Cloudera and other big players in the Hadoop market are facing tough times.
Last week, MapR confirmed it could shut down and lay off 122 employees this month if it doesn’t secure additional financing to fund its operations. And now Cloudera CEO and board member Tom Reilly announced he is leaving the company. In addition, the company lowered its full 2020 revenue guidance, from $835-$855 million to $745-$765 million.
The news prompted Cloudera’s stock to plummet more than 40 percent to an all-time low. It slumped to $5.21 at the close of the market Thursday, down from $15.15 just three-and-a-half months ago.
Cloudera provided the following statement directed at its partners:
“Our upcoming leadership change will have no impact on our relationship with partners or the way Cloudera will work with partners. We’re fully committed to the important work we do together to deliver for customers.”
Daniel Ives, an analyst with Wedbush, said this likely will be the “straw that broke the camel’s back for many investors and core believers in the Cloudera story” and called this week’s developments the “dreaded trifecta of bad news: soft April results, a jaw-dropping weak guidance and a CEO departure.”
Former rivals Cloudera and Hortonworks kicked off this year with news of a completed merger. The two companies initially announced plans for a $5.2 billion tie-up back in October.
“Taking a step back we have been very cautious since the announcement of the Cloudera-Hortonworks deal and viewed this as a complex merger with a myriad of strategic and financial challenges from the onset that needed to be overcome,” Ives said. “While the company was making some steady progress around integration, in essence the ‘wheels came off the bus’ this quarter with sales execution issues, secular headwinds on the Hadoop market, and cultural challenges creating a very difficult environment for the Cloudera team. Now with the visionary and architect of this acquisition, CEO Tom Reilly, suddenly retiring and exiting stage left, there is no pilot on the plane to navigate the company through this massive transformation which is a major concern for [investors]. In our opinion, it’s clear the story is broken; now the question is valuation and what will be the next strategic move.”
Reilly is retiring from Cloudera effective July 31. Cloudera’s board has appointed Martin Cole, board chairman, as interim CEO, who will take over once Reilly is gone. Cole will work with Reilly to “help ensure a smooth transition and to lead the company’s executive team while the board conducts a search for a permanent CEO,” according to the company.
“I have become deeply familiar with the business since joining Cloudera’s board and am very optimistic about its enterprise data cloud strategy,” Cole said. “As we search for the next CEO, I look forward to continuing to work in close coordination with the board and the rest of the talented team across Cloudera to serve customers, deliver innovation with partners and drive shareholder value.”
“I am very proud of everything that we have accomplished at Cloudera over the past six years, as we have transformed into a leading enterprise data cloud provider,” Reilly said. “While there is much work still to be done, I have determined that now is the right time for me to retire and transition leadership of the company as it enters the next chapter of growth. I have every confidence that Cloudera will continue to thrive in the years to come.”