A tale of two mergers: Cloudera and Micro Focus

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I have recently attended the DataWorks (Cloudera) user conference in Barcelona, and the Micro Focus user conference in Vienna. Both companies have recently completed mergers, but the results are quite different.

Of course, there is no such thing as a merger: they are always acquisitions, but while the coming together of Cloudera and Hortonworks was billed as a merger, it looks more like an acquisition. Conversely, the acquisition of HPE Software by Micro Focus, despite being clearly an acquisition, looks more like a genuine merger. Let me discuss each of these in turn.

In the case of Cloudera, the company announced  its plans for  Cloudera Data Platform (CDP) as a merger of the two company’s respective platforms to be available, in a cloud-based version, sometime in the third quarter of this year, with an on-premises version expected around the end of this year or early in 2020. It will ship with all of the various offerings previously available from both companies. The other major announcement was that Cloudera will shift from an “open core” platform to a pure “open source” platform as has always been the case with Hortonworks. More generally, while there is obviously considerable overlap between the two products sets, Hortonworks’ focus on IoT and Cloudera’s on machine learning/AI means that there are a lot of synergies.

So all of this makes technical sense. However, from a cultural perspective, the acquisition is clear cut. Senior executives from Hortonworks are no longer with the company. And I was disappointed that only Cloudera’s CMO attended the conference – none of the other senior executives bothered to attend – whereas Hortonworks has always treated DataWorks as a major event. The paucity of senior executives led me to wonder whether they really care and whether the event was only taking place because Hortonworks had arranged it in advance. It would be a shame if Cloudera abandoned it.

Micro Focus could not be more different. All the senior executives were present, from the CEO down and I was impressed with their vision. There was an article in The Times recently, referring to the HPE acquisition, that stated “the acquisition quickly unravelled … the integration would be more costly than first thought”. The second part of this statement may be true but, in my opinion, the first part is not or, certainly, it is not now. Of course, HPE was a big mouthful to digest but the company has made clear its position. First, it will not abandon any product while it has a single user remaining. Secondly, it will enhance and build on the products it has and, thirdly, it will encourage collaboration and reuses across product categories. This last part is particularly significant. In HPE different product groups were siloed and there was cross-charging if, say, the people in ArcSight wanted to leverage Vertica. Which, of course, meant that groups would opt for open source products that they wouldn’t be charged for. All of this has been stripped away.

Finally, it was my impression that all of the ex-HPE people I spoke bought into the cultural approach adopted by Micro Focus (delegating down rather than delegating up) and its encouragement of collaboration. This is why I think this feels more like a merger and less like an acquisition, because it is bringing its employees with it, in a way that is not commonly seen in acquisitions.