Cloudera and MongoDB execs: Time is running out for legacy vendors

Database upstarts' revenues grow as sales plans take shape

"Antipathy" towards legacy database vendors is at an all-time high because Internet of Things data is arriving too fast for them to handle – so say execs at two competitors that went public last year.

Both Cloudera and MongoDB released positive results for the second quarter of fiscal 2019 yesterday.

For the three months to 31 July, the former Hadoop-flinger Cloudera reported a 23 per cent boost in revenues to $110.3m and the NoSQL biz MongoDB saw a 61 per cent increase to $57.5m.

Execs used earnings calls to brag about, er, disrupting the $16bn market that has historically belonged to the likes of Oracle, Microsoft and IBM.

"I'm coming close to my four-year anniversary [at MongoDB]," said CEO Dev Ittycheria. "I would say the antipathy towards the legacy vendors has never been higher.

"So we do see customers very, very motivated to move off their legacy platforms as a function of their relationships with those vendors."

Ittycheria added another reason customers were moving away was that the architecture "is, frankly, old" and there is greater interest in modern platforms that scale "gracefully" and allow users to add features quickly.

Cloudera's chief strategy officer Mike Olson said a lot of customers needed to step off legacy platforms because "IoT data is arriving way too fast and at a much larger scale than those vendors can handle".

His firm plans to make the most of this, he said, offering as an example Cloudera's Step-Up programme aimed at migrations from IBM's end-of-life Netezza.

There is "a great opportunity to go capture those workloads, modernize that infrastructure... and give them much larger scale and powerful analytic program," he said.

Cloudera: Business transition taking root

Both firms have been through recent rejigs of sales, although Cloudera's was part of a more major change following record net losses of $385.8m in fiscal '18.

As well as dividing the business into three units (machine learning, analytics and cloud), it split sales into two: logo-chasers skilled at bringing in new customers and those focused on expansions. It also aimed to be more disciplined in chasing only target markets.

Two quarters on, and boss Tom Reilly said the most of the disruption was behind the firm, with the changes having taken root sooner than he thought.

"Impressively, the focus on new customer acquisition in our target market resulted in a more than 30 per cent increase in our initial deal size for the quarter," he said.

The firm also reported 568 customers beginning with annual recurring revenue greater than $100,000 – which is a key measure for the firm's new approach – with 30 added in this quarter.

However, Cloudera is still slimming down its operations to keep its losses in check, although not as severely as in the first quarter of fiscal '19.

Sales and marketing costs still fell $7m year-on-year to $55.2m, while R&D dropped $4m to $39.8m, and general and administrative spending fell from $18.5m to $17.1m.

MongoDB: Dropping ACID, raising capital

MongoDB's shift in sales methodology, meanwhile, has seen a focus on conversations with the C-suite – MongoDB having been built as the dev's database.

"We're asking our sales people once they do sufficient kind of homework on an account to go high in the implementation as quickly possible," said Ittycheria.

He said this was aimed not only at assessing where the potential in using the firm's tech is, but also to educate senior stakeholders and make it easier to get a follow-on deal, because the higher-ups know the product better.

The firm also reported that its decision to offer multi-document ACID transactions has changed the level and tone of conversations "radically", allowing it to expand the use cases it can go after.

The firm has also recently raised capital, a move that Ittycheria described as "opportunistic", saying there wasn't a near-term need for the cash, but that it would benefit them in the long run.

"We saw an opportunity to raise a lot of cheap capital," he said. "It clearly allows us to be more aggressive, should the opportunity arise. But right now, we have no near-term pressing needs to use that capital." ®

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