MongoDB stock closed 13% down after Amazon Web Services announced its own rival DocumentDB.
Analysts say this needs to be taken seriously because of Amazon’s scale and reach — but it’s too early to tell if it will affect MongoDB in the long term.
MongoDB has two key advantages more capabilities and a loyal developer following — so loyal that when Microsoft offered a competing database called CosmosDB, it had little impact on MongoDB.
MongoDB’s stock was down 13% at the close of the first day of trading after Amazon Web Services launched DocumentDB, a direct competitor to its own database business. The company, which went public in 2017, is now valued at just over $4 billion.
On Wednesday, Eliot Horowitz, CTO and co-founder of MongoDB, told Business Insider that he’s not worried about Amazon DocumentDB — rather, he said, it was a sign of “how desperate Amazon was” to do what MongoDB does. Wall Street, however, does not seem to agree, evidenced by the dropping share price.
Read more: The CTO of $4.4 billion MongoDB explains why he’s ‘not terribly worried’ that Amazon’s cloud is encroaching on its turf with a new database
“Amazon released a product that is not only competitive and directly targeted at MongoDB,” Edward Parker, director and data and cloud infrastructure analyst at analyst firm BTIG, told Business Insider. “Given Amazon’s cloud size and technical confidence, we have to take this very seriously. It has competitive implications for MongoDB.”
Notably, DocumentDB is compatible with certain older versions of MongoDB, potentially making it easier for customers to move from one to the other. For its part, DocumentDB is tightly integrated with the rest of the Amazon Web Services empire, and customers pay only for what they use.
Not all hope is lost for MongoDB, though, says Parker. What makes MongoDB stand out is its enthusiastic developer following. That enthusiasm might mean that AWS has trouble swiping these customers away from MongoDB, no matter how easy Amazon makes it. Besides, MongoDB has been around longer, and is more fully-featured.
“MongoDB has a very capable document database with a very passionate and large developer base,” Parker said. “Amazon has advantages over MongoDB in terms of scale and overall resource preponderance. The question is the extent to which Amazon can attract MongoDB developers.”
In an interview with TechCrunch, MongoDB CEO and president Dev Ittycheria was more confident, saying that “imitation was the sincerest form of flattery” and that “developers are technically savvy enough to distinguish between the real thing and a poor imitation.”
“MongoDB will continue to outperform any impersonations in the market,” Ittycheria told TechCrunch.
MongoDB has a secret weapon
In a note to clients, BTIG analysts pointed out that MongoDB has weathered similar storms before — a competing database from Microsoft Azure, called CosmosDB, failed to make a significant dent on MongoDB’s momentum.
“CosmosDB is a document database from Microsoft which is the de facto number 2 hyperscale cloud provider,” Parker said. “In theory, you would have expected that to be viable competition, but it hasn’t …read more
Source:: Business Insider