Then the business opportunities started to become apparent. Imagine if e-retailers knew more about their customers, or if medical companies could better predict a patient's risk for specific diseases or if advertisers could more precisely target the right audience.  "The Hortonworks opportunity is to enable Hadoop to be an enterprise viable platform for managing all of this data within the enterprise," Chief Executive Officer Rob Bearden said in the online roadshow before the IPO.  But other start-ups got there first. In 2008, a group of data nerds from Facebook, Google, Yahoo and Oracle came together to start Cloudera and began evangelizing the benefits of Hadoop to anyone who would listen.  MapR was formed a year later to also find commercial applications for Hadoop. And in mid-2011, Yahoo joined with venture firm Benchmark to form Hortonworks as an independent company that would "enable Apache Hadoop to meet the growing market demand and become the big data management and analysis platform of choice for the industry," according to a press release at the time.  Read MoreA holiday treat for tech investors: IPOs  Fast forward to late 2014, and "big data" has gone from being a niche idea to a wildly overused phrase. But when it comes to Hadoop, the concept makes all the sense in the world.  That's because the old data center software, created by companies like Oracle, IBM and Microsoft, was designed for the pre-Internet and certainly pre-smartphone days. Big companies still have all that gear in their facilities, but they need tools that can handle 10 times, 100 times, even 1,000 times that amount of capacity. And then they need software to analyze it, which is Hadoop's primary role.  Allied Market Research estimates that sales of Hadoop-related software will climb to $50.2 billion annually by 2020, from $1.5 billion in 2012.  Investments in Hadoop companies jumped more than five-fold this year to $1.28 billion from $236.8 million in 2013, according to research firm CB Insights. Back in 2010, the number was $48.5 million.  The bulk of this year's capital—$900 million—went to Cloudera, thanks largely to a $740 million investment by Intel, which forged a strategic partnership with the start-up and bought an 18 percent equity stake. Hortonworks raised $150 million, with one-third coming from Hewlett-Packard, and MapR brought in $110 million, mostly from Google.  Read MoreHP makes strategic investment in Hortonworks  Because the software is open source and free, with code being contributed from developers big and small, the only way these companies can profit is by adding enough value to the raw technology to make enterprises open their wallets.  "While that seems like a problem, it's offset by the advantage of a global community of people that work on that stuff and move much faster than any vendor could," said Mike Olson, co-founder and chief strategy officer at Palo Alto-based Cloudera.  Olson said the early team at Cloudera spent their days educating people about the promise of Hadoop while developing services on top of it. By 2013, the story had shifted dramatically and customers were buying big packages. This year it's taken off.  "People are moving into substantial production," Olson said. "It's not a science experiment anymore." Cloudera's customers include eBay, Qualcomm and Orbitz.
The stock market will get its first real taste of Hadoop on Friday, when Hortonworks, a seller of the software, debuts on Nasdaq.