As far as a shortage of customers: as Tinker pointed out: Ford, GE, Microsoft, Google, and EMC/VMWare liked the product so much that they BOUGHT THE COMPANY with quite substantial investments. Ford has based its entire software development under the Pivotal Lab umbrella (hardly the only one).
And Treepak listed a few more happy customers: Allstate, Bluecross, Humana, Boeing, US Airforce, IRS…
Saul:
I think the concern over paucity of customers is justified. As I have pointed out before, there has been a substantial deceleration of new customers over the past 3 years:
2015: 75
2016: 180
2017: 275
2018: 319
2019 (first quarter): 339
The growth in new customers has slowed to just 16% between 2017 and 2018 and we are now seeing them project slowing subscription growth to 43% next quarter and 47% for year-end…they decline to project new customer growth rates.
However, in just the 1st quarter, they grew 20 customers compared to 44 the entire year of 2018. After further research, I am convinced they have yet tapped a very substantial larger enterprise customer pool. Their market is not the small fry…it is the very large enterprise so we should expect smaller customer numbers but that was a substantial deceleration nonetheless.
Furthermore, I would agree that $50,000 customer criteria cannot be meaningful…even if I applied that 162% net revenue expansion rate to 339 customers X the then $136,000…still just yields $46 million…well short of $350 million in subscription revenue they are on track for this year…hence the massive upselling conclusion.
But since you ask why the concern…that rapid deceleration of customer growth was enough to get my attention and IMO, rightfully so. If we assume, since they will not forecast customer growth, that they can repeat the 20 new customers per quarter, that would get them 25% growth vs the 16% growth last year. I suspect they actually do have a longer sales cycle than many here appreciated…especially dealing with the largest of enterprises.
I would also think that analysts would be really drilling down to just how they attract new customers…they are not rushing to their gates obviously. They vaguely mentioned some things they did last year to increase new customer acquisition but their S1 implied the main source is the DELL family cross selling (not their exclusive source).
And finally for the “elephant” in the room since you mentioned Hadoop…anyone know the story of how it got its name?