My initial thoughts were that they are growing the business very fast, but not shrinking the losses. But I felt better after reading the conference call.
Conference Call
Two of our largest Atlas deals closed through the AWS marketplace. The ability for customers to buy Atlas through their preferred cloud partner makes it easy to do business with us, reduce the sales cycle times and accelerates the growth of our business.
Furthermore, we signed an exciting new relationship with IBM as part of its private cloud initiative. IBM will activate thousands of global sales reps who will be incentivized to resell MongoDB as part of IBM’s private and analytics cloud platforms for enterprises. This will greatly expand our reach into new markets and opportunities where IBM has an influential presence.
Innovation is the core of our DNA and our success. We’re continuing to invest in our platform and have a robust product roadmap that will make it even easier for customers to work with data. In three weeks, we’ll be hosting our annual user conference, MongoDB World. The highlight will be the formal introduction of MongoDB 4.0, including multi-document asset transactions.
Net dollar based expansion rate again over 120%
We now have 394 customers with over $100,000 in annual recurring revenue, which is up from 354 a quarter ago, and 268 a year ago. That’s up 11% sequentially and up 47% from a year ago.
Q. On the IBM collaboration, can you give us a little bit more insight. historically, we have seen smaller software companies do deals with these large vendors and on paper they look good, but often there’s not that much in reality coming through. What’s the incentive structure? Why is it exciting for the two of you? Thanks
A. What I think IBM has seen, and the other ones that actually first approached us, was that MongoDB is being adopted everywhere in their customer base and they’re seeing specific demand from their customers for MongoDB and they wanted to use MongoDB for their private cloud initiative. Their sales people actually are incentivized through quota relief to sell MongoDB. So this is not just one of those barney announcements.
There’s real motivation by IBM to activate its 7000 plus sales people around the world to resell MongoDB and they see a big opportunity in front of them. Why it’s attractive to us is that even though we’re a fast growing company, we only have a certain amount of reach and we’re very attracted by the opportunity to expand our reach through their presence in these markets and accounts and where they have a lot of influence, where they can embed MongoDB more quickly than, say, we would try to do ourselves. So we’re very excited about this relationship and we think it will pay dividends in the future.
Q. How should we think about the IBM relationship ramping in fiscal ’19? And IBM has their own cloud, so I am wondering if you’re going to have a partnership with their cloud as well, and will they be selling Atlas?
A. We are quite optimistic about the IBM relationship. We feel like it’s a real relationship. And as I said and the way it’s real is that their sales people are now incentivized to sell Atlas to their customers. We’re already seeing interest, in the field and there are already engagements happening in a bunch of different regions, but it will take time. It won’t be an immediate impact and it will take time for them to ramp the global sales force, but we should see the benefit of it over time.
Q - 5G commercial networks are starting to come online this year and so I’m wondering what does 5G mean to MongoDB.
A. One of the trends that we see very clearly is the rise of mobile applications, and MongoDB has been well suited for a long time for people to build mobile apps. Mobile apps tend to have a very high rate of change because people are constantly adding new features, fixing bugs and so they need a platform that can enable them to have high developer productivity.
Obviously, with certain apps, you can have thousands, if not millions of users and so you want a platform that can scale and with a distributed capability, you also want to have fast or low latency read/write access and so MongoDB is well designed for those kind of use cases. 5G only plays to our strength because it will encourage people to build higher performance, more content rich, more streaming content, video and so forth that requires more bandwidth and that plays well to MongoDB.
Q. The two big deals you talked about being sold on the AWS marketplace. Were those sold by the AWS sales force, or by you guys, or by self-service?
A. They definitely sold by us, Brad, but I would tell you that the AWS sales team really worked with us to make sure those transactions happened. Obviously it’s early days, but it was a really great sign of partnering in the field, and we’re really excited about what the future may hold there.
Q. Could you comment about the competitive environment, and in particular about Microsoft’s Cosmos?
A. Sure. We feel very comfortable about our competitive positioning. We customers who have tried Cosmos and frankly the feedback we’ve heard has not been that positive. They’ve tried to make Cosmos work because they were already in Azure, and have realized that Cosmos just couldn’t meet their needs. They came to MongoDB.
We’ve had some large relationships who have strategic partnerships with Microsoft who had every incentive to try and make Cosmos work and it didn’t work for them. Now, there’s no question, being a cloud provider that they’re definite getting business. But when it comes to head to head, we’re feeling very comfortable of our positioning and we feel very excited about the future.
Q. What is aggregation framework?
A. What an aggregation framework is, in layman’s terms, is the ability to process and analyze data inside the database.
Most NSQ databases do not have this capability. It’s one of the things that really distinguishes MongoDB from other more modern databases.
Relational databases have this capability, but relational databases suffer from the problem of being an architecture that was built 40 years ago and so they have trouble scaling and having resiliency in their platform.
So what MongoDB does is gives you the benefits of a relational database with the power to scale and the flexibility of a modern database, which is why it’s such an attractive platform for developers. And so that’s essentially what the aggregation framework does and it’s a very attractive part of our value proposition.
Q. You said that people are in the evaluation process of MongoDB 4.0 right now. Could you discuss the level of interest you’re seeing and how optimistic are you of a potential uplift from this product.
A. The interest has been extremely high. This has probably been the most requested feature for a number of years. So when we announced it in February, there was a huge amount of receptivity. It’s also generated a bunch of new engagement with customers and prospects and frankly it’s allowing us to be more strategic. The beta version of the software is available for people to use and test. The feedback has been very positive and we expect to make it generally available it in the near future.
My thoughts, revised: They are growing the business very fast, but not shrinking the losses. The conference call reassured me that there is an enormous amount of stuff going on and I feel much more positive after reading it.
Best,
Saul
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