On Jan. 10, the day after Amazon.com (NASDAQ:AMZN) unveiled DocumentDB, a cloud-accessible MongoDB (NASDAQ:MDB) database-service clone built for Amazon Web Services (AWS), the upstart database provider's stock fell by more than 13%. Three weeks later, you'd hardly know there was a slide. MongoDB stock is trading for a slight premium to where it stood before the Amazon-induced haircut.
Color me unsurprised.
Amazon is effectively pitching customers on using AWS to get the best of MongoDB when there's already a more functional version of the database available on not only AWS but also on Google Cloud and Microsoft's (NASDAQ: MSFT) Azure. It's called Atlas, and last quarter this cloud version of MongoDB accounted for 22% of MongoDB’s revenue. Total cloud revenue from Atlas soared 300% year over year in the third quarter.
The following chart shows what Amazon is after with DocumentDB -- replacing or enhancing the majority of Mongo deployments hosted on-site or co-located in a data center.
Why would Amazon want to do this? MongoDB makes the world’s leading NoSQL database, meaning it’s capable of handling unstructured data such as images as easily as it handles numbers and other common data types. Mongo differs from, say, Oracle (NYSE: ORCL) in that it stores information in "documents" instead of the columns and rows of a traditional relational database. That inherent flexibility means there’s no "structured query language" for retrieving data from the system -- hence the term "NoSQL."
There's just one problem with this scenario: Amazon's version of DocumentDB uses the old 3.6 version of the MongoDB server that operates under a more wide-ranging open-source license. A newer version is licensed under the Server Side Public License, which means that those who use, modify, and redeploy the free version of Mongo, known as Community Server, as a Web-hosted service must also make their work freely available to others as open-source software.
Let's say Amazon made significant changes to the newest Community Server, beefing it up to handle all sorts of heavy-duty online processes to make it more valuable to businesses. Awesome, right? Absolutely, especially for business users getting a free database from Amazon. MongoDB, too, would benefit. Engineers there would download the newly enhanced DocumentDB for incorporating everything useful into a new version of Community Server, also without paying Amazon a dime.
This is why MongoDB chief executive Dev Ittycheria responded to the news flippantly. "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," he said in a statement supplied to CNBC. "However, developers are savvy enough to distinguish between the real thing and a poor imitation."
With MongoDB, you can't drop ACID
As a shareholder, I'd rather have seen Ittycheria respond with more grace and less snark. But he's also right: Amazon is using old technology that's freely available in Community Server, which has already been downloaded over 40 million times. And since DocumentDB is native to AWS, it makes little sense to use it unless you're already working with a vast amount of data in Amazon's cloud.
Even then, DocumentDB isn't as functional as the commercial-grade version of MongoDB that more than 8,300 customers worldwide use. We know because it's only the commercial version of Mongo -- not the free Community Server on which DocumentDB is based -- that supports "ACID" transactions across multiple documents.
ACID -- short for "atomicity, consistency, isolation, durability" -- is a set of properties that modern, enterprise-scale databases adhere to for ensuring the validity of transactions. So, for example, a bank wouldn't use anything less than an ACID-tested database for arranging and tracking cash disbursements from an ATM network. A retailer would want an ACID-tested database for following the movement of inventory. And a subscription business would want an ACID-tested database for tracking the comings and goings of its subscriber base to avoid billing errors. DocumentDB offers none of these assurances today, and it may never.
Low expectations = lots of room to grow
You'd think that would make Mongo an attractive choice in the enterprise IT community, the type of audience that reads Gartner's highly regarded industry research. If only. Gartner isn't exactly high on MongoDB right now, as the latest "Magic Quadrant" for operational database systems puts it well into the "challengers" category rather than the "leaders" one.
However, it turns out MongoDB didn't actually participate in this year's Gartner report and Gartner had to rely on "credible public sources."
Also, the company had only just announced ACID support for the 4.0 version of MongoDB at the time of Gartner's assessment. It's reasonable to expect future reports will more closely reflect Mongo's popularity among database users. (DB-Engines ranks MongoDB as the world's fifth most popular database and the most popular NoSQL database for handling unstructured documents and data.)
All of which brings us back to what Ittycheria said in his comments to CNBC. DocumentDB copies MongoDB for a good reason: It's worth copying. But for business users, the imitation appears to be nothing like the original.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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 MongoDB. The Motley Fool owns shares of and recommends Amazon and MongoDB. The Motley Fool owns shares of Microsoft. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.