel Yuhanna’s The Forrester Wave™: Big Data Hadoop Distributions, Q1 2016.

Last August, Forrester published its first Big Data Management Solutions Forecast, 2016 To 2021 (Global). In our forecast, we highlighted Hadoop as the fastest-growing sector, at a 32.9% CAGR over the 2016 to 2021 period. We estimate that firms will spend nearly $800 million on Hadoop and Hadoop-related services in 2017 and that this will grow to $2.3 billion by 2021.

In its S-1 filing, Cloudera reported revenues of $109 million, $166 million, and $261 million in the years ending January 31, 2015, 2016, and 2017, respectively. This represents 52% year-over-year growth in 2016, accelerating to 57% year-over-year growth in 2017. Cloudera’s customer base is primarily Global 8000 companies, accounting for 73% of revenues.

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Security Challenges Drive Growth For IAM Solutions

The world is changing fast, and bring-your-own-device (BYOD) and telecommuting are increasingly becoming the norm, not the exception. This increasingly mobile and flexible workforce creates new security challenges as more and different types of devices are being used in multiple locations. Security and risk professionals must ensure that only the right people get access to the right information at the right time and for the right reasons. Identity and access management (IAM) tools help evaluate who has authorized access to which resources and why.

In our recently published Forrester Data: World Identity And Access Management Software Forecast, 2016 To 2021 (Global), Forrester predicts that the IAM software market will grow to $13.3 billion by 2021, from $7.7 billion in 2016, implying an 11.5% CAGR.

While IAM has traditionally focused on access for employees and business partners, we actually expect customer identity access management (CIAM) to be one of the fastest growing IAM niches. CIAM requires a delicate balance between security measures that are strong enough but don’t detract from the customer experience. As a bonus, data collected by CIAM tools can help with customer retention and drive profitability. As companies learn to leverage this data, we expect 19.5% annual CIAM software growth over the next five years.

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Text And Geospatial Analytics Bring Growth And Innovation To Business Intelligence And Analytics Tools

We recently published an updated version of our Forrester Data: Business Intelligence And Analytics Software Forecast, 2016 To 2021 (Global).What’s new? We added two new forecast categories: text analytics and geospatial analytics.

■        Text analytics makes sense of unstructured data.Unstructured data, such as tweets, call center logs, and social media comments, provide an increasingly important view into consumer sentiment and trends today. Text analytics software facilitates the analysis of this unstructured data, allowing companies to mine these new data sources for insights. We project that the text analytics software market will grow 16% annually over the next five years.

■        Geospatial analytics harnesses the power of maps.Traditionally, geospatial analytics has focused on mapping data from geographic information systems (GIS). Today, we see an ever-expanding array of sources of geospatial data connecting customers and locations.Forrester believes theinternet of things(IoT) presents a massive opportunity for companies to uncover insights from spatial relationships, as every connected device can be located by some means. We forecast a 10% compound annual growth rate in geospatial analytics over the next five years.

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The US Leads In Public Cloud Services, But Other Regions Are Catching Up

Public cloud services are one of the biggest disruptions in the tech market in the past 15 years. In September 2016, my colleagues Andrew Bartels, Dave Bartoletti, and John R. Rymer published their latest public cloud services outlook, The Public Cloud Services Market Will Grow Rapidly To $236 Billion In 2020,projecting 22% annual growth in public cloud services over the 2015-to-2020 period. Explosive growth in cloud applications has depressed software license sales, and cloud platforms have upended the traditional on-premises server and storage market. The pure-play public cloud players continue to report fantastic growth: Amazon Web Services’ revenue grew 58% year-over-year in Q2 2016, and Microsoft Azure reported 116% year-over-year revenue growth in Q1 2017 (September). In response, traditional software and hardware vendors are moving to the cloud via both acquisitions and launches of new cloud services.

