There has been plenty of talk about open-source databases growing faster than those belonging to tech dinosaurs like Oracle, but nothing tells a story quite like cash.
MongoDB and Basho, pioneers in NoSQL, yesterday separately announced that they are each receiving further wads of cash from the venture capital sources.
Open-source document database MongoDB is to receive $80m from its backers and maker of the Riak NoSQL key-value data store, Basho, is taking $25m from its own.
I would call these two companies startups, but that’s stretching a point: MongoDB was founded in 2007 and Basho in 2008.
Also, both sets of money are Series G. Typically, startups work through rounds A to D and then either stop sucking up cash or go public. Series G is rare, unless your VCs are happy bobbing mid-bubble.
MongoDB has now taken $311.1m from 12 investors and Basho $57.5m from five investors.
In funding terms, at least in recent times, it is extremely rare for an enterprise business to crack a G-round. This is certainly not the case with consumer apps and businesses – Uber took $2.4bn in two separate funding drops in 2014 – but in enterprise technology, nobody is breaking the G-barrier.
What’s happening here?
NoSQL is supposed to be manifest destiny: a perfect money storm of big, unstructured data supposedly unsuited to the relational databases that have dominated business. Customers have tired of forking over hefty licence fees to Larry Ellison’s Oracle, the thinking goes.
On paper there’s plenty of room to grow at Oracle’s expense: this one single company accounts for half of the relational database market. Everybody else – Microsoft, IBM and some others – make up the remaining 50 per cent.
And so both firms are growing – or so they claim.
Basho reckons to have displaced Oracle at the NHS in the UK – although it doesn’t say where or how much, and says it has also had success in financial services, gaming and retail.
Mongo says it is used by more than 2,000 customers, including 34 of the Fortune 100, with nine million downloads.
The company reckons there’s a “major secular trend” underway in databases with the market reaching some kind of tipping point.
“These additional funds mean we can further accelerate the delivery of world-class DBMS technology while scaling the business to meet the needs of our users and customers globally,” president and CEO Dev Ittycheria said in a statement.
Basho claims the milestones it hit in 2014 were an 88 per cent increase in bookings in the second-half of the year compared to 2013, with 87 per cent of the year’s money coming from licensing and 13 per cent from professional services.
But 2014 was difficult for Basho. It named a brand-new CEO and chief technology officer in March: Adam Wray, who’d been CEO of Tier3 and Dave McCrory, who came from Warner Music Group and VMware where he’d served as CTO.
Basho’s cash will expand development and marketing.
“I have confidence Basho will establish itself as a leading unstructured data solutions provider in 2015,” Basho chairman and managing director of VC investor Georgetown partners Chester Davenport said in a statement.
What the G-force proves is that, while opportunity exists, investors are struggling to square the companies’ popularity with their ability to make money profitably.
While customers are buying open-source databases and data infrastructure, the cash isn’t necessarily flowing as they or their backers would wish.
One reason is the nature of the beast: being unable, or unwilling, to charge Oracle-scale prices simply further delays the date when funding’s no longer needed.
Another is that Basho and MongoDB want to replace decades of relational in the enterprise – a place where nobody buys anything at speed and where they must overcome decades of inertia of buying what’s known and what’s safe.
To their credit, both are taking small increments of cash to keep going – Alfresco, founded in 2005, took $45m in a round of series D in August 2014. Andreessen Horowitz and others showered year-old, real-time messaging startup Slack with $120m in October.
But there’s bigger problem – a spectre at the feast. And it’s the kind of spirit that means we could see Basho and Mongo break through single letters into size AA.
As these two hit Series G on their runway to take-off, it seems investors are willing to back their belief in this “secular trend”.
But, as one industry source pointed out to The Reg, backers with money would be wise to consider the Canonical experience. Canonical is responsible for one of the industry’s most popular Linux distros and dominates cloud. Last year 55 per cent ran OpenStack with Ubuntu - Hewlett-Packard among them with 60 per cent of Amazon instances on Ubuntu.
And yet, founded in 2004, Canonical remains steadfastly private. Sources tell us its multimillionaire founder Mark Shuttleworth has been funding things.®