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Rob 'Flipper' Bearden plans to FLOAT his Hadoop heffalump

Hortonworks hears an IPO-OOOO

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To some, Rob Bearden is a hero. In just a few years, the venture capitalist flipped two open-source startups, turning diamonds in the rough into gems in the corporate M&A crown.

In 2006, he sold app server disrupter JBoss to Red Hat within a few years of joining for an estimated $350m, and just a year after joining SpringSource, he’d sold it to VMware for a whopping $420m.

Bearden is a former Oracle-sales high-flyer turned venture-capital inside man. He's also colourful, renowned for driving to the office in his farm truck with tyres stacked in the back.

This character's actions gave hope to open-sourcers eager to confirm that what they did could actually make money and – to the relief of his VC bosses who’d put money in both outfits – he got them their highly prized “exit.”

Jboss and SpringSource were in the right place at the right time. Selling professional services to open-source, low-cost middleware, they picked the proprietary pockets of IBM and Oracle and forced BEA Systems to sell up.

Big data is Bearden’s new calling, and for two years he’s been pushing Hadoop – the implementation of Google’s MapReduce data-cruncher – at Hortonworks.

Based on Bearden’s track record, we’re due a flipping – only there’s been no sale. In fact he laughs off the suggestion and the rumour he’s been hawking Hortonworks. “It’s comical, because you don’t raise $50m [venture funding in June] if you are selling the company,” Bearden told The Reg during a recent interview.

This time an IPO is in the air, sometime after 2014.

“We built this company from day one around the discipline and structure of taking it public – how we build and release technology, finance, how we hire people,” he says.

And in another first, Bearden has become chief executive - getting hands on with the day-to-day business rather than just creating the framework as COO.

Yahoo!’s Hadoop software dev vice president Eric Baldeschwieler was the first CEO but got shunted aside after six months so COO Bearden could take over.

Why has Bearden updated his MO?

The Hadoop market is supposed to he huge: it's said Hadoop as a service will be worth $13.85bn by 2017 while the market for Hadoop/NoSQL software and services will hit $3.5bn in five years, up from $540m today.

IBM’s software supremo, senior vice president Steve Mills, said: “Hadoop is there for the taking.”

This sounds exactly like the push-over of early JBoss, when you had to turn customers away. The company's former strategy chief, Bob Bickel, summed up that spirit in a recent blog that also explains how Bearden “professionalised” a fast-growing startup that needed to get its act together if it wasn’t to be overwhelmed by the insatiable demand for its services.

"I didn't realise how transformational it [Hadoop] could be for the overall data architecture - I didn’t anticipate that... it's required some tweaks in how you engage with customers and ensure you help knowledge transfer." – Rob Bearden

“JBoss was growing fast and significant companies wanted to do business with us. We needed to put in place a way to keep up with the demand and take advantage of the opportunity in front of us,” Bickel wrote.

The size of the big-data market is the reason Bearden’s VC paymasters at Benchmark Capital took on Hadoop – Bearden is a Benchmark Capital entrepreneur in residence.

The VC appeared to have smelled big data opportunity and sprung Yahoo!’s core Hadoop engineering team free from the search company in a $23m spin out in 2011.

Benchmark has a lucrative history in open source. It invested in MySQL, XenSource and Zimbra (besides JBoss and SpringSource) that it sold respectively to Sun Microsystems, Citrix and VMware for $1bn, $500m and an undisclosed sum.

Bearden told The Reg the Hortonworks deal took a year to get right. But so determined was Benchmark it spent 12 months honing a deal that would still give Yahoo! the access to a support team and the service level agreements needed to run their own Hadoop infrastructure. Yahoo! uses Hadoop on its web properties to crunch data.

“It took a year to fund the right balance of a deal structure,” Bearden said, “that allowed the team to come out and be independent of Yahoo and yet have a relationship with Yahoo that made us deep engineering partners.”

An "entrepreneur in residence", by the way, is the person VCs send to startups to provide structure and, as they say in VC circles, help the business to "scale".

The means making the right hires, knocking heads together ‘till they spark, putting in place processes for sales and marketing that mean sales and marketing operate consistently and reliably, not on an ad hoc and reactive basis.

JBoss and SpringSource got a foot in the door because developers had already downloaded them, making it easier to sell support contracts.

This time, despite the hype, big data is a harder sell than application servers and tools. Your devs can’t simply download a big data framework – you need a data strategy and to know what hardware you’ll use.

Bearden has had to re-calibrate – hiring field sales and service engineers to sell and support Hortonworks’ Enterprise Data Platform over longer sales cycles.

"What we know going into building the company was Hadoop could be very transformational for the business value and the ecosystem it can get for the enterprise, but I didn't realise how transformational it it could be for the overall data architecture - I didn’t anticipate that," he said.

"It has required some tweaks in how you engage with customers and ensure you help knowledge transfer... it’s more of an enterprise skills set in engaging with customer, so we had to hire people in the field and sales side to cater for the longer sales and support cycle.

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