Cloudera Moves To All-Open Source Model In Major Shift

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Amidst financial troubles and departure of chief executive Tom Reilly, company says it wants to emulate success of pure open source pioneer Red Hat

In a radical overhaul of its business model, big data company Cloudera has said it plans to switch to an all-open source model based on AGPL and Apache 2.0 licences, with future revenues to be derived from sales of support services.

The move follows Cloudera’s $5.2 billion (£4.2bn) merger last year with Hortonworks, which similarly operated on an all-open source model.

The company has more recently faced financial troubles culminating in disappointing earnings in June, operating losses rising to some $35m and the departures of key figures including chief executive Tom Reilly and chief strategy officer Mike Olson.

In the past Cloudera’s revenues have come from sales of licensed software, but it has been under pressure to bring its business model into line with that of Hortonworks since the merger.

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Open source success?

The company said it would seek to emulate the success of IBM-owned Red Hat, which gives away open source software and sells support for enterprise versions.

Red Hat is unusual in deriving profits from that model, however, with companies more frequently packaging open source software with proprietary extensions and selling it under licence, as Cloudera currently does.

Formerly closed-source products such as Cloudera Manager, Cloudera Navigator, and Cloudera Data Science Workbench are to be licensed under either the Apache License, Version 2 or the GNU Affero General Public License, Version 3, with support offered via paid subscription, Cloudera said.

It didn’t indicate which licences would be usd for which products.

There is to be no change to licence terms for existing and older versions of Cloudera’s software.

“All of the open source projects that we contribute to that are hosted by the Apache Software Foundation will continue to be ASF governed projects,” Cloudera said.

‘Leadership role’

“Furthermore, we will continue to contribute our enhancements and fixes to those projects upstream first.”

The new subscription and software distribution model is to begin in September, with the new licences taking effect between this September and January of next year.

Cloudera said it is already an “innovative open source company” with more than 700 engineers.

“We take our open source leadership role seriously, and recognise the need to align the Hortonworks and Cloudera licensing models as an opportunity to renew our commitment to free software.”

The company said the shift would help customers avoid vendor lock-in, support an open ecosystem and boost a community standards-based approach to development.

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