Businessmodel of Hortonworks

Customer Segments

Hortonworks has a niche market business model, focusing on a specialized customer segment. Its products are targeted at organizations who have a need to quickly process and analyze large sets of data on commodity hardware.

Value Proposition

Hortonworks offers three primary value propositions: accessibility, convenience, and cost reduction.

The company utilizes YARN, a common data operating system capable of simultaneously running various types of processing workloads. It allows customers to integrate new and existing third-party applications seamlessly with Hadoop. Further, even though Hadoop is designed for commodity hardware, it can also run in appliances or other storage solutions, in the cloud and on-premise, and in virtualized environments. These features make it accessible to a wider variety of organizations.

The company’s products offer real-time predictive analytics. This enables customers to be less reactive and have a broad view of data, which in turn simplifies their daily roles and saves time.

The company’s offerings optimize data architectures and increase analysis efficiencies in a way that significantly reduces costs. As an example, the annual cost of using HDP to manage a raw data terabyte could be as much as 100 times less expensive than doing so with high-end storage arrays.

Channels

Hortonworks‘ main channel for acquiring customers is its sales organization, which is comprised of a direct sales team and reseller partners who work to identify new prospects. The company also markets its offerings through its main website and social media pages, trade shows and conferences, and the annual Hadoop Summit that it has hosted since 2012.

Customer Relationships

Hortonworks’ customer relationship is primarily of a personal assistance nature. The company works closely with product users to ensure all runs well, providing 24/7 online and phone support.

Key Activities

Hortonworks’ business model mostly involves maintaining and enhancing its Connected Data Platforms, HDP and HDF.

Key Partners

Hortonworks operates partner programs designed to support the growth of the Apache Hadoop ecosystem. They provide training, business resources, technical support, enablement services, and joint marketing opportunities to members. There are over 1,600 partners, who fall into the following program categories:

• Technology Partner (ISV/IHV) Program: This program enables independent OEMs, hardware, and software solution providers to develop, test, deploy, and support joint products with Hortonworks offerings. Partners include Hewlett-Packard Enterprise and EMC2.
• System Integrator/Consultant Program: This program enables system integrators and consultants who provide consulting, design, and/or deployment services to optimize their services through use of HDP. Partners include Accenture, Capgemini, and EY.
• Strategic Reseller Program: This program involves an agreement with resellers for the sale of Hortonworks subscriptions and other services to their clients. It is by invitation only. Partners include World Wide Technology and Immix Group.
• Training Delivery Partner Program: This program involves partnerships with organizations that provide training for high-tech software firms, in which they receive training themselves on the use of HDP. Features include hands-on laboratories, instructor certification, and go-to-market assistance. ### Key Resources

Hortonworks’ most important resource is its open source business and technology team, which features talent from a wide variety of companies, including IBM, Oracle, HP, and VMware.

Another crucial human resource is its team of sales engineers who have deep domain expertise and provide support to the sales organization, as well as technical training for partners. Lastly, customer support staff members operate 24/7 and are essential to ensuring the satisfaction among clients.

Cost Structure

Hortonworks has a value-driven structure, aiming to offer a value proposition by focusing on a high level of personal service. Its biggest cost driver is sales and marketing expenses. Other major drivers are research and development and administrative costs. All of these costs are fixed.

Revenue Streams

Hortonworks has two revenue streams, which are as follows:

Support Subscriptions: The company generates revenues through annual and multi-year “support subscriptions“. In addition to access to the platform, they entitle buyers to the following:

• Remote troubleshooting
• Online self-paced training courses
• Access to upgrades, updates, and patches
• Diagnosis of installation and configuration issues
• Diagnosis of cluster management and performance issues
• Diagnosis of data loading, processing, and query issues
• Application development advice Subscribers also get access to SmartSense, a service for enhancing cluster health and utilization. In addition, there is a premium option that offers input from and closer collaboration with developers.

Professional Services: The company offers an array of additional value-added services:

• Training: This involves scenario-based classes for developers, data analysts, and system administrators in classroom, corporate on-site, and online settings, along with exams that customers can take to become Certified Hadoop Professionals.
• Consulting: This involves experienced consultants assisting customers with deployment assessments, implementations, upgrade planning, solution integration, platform migrations, and application development.