What Intel’s Cash Means for Cloudera

When the big-data software and services company Cloudera announced yesterday that it had closed a $900 million round of funding primarily led by the chipmaker Intel, it changed the map in the still-nascent world of Hadoop, the open source platform around which it has built its business.

All that cash is likely to speed things up at Cloudera on many fronts. In an interview with Re/code, Mike Olson, its chairman and chief strategy officer, sketched out a few plans for the months and years ahead, which may include acquisitions in addition to doubling down on research and development as well as sales efforts.

One important new benefit to Cloudera, he said, will be access to Intel’s network of partners and customers. “Intel wants to drive sales of servers and consumption of its silicon,” Olson said. “Having our Hadoop tuned to run with Intel Xeon chips helps give them a point of differentiating in the marketplace, and we’ll both benefit from the combination. We’ll be able to get in on deals that we wouldn’t have gotten into before.”

Cloudera will also have a close-up look into improvements on Intel’s future chip designs that others won’t, Olson said. “We are getting visibility into innovations at Intel that we had never seen before.”

Intel’s resources and reach will also boost Cloudera onto stronger competitive footing against other players in the data analytics business, including IBM and EMC’s Pivotal, not just other Hadoop players like Hortonworks, which landed its own big investment last week. “We expect a battle with some big vendors with some big stakes,” Olson said. “Now we’ve got a partner and resources and product roadmap that allows us to punch well above our weight.”

In turn, Intel’s money will go a long way toward speeding up improvements that Cloudera has on its roadmap. Among them, he said, are encryption and enhancements to security features.

CFO Jim Frankola said Intel wanted a substantial stake in the company. It ended up amounting to $740 million, giving Cloudera an implied valuation that’s north of $4.1 billion. In order to get the deal done, most existing shareholders sold some shares. “We were able to convince some of our existing shareholders to sell a small stake,” he said. “We didn’t want to dilute the company too much. But no one sold out completely.”

Frankola declined to specify which shareholders sold or how much. Some details on that should appear in regulatory filings with the U.S. Securities and Exchange Commission within the next several weeks.

Intel is now Cloudera’s largest strategic shareholder. Its other largest shareholder is the venture capital firm Accel Partners, which led several prior funding rounds. Accel General Partner Ping Li has a seat on Cloudera’s board. Other shareholders include Greylock Partners, Meritech Capital Partners, In-Q-Tel, Ignition Partners, Google Ventures and the investment firm T. Rowe Price.

Not all investors sold. Caterina Fake, a co-founder of Flickr and of the seed-stage VC firm Founders Collective — which was also an early Cloudera investor — said she didn’t sell any of her shares. “I invested independent of FC and didn’t take money out,” Fake told Re/code by email.

One other detail yet to be decided: Who from Intel will sit on Cloudera’s board. Intel had no comment, but Olson said the person is currently being vetted.

(Correction: I initially listed Olson as CEO, but that’s Tom Reilly. Sorry about that.)

This article originally appeared on Recode.net.