With more than $100 million in sales during its last fiscal year, 535 paying customers and a 90% annual growth rate, Cloudera is the biggest player in the Hadoop platform field. Determined to retain its first-mover advantage in a crowded, fast-growing market, Cloudera has recalibrated its strategy, which it presented to about 50 industry analysts in a confab last month in downtown San Francisco.

Despite its eye-popping numbers—which make Cloudera one of the fastest-growing software startups of all time—the Palo Alto, California company, which was founded in 2008, is not yet profitable. In the most humorous quote of the event, CEO Tom Reilly said, “We are not making money yet, but we are losing money more efficiently than our nearest competitor.”

Rather than focus on the competition, Cloudera’s new strategy looks outward to customers for revenue opportunities and inward to operations and product automation to lower costs and accelerate its path to profitability.

Revenue Opportunities

Land and Expand. For the top line, Cloudera is pursuing a “land and expand” strategy that is predicated on solving real business problems. Last year, Cloudera targeted IT issues, such as data warehouse offloading and SQL queries, but this year it’s focused squarely on addressing line of business needs. Chief among these are security, risk, and compliance requirements in financial institutions and delivering 360-customer views and churn analytics for telecommunications companies. Cloudera is leaning heavily on its huge network of 1,450 partners, including 800 systems integrators, to build compelling applications on its platform.

Cloudera believes—and its customer base proves out—that once a company implements an enterprise data hub, it discovers a host of business applications that require it. Because of Hadoop's low data processing costs—about $1,000 a terabyte—it takes companies awhile before they begin to imagine new applications and ways of doing business that simply weren't possible with higher-cost platforms. More than three-quarters of Cloudera customers (77%) expand their Hadoop deployment in the first year and almost 90% renew their contract each year, says Reilly.

Proprietary Software. Rather than make a low-cost play by selling only open source software—like its chief rival Hortonworks—Cloudera sells proprietary software on top of its open source Hadoop distribution. The software—which includes management utilities and software for SQL, search, Hbase, and in-memory data processing—is selling fast: almost three-quarters (73%) of its revenue comes from sales of software versus services and sales are doubling each year. And, not surprisingly, the biggest consumers are big companies with over $10B in revenue. These companies traditionally have the biggest appetite for commercial software.

Cloudera is also determined to maintain its innovation lead, both in open source and commercial software. Cloudera proudly states that it was the first company to provide search, security, governance, SQL, and Spark on its Hadoop distribution. Besides being a leading contributor to Apache Foundation, Cloudera plans to continue to augment open source software with commercial products that sit on top of Hadoop.

Finally, Cloudera is targeting markets with the biggest growth opportunities. As already mentioned, this is primarily financial services and telecommunications industries, but Cloudera also has a strong presence in government, business services, retail, healthcare, pharmaceuticals, and media. Cloudera is also targeting companies in Europe and  Japan, where big data is just beginning to take root.

Bottom-line Opportunities

For the bottom line, Cloudera’s strategy is to accelerate the time it takes to get customers up and running with its software and reduce the cost of customer support. “We don’t make money on our initial sales right now,” says CEO Reilly. To that end, Reilly has created a mantra of “2x2”—that is, every department in the company has to double profitability every two years.

A primary target for 2x2 is to speed the time it takes customers to deploy Cloudera software especially the Enterprise Data Hub. “Currently, we foist a lot of choice on customers: they have to create a data model, access patterns, and so on,” says Reilly. “All that choice generates complexity for customers and delays implementation times.”

(auto)awesome. One Cloudera intiative to reduce implementation complexity carries the moniker "(auto)awesome". It’s a series of enhancements that automate or expedite tasks carried out by systems and data administrators. These include things, such as automatically inferring workloads and data models from query plans; background conversion of file formats and blocks sizes during loads; and automatic propagation of updates to database views. “The goal of (auto)awesome is to enable more applications for more users with fewer architects,” says Charles Zedlewski, vice president of products at Cloudera.

Automating tasks was a major catalyst for Cloudera’s February, 2015 acquisition of Xplain.io, a product that automates the design, integration, and optimization of data models that use SQL, NoSQL, and NewSQL technologies. Cloudera is also exploring the use of appliances, the cloud, and application templates to accelerate deployment. And during the analyst day, Cloudera featured one partner, Cask.co, which provides an application development environment that simplifies the process of building applications on Hadoop.

Proactive support. Cloudera also wants to minimize support costs by doing what it does best: exploit big data.  Cloudera has collected several hundred terabytes of information about customer support calls and their environments, with their permission of course. And, it has offered a “phone home” service plan for two years now. It now mines its support data to offer proactive support, providing customers with suggestions about how to improve operations and avoid issues experienced by other Cloudera customers. It plans to offer predictive support in the near future.

“Companies that analyze support information operate more cost-effectively,” says Mike Olson, founder and chief strategy officer at Cloudera. “It’s easy to lose money supporting large-scale data systems.”

Summary

Doubling down on its efforts to lead the market for Hadoop data management platforms, Cloudera is focused more on internal metrics than the competition. By focusing on business value, selling software (not just services) and automating services and support, Cloudera plans to make good on its early success.