MongoDB’s Atlas shrugs, with all NoSQL biz’s customer growth resting on its shoulders

Operating, net losses deepen in Q3, mLab revenues to stumble a bit after buyout

NoSQL database slinger MongoDB bragged about winning conservative customers from legacy vendors as it reported another quarter of increasing revenues – but also saw operating and net losses increase.…

NoSQL database slinger MongoDB bragged about winning conservative customers from legacy vendors as it reported another quarter of increasing revenues – but also saw operating and net losses increase.

The New York firm, which went public about a year ago, reported results for the three months to 31 October 2018 last night. It also said that chief beancounter Michael Gordon would take on the role of chief operating officer as well as CFO.

Revenues rose to $65m, most of which ($60.1m) came from subscriptions, and the rest from services.

However, this success was tempered by another quarter of increasing losses, with a net loss rising about 29 per cent to $31.3m and operating losses by 20 per cent to $29.1m.

The software biz also warned there would be a slight decline in portions of revenue, specifically from the cloud database maker mLab, which it gobbled up in November, as some customers of the acquired vendor look elsewhere and move away.

“We anticipate the potential for some customer churn due to the disruption from switching platforms and the large number of small customers in mLab’s customer base,” CEO Dev Ittycheria said on a conference call with analysts.

A second reason for a potential dip, he said, was that MongoDB also plans to honour the lower mLab pricing, giving customers the cheaper packages.

But he struck a positive note about the buyout overall, saying the self-serve business mLab had built up – the firm never hired a sales rep – would help its pursuit of the “long tail”. Or niche markets in plain English. We’re told MongoDB expects to extract $5m from mLab customers in the next quarter, and $18m during fiscal 2020.

“We believe the best way to go after the long tail is through self-serve, at least in the initial customer acquisition, and then where appropriate, we will get our sales team to follow up and help expand those customers,” he said.

Elsewhere in the call, Mongo’s boss also claimed a “healthy mix” of new customers and expansions within existing customers, once again trumpeting migration from legacy vendors’ databases. CTO Eliot Horowitz recently told The Register that about a third of its sales are in legacy migration.

Ittycheria also pointed to an increase in customers in “traditionally conservative industries and markets”. This is crucial for Mongo as it tries to move away from simply being the database for devs and attract the more cautious enterprise customers – efforts that have seen the firm introduce ACID transactions and boost security features.

MongoDB also tweaked its sales strategy, focusing on conversations with the C-suite. It is putting cash into this work, spending $38.3m on sales and marketing in Q3 2019, about $10m more than the previous year’s quarter.

Conservative customers name-checked this quarter included an Italian government institution; insurer Maryland Health Exchange; and an expansion in UK tax authority HMRC.

DBaaS Atlas drives customer growth

The other area of focus was the MongoDB’s Database-as-a-Service biz Atlas, which was introduced about two-and-a-half years ago.

Atlas customers rose from 5,300 at the end of Q2 to 6,200 at the end of Q3. Overall, the firm reported an increase in 900 customers to 8,300 customers this quarter – but many of the new Atlas customers are not net new to the firm.

“The workloads that customers first started with were probably tier 2 and tier 3 workloads or maybe even development test workloads,” said Ittycheria.

“We are clearly seeing now large sophisticated customers moving mission-critical workloads to Atlas and that’s reflected in both the sizes of deals as well as the broad-based set of use cases that customers are using for.”

When asked what customers were asking for from Atlas, he said that a big feature was being able to run the same application across different cloud providers.

“That’s not just for pure lock-in concerns, but it’s also based on customers who want to take advantage of different capabilities on different cloud providers,” he said. “That’s an area that you’ll probably see us make some announcements early next year.” ®

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