MongoDB outperformed the tech sector a few times over the past 12 months, most notably during Q4, when MongoDB managed to trade between $65 and $80. The stock recouped losses by early December, when MongoDB reached new highs at $90 per share. By March, MongoDB had gained more than 50% off its new highs to $152 in March.

MongoDB’s Atlas has proven to defy gravity even in the face of AWS launching a competing product called Amazon DocumentDB in January. This sent shares of MongoDB down 15 percent, with a few larger investors exiting based on the news, but the company quickly shrugged it off.

The first quarter results reported a 78% year-over-year increase in total revenue with a 82% increase in subscription revenue. Notably, the company reported first-quarter net losses of $33.2 million, or 61 cents a share, compared with losses of $26.6 million, or 53 cents per share, in the year-ago period. Adjusted losses were 22 cents a share.

AWS Pitches MongoDB Atlas at OSCON

Amazon’s DocumentDB advertises MongoDB compatibility in its headline throughout the AWS website while MongoDB’s Atlas website focuses on the differences between the two products. AWS wants to be seen as a friend, but MongoDB thinks they are more of a foe.

Amazon’s NoSQL JSON document database is not based on the MongoDB server, however, and there are key differences which AWS’s product is unlikely to compensate for. 

Here are a few:

AWS walks a razor edge between capturing the NoSQL database revenue segment or disrupting the customer base, who now have many options in cloud, including Microsoft and Google Cloud – both motivated to compete with AWS from any angle. Trying to disrupt MongoDB’s Atlas could have the opposite effect on AWS as developers are notoriously tribal. 

Not surprisingly, last quarter, MongoDB announced a new business partnership with Google Cloud Platform with MongoDB’s Atlas integrated into the GCP console. MongoDB also announced new product features, including Atlas Data Lake, Atlas Full-Text Search and increased availability of MongoDB Charts. These upgrades will be hard for larger, more diversified tech companies (like AWS) to keep up with.

Needless to say, I was on the edge of my seat at OSCON when Amazon presented a keynote and pitched MongoDB Atlas to the crowd. At OSCON, Amazon stated that “AWS effectively endorses MongoDB Atlas as the segment winner” and that MongoDB Atlas is an “AWS reinvent 2019 top level sponsor.” Amazon also stated that Atlas growth has continued on the platform after the AWS DocumentDB release.

Takeaway:

The financial markets guessed wrong about AWS’s ability to compete with MongoDB. We see very little evidence that AWS’s DocumentDB has been a success with Amazon changing its tone at a recent software developer conference. One area that I have written extensively about is developer mindshare, as software developers are not easy to convince. You can access my analysis on Nvidia and developer mindshare here – the time to learn a new AI and ML platform is one reason I remained long on Nvidia during the crypto sell-off.

“Imitation is the sincerest form of flattery, so it’s not surprising that Amazon would try to capitalize on the popularity and momentum of MongoDB. However, developers are savvy enough to distinguish between the real thing and a poor imitation,” Dev Ittycheria, MongoDB’s CEO

In addition, IDC updated its forecast and expects the worldwide database software market to grow from $64 billion in 2019 to $98 billion in 2023. MongoDB’s Atlas is positioned to capitalize on this growth, especially as a flexible option for running applications on-premise, in a private cloud, or a private cloud, without being locked into any one cloud vendor.

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