The Atlas cloud database has become MongoDB's top growth driver.
GettyMongoDB (MDB) is taking share in the database market as more organizations move away from legacy technology. An expanded partner channel is helping in the endeavor.
The operational database software market is on track to top $40.4 billion in 2022, up from an estimated $31 billion this year, according to William Blair & Co. It’s expected that much of the incremental growth over the period will come from more modern applications and new workloads.
MongoDB wants its next-generation database platform to be the go-to choice for building modern applications, especially mission-critical ones that face the customer and generate revenue.
Investors have been willing to pay up for shares of MongoDB because they see a big opportunity ahead based on the company’s ability to take share from Oracle, the market leader. In addition, MongoDB is well positioned to win new workloads in an expanding market.
The company went public in October 2017 at $24 a share, with an opening trade at $33. At the all-time high of $184.78 reached in early June, the shares were sporting a YTD return of 120%. Now off nearly 18% from the record high, the stock still trades at 22 times the midpoint of the latest revenue guidance range for FY’20 (ending January).
While MongoDB is expected to lose $1.06 a share this year, the top line is growing rapidly. Last year, revenue rose 61% to $267 million. In fiscal Q1 (ended April), revenue growth accelerated to 78% from 71% in the previous quarter.
Critical to MongoDB’s success is its robust partner network. In FQ1, the company experienced its best quarter ever for partner-led business, including with the top global systems integrators (SIs). After building trusted relationships with many organizations, the large SIs are often called in to do custom application development. It makes sense that SIs would deploy a modern database platform to build all of the new applications.
MongoDB works closely with a number of leading SIs —including Accenture, Capgemini, Infosys, TCS and Cognizant. Given their strong relationships with customers, SIs can help MongoDB boost its business momentum through reduced sales cycles and increased deal sizes. The company also has a promising partnership with IBM, which in the latest quarter drove several large deals, including a big win with one of the world’s largest insurance companies.
MongoDB’s core on-prem solution is Enterprise Advanced, but it’s the company’s newer Atlas database in the cloud that has become the dominant growth driver. In FQ1, Atlas revenue jumped 340% and accounted for 35% of total revenue (up from 14% a year ago), putting it on an annual run rate of about $125 million. The Atlas customer base in FQ1 rose by more than 900, with the total count now at 12,300+, up an impressive 180% from the year-ago level.
Atlas got a nice boost in FQ1 when it won a deeper integration with Google Cloud Platform (GCP). The expanded partnership means Google will offer Atlas as a featured service on GCP, integrated directly into the console and marketplace, providing a unified user experience. MongoDB will run joint marketing efforts with Google. Sales reps at Google are “highly incentivized” to sell Atlas, according to MongoDB management.
In April, MongoDB strengthened its mobile presence via the $39-million acquisition of Realm, provider of a popular mobile database. More than 100,000 developers use Realm.
The Realm founders came from Nokia, so they have ample experience building databases that are optimized for mobile devices. The Realm solution set includes a sophisticated data synchronization protocol designed to easily move data back and forth from mobile devices to the backend server.
The Realm acquisition fits well with Atlas and complements MongoDB’s Stitch serverless platform. Stitch makes it easier for developers to build modern cross-platform applications on MongoDB by eliminating the tedious work of managing the backend of the process.
For FY’20, MongoDB is now forecasting revenue of $375 million to $381 million (representing growth of 41.5% at the midpoint), revised upward in early June from the initial guidance range of $363 million to $371 million.
The latest FY’20 consensus revenue estimate of $381.8 million is above the high end of the new range, indicating Wall Street thinks the most recent guidance is too conservative. MongoDB has beaten the top-line consensus estimate by an average of 10.5% in each of the past four quarters, putting the revenue bias to the upside. The latest Street-high revenue estimate of $395 million represents growth of 47.9%.
https://www.forbes.com/sites/robertdefrancesco/2019/06/30/mongodbs-expanding-partner-network-helps-fuel-database-market-share-gains/
2019-06-30 18:30:06Z
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