Mongodb seems to have finally broken through. Its SaaS component is now 58% of revenue, and is growing much faster than its older hybrid version. For a long time I avoided buying any “open source software” company for two reasons.
First, because anyone could (and did) copy what you had done and release their own identical, or near identical, version (ie Amazon released its own version of Mongo’s software solution, and copied every improvement).
Secondly, because the managements of “open source” companies seemed like part of a idealistic cult, out to do good for the internet, and were much more interested in keeping on good terms with other open source developers than making money for stockholders, who came in last in their list of priorities. (Please take into account that this is just my biased opinion, and don’t bother sending me outraged emails telling me how wonderful open source is for the world).
Well Mongo broke out of this two or three years ago when they realized that Amazon would just keep copying every advance they made, and decided to copyright/patent their new advances from then on, to some outrage from the open source community. Well Amazon had to stop copying them and Amazon’s copied software product is now still okay, but way outdated compared to Mongo’s latest.
And secondly, Mongo advanced beyond on premise software, and released its SaaS version for the Cloud, which has been growing by leaps and bounds and is now, as I mentioned above, well more than half of revenue and growing much faster than the company as a whole.
And finally, as Peter Offringa pointed out, the hyperscalers like AWS, azure, and Google, have decided within the last year to quit fighting the software companies like Mongo, and partner with them instead.
Mongo’s revenue growth has thus really accelerated in the past year and should continue to do so for the immediate future at least. Here is a summary from Mekong’s post with some commentary from me:
Year over year growth
Q3 21 +38%
Q4 21 +38%
Q1 22 +39% (Stable yoy, though sequentially it was up only 6%, so Q1 the year before must have been low sequentially too)
Q2 22 +44%
Q3 22 +50%
Q4 22 +56% (Q and fiscal year 2022 ended Jan 31, 2022).
You can see that the growth rate, after being stable at 38% or 39% for several quarters, went to 56% in three quarters.
Q3 21 +9%
Q4 21 +13%
Q1 22 +6% (April Q is seasonally light)
Q2 22 +9%
Q3 22 +14%
Q4 22 +17%
Sequential dollars increases:
Q3 21 +12m
Q4 21 +20m
Q1 22 +10m
Q2 22 +17m
Q3 22 +28m
Q4 22 +39m
This tells us clearly that we should expect Q1 23 to be lower sequentially too, and if it sells off on that it will be a buying opportunity (but they won’t be announcing it probably until early June (it’s the April quarter).
At any rate, I have taken a 5.5% position, limited by not having more cash and by not having anything I want to sell to buy it.