Data software companies Cloudera and Hortonworks have combined to take on Amazon, according to a report from CNBC.
Both companies were rivals vying for market dominance and hemorrhaging cash as they tried to attract businesses and outdo each other, but now they can focus on taking on the online giant itself.
Cloudera and Hortonworks are two popular vendors of Hadoop open-source software, which can analyze, store and process a lot of different data. When the merger was announced in October, it was valued at $5.2 billion. However, the new company, which will be called Cloudera, is worth $3 billion.
Stock prices dropped in the fourth quarter during a market sell-off. The main concerns were whether Cloudera had the clout and backstory to take on Amazon and its web services. In 2018, Cloudera shares dropped 33 percent and Hortonworks' shares slid 29 percent.
Cloudera CEO Tom Reilly said he was singular in his vision for the future of the company. He has run Cloudera since 2013 and took it public in 2017.
"The big competitor for us is Amazon, with their house offerings," Reilly told CNBC in an interview last month. "We're gearing up to take on Amazon."
Open source was a big buzzword in 2018, as many technology companies invested in the tech. IBM purchased Red Hat, an open-source cloud company, for about $34 billion. Microsoft bought GitHub for $7.5 billion and Salesforce acquired MuleSoft for $6.5 billion, to name a few.
The big advantage for Cloudera as it takes on Amazon is that it works in corporate data centers and with multiple clouds, while for years Amazon Web Services delivered software from its own data centers. Although Amazon recently announced it would also do so, Cloudera has a way to let companies use its products on Google- or Microsoft-operated clouds, while Amazon does not.
"Amazon will never be able to deliver multi-cloud," Reilly said.