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Private Cloud Adoption Is Alive And Well

While public cloud’s hypergrowth garners a lot of press, we expect opportunities to continue for private cloud solutions. In our recently published Private Cloud Solutions Forecast, 2016 To 2021 (Global) we expect the market to grow at a compound annual growth rate (CAGR) of 11.0% over the 2016-to-2021 period.

Private cloud can provide the speed-to-market and scalability of public cloud, yet with enhanced security. Improved IT infrastructure manageability and flexibility are the key drivers of private cloud adoption. Many regulated industries, such as financial services, will continue to use private cloud due to security and regulatory concerns.

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Big Data, Big Growth, Big Promises

In the age of the customer, insights-driven businesses use big data solutions to gain business insights, create differentiated customer experiences, and drive competitive advantage. In our recently published Big Data Management Solutions Forecast, 2016 To 2021 (Global ), we take a more in-depth look at the software solutions to manage big data.

Big data management solutions address data sets that are so large and complex that traditional data processing applications are inadequate. Nonrelational databases are one of the key tools to manage and search the increasingly large and diverse types of data. Scaling is built into nonrelational databases, allowing them to support millions of users and hundreds of terabytes of data. The cost of a nonrelational database is typically only 10% of the cost of a comparable traditional relational database.

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Data Management Platforms Go Mainstream

The holy grail of digital advertising is accurately determining who to target, when to target them, and what products to highlight. Data management platforms (DMPs) facilitate smarter media buying by unifying data from multiple sources to allow more accurate and detailed audience segmentation. In our recently published Ad Technology (Data Management Platforms) Forecast, 2016 To 2021 (US), we take a more in-depth look at the market. We examine demand for DMPs that support the programmatic advertising ecosystem, including platforms from vendors such as Adobe, Google, IgnitionOne, Krux, Lotame, Neustar, Oracle, and Wunderman (KBM Group). We conclude that:

DMPs have hit a tipping point, driving continued robust growth. While the US DMP market is relatively small at $500 million, we expect to see robust 43% annual growth over  the 2015 to 2021 period. We believe DMPs reached a tipping point in the past year or two as both marketers and publishers became increasingly aware of their benefits. CMOs are focusing on improving their marketing and advertising ROI, and DMPs demonstrate tangible value by clearly organizing data into taxonomies, identifying intent to purchase, and yielding higher conversion rates.

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Age Of The Customer Drives Investment In Business Intelligence Tools

In the age of the customer, customer-obsessed firms serious about personalizing customer experience invest in business intelligence (BI) and analytics tools.  Companies collect more and more data on their clients today. BI software is increasingly important to extract information from the raw data, revealing insights. Analytics software tools go beyond traditional reporting and analysis to anticipate customer behavior and provide real-time insights.

In our recently published Business Intelligence And Analytics Software Forecast (Global), 2015 to 2020, we take a more in-depth look at the market’s growth potential. We expect the global BI and analytics software market to grow at a 12% CAGR over the 2015 to 2020 period.

The traditional BI market has matured, but still offers a significant growth opportunity. While business intelligence software is not a new product, Forrester projects robust growth for the solution. As we move into the Internet of Things era, an exponential increase in the number of connected devices will drive demand for BI software tools to understand the information. We expect the BI software market to grow at a 9% CAGR over the forecast period.

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ForecastView Meets Business Technology

Welcome to my blog!

I joined Forrester recently as a senior forecast analyst on the ForecastView team focusing on business technology (BT) topics. What is ForecastView you ask? It’s a Forrester product that puts the numbers around our research reports by publishing a five-year quantitative outlook. To learn how our forecasts can help you with your investment decisions, read our ForecastView overview.

Our BT forecast team takes a look at cloud, security, IoT, business intelligence, marketing ad technology, Big Data, and other hot topics in the BT space. We launched our ForecastView BT bundle in 2015. In case you missed it, our three 2015 forecasts examined eCommerce platforms, cloud security, and API management. Some highlights:

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