Even though Cloudera's valuation took a hit in its IPO, investors are paying a big premium to own shares of the software developer.
Cloudera jumped 21 percent in its stock market debut on Friday to $18.10, giving the company a market capitalization of $2.3 billion. It's trading at nine times 2016 revenue, almost triple the price-to-sales ratio for rival Hortonworks.
The explosion of online video, social
That's where an open source platform called Hadoop enters the fray.
Cloudera and Hortonworks are two of the three main companies, along with MapR, trying to commercialize Hadoop. Developers can use Hadoop for free to analyze big data sets, but there's so much demand for the technology from large enterprises that vendors are racing to package it in ways that can turn into lucrative businesses.
While Hadoop has been a raging hot technology in recent years, the Hortonworks IPO in late 2014 soured public investors on the market. Hortonworks shares have dropped 12 percent in the past year and are trading 35 percent below the IPO price of $16.