Quantcast

How We'll Know If Amazon's DocumentDB Is Hurting MongoDB


In January, I said Amazon 's (NASDAQ: AMZN) plan to compete directly against MongoDB (NASDAQ: MDB) didn't worry me. The original MongoDB database has too many advantages, I argued at the time . A blowou t earnings report appears to have proved me right.

Quarterly revenue soared 71% and the customer base grew 130% , to 13,400. Of these, just 4% contribute $100,000 or more of annual recurring revenue. Notably, MongoDB's November 2018 acquisition of lightweight cloud-database provider mLab added some 4,200 customers to the roster. That makes sense as mLab served the very customers that MongoDB CEO Dev Ittycheria has said gravitate to the cloud-based Atlas version of its database, which now accounts for 32% of revenue. Amazon's competing DocumentDB is wading into a tidal wave of momentum.

A comparison graphic showing the six advantages of MongoDB versus Oracle with the leaf logo of Mongo in the middle of the graphic.

How MongoDB competes with larger, older, better-funded rivals. Image source: MongoDB.

Documenting a revolution

Yet it's also not that simple. I had it wrong when I said Amazon was effectively cloning MongoDB with DocumentDB. Instead, the e-tailer has assembled developers to write an entirely new code base underneath the familiar MongoDB interface to give customers what could be a faster and more hardened NoSQL experience in AWS than what MongoDB offers with Atlas. Or at least that's what we're being led to believe.

While it's important to remember that Amazon is making a ground-up competitor to effectively every  database -- but especially MongoDB -- outsized growth for Atlas is a wonderful indicator of continued outperformance. At the very least, it shows a willingness on behalf of developers and larger customers to trust Mongo in not just AWS but also Microsoft 's Azure and Alphabet 's Google Cloud. DocumentDB is likely to be confined to AWS.

The Foolish bottom line

Does that mean it's time to buy MongoDB shares? There's definitely room to grow. Estimates for the total annual spend on NoSQL databases was $3.5 billion as far back as 2013; newer estimates put the market at $4.2 billion by 2020. MongoDB's $267 in fiscal 2019 revenue is a fraction of the market no matter which way you slice it.

For now, all signs point to MongoDB capturing a much greater share in the years to come. It'll continue to be that way until Atlas growth slows materially as alternatives such as DocumentDB accelerate. That could still happen, but I'm just not convinced it will. Too many developers like what they're getting from the original.

10 stocks we like better than MongoDB
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and MongoDB wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of March 1, 2019

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Tim Beyers owns shares of Alphabet (C shares). The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Microsoft, and MongoDB. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Personal Finance , Stocks
Referenced Symbols: MDB , AMZN



More from Motley Fool

Subscribe







Motley Fool
Contributor:

Motley Fool

Market News, Investing












Research Brokers before you trade

Want to trade FX?