Dev and M. Gordon at Goldman Sachs

Goldman Sachs Conference

My take-aways

Three reasons why MongoDB keeps ramping S&M spend:

  1. GTM motions for MDB has hit an Inflection due to MongoDB now considered an industry standard.

  2. this has lead to ‘Cloud Services Agreements’, and

  3. the ‘sea change’ in their relationship with Hyperscalers.

Goldman Sachs-

“We were struck by the fact that the database market is now the fastest growing market in software, it used to be GDP type growth, people were like, oh, it’s boring. Now. it’s the fastest 17.6% growth rate, right. And you have small share, and you have this amazing potential, public in MongoDB.”

Michael Gordon

there’s no such thing as an Oracle shop or a MongoDB shop, or a Postgres shop, et cetera. I mean, our largest customers like that bank that was referred to by Kash. I mean they had one of everything or multiples of everything and so we have to win almost every new workload through sales and marketing more sales at that time once you’re in an account. Now, it does get easier and there’s some seminal things that happen in account that makes it much easier one of them is being declared a standard, right? So I joke with people that – early days in account we go in through the side door because the existing team can’t use existing tech stack to address this used case so they use. We prove our value then we kind of get endorsed as like hey, you should consider MongoDB at some point we become part of the mix, but we’re not actually declared standard.

Then the third step is now, we’re in the loading dock for every new application just may be three t-shirt sizes and two of those include MongoDB and one maybe doesn’t, right? And so now you’re part of the standard framework. And so, in this cloud world one of the seminal events for us is negotiating what’s called a cloud services agreement. It’s quite an onerous negotiation because as you can imagine, both the customer will haggle over like indemnity around breaches and we obviously don’t want to be responsible if someone did put any passwords or incorrect passwords or create some vulnerable end zone and they obviously want to make sure that we’re doing all the right things to secure their data.

But once you get through that, that by definition becomes they’re essentially given us a hunting license to go win new workloads and now it becomes much easier, but they’re not going to do that with every vendor they work with, because the negotiation is so onerous. So most customers first start with the hyperscale provider that they’re kind of working with and then they’ll go to the next couple of vendors that they think are going to be the most pervasive in their enterprise.

So by definition, you’re only having that conversation if you’ve proven that there’s a lots of interest in MongoDB and you can address a wide variety of used cases, that’s what our sales teams work on, which yields this negotiation with a CSA that ultimately then unlocks a ton of opportunity. And so that’s typically the buying behavior of – especially large customers. Smaller customers tend to standardize on one stack and so most of our customers are running either all of their business or big parts of the business on MongoDB and by definition, you’re the standard from day one.

And back to the comment about existing applications. That’s not really where it’s helpful or good idea for us to spend lots of sales cycles on growing an existing application that’ll either happen organically, or maybe there’s some customer success angle in terms of getting them to enable some of the incremental features or through other things. We really want the sales folks focus on winning new logos, or winning new applications within existing customers to sort of further drive the penetration to Dev’s point.

Dev Ittycheria

we’ve seen a sea change in terms of the cloud providers, because what they have noticed is that as we win more workloads we actually drive more value to their cloud. In fact our Atlas business is significantly larger than both DocumentDB and the Cosmos DB API that Azure has. But we drive so much more business that there’s been a sea change in terms of their approach so much so that Amazon and now Microsoft incentivize their sales people to get quota credit and commissions for Atlas deals running on their cloud and customers can apply their commitments through Atlas purchases. So it incentives two ways.

Unidentified Analyst

So there is gravity.

Dev Ittycheria


Me here:
I don’t believe this sounds at all like a company that needs to turn anything around in order to win.