Amazon CEO Andy Jassy, who previously led AWS since its inception in 2003.
Dan DeLong/GeekWire
The $1.25 billion data-management company DataStax was on track to go public until the cloud titan Amazon Web Services came out with a competitor that threatened its business. The new service from the Amazon cloud subsidiary was built on top of the open-source database Apache Cassandra, the basis of DataStaxs flagship product.
A controversial leadership change and over 60 layoffs came soon after and made DataStaxs future look uncertain. But Chet Kapoor, its new CEO, devised a plan: Strengthen the companys appeal to developers using its loyal community of users as a bulwark against competitors. This strategy isnt unique to DataStax. Its gaining ground across several database companies, including MongoDB, Confluent, EDB, and Couchbase, that are looking to challenge the database giants.
AWS, Oracle, Microsoft, and Google still maintain a strong hold over the database market, and theyll certainly be hard to beat. But as startups look to gain share in this increasingly competitive market, theyre beginning to view developers as an important strategic advantage.
Developers are the heart of innovation and DataStax is committed to removing barriers of scale, availability, cost and complexity for developers building modern data-driven applications, Kapoor told Insider.
While the database market used to be dominated by tech titans like Oracle, IBM, and Microsoft, analysts told Insider that the old guard was starting to lose its grip on the market. From 2018 to 2020, Oracle lost 7.1% of its market share, while IBM lost 2.5%, the market-research firm IDC estimated.
Instead, business models that cater to developers are succeeding rapidly. The financial-analyst firm William Blair described MongoDBs loyal developer community as one of the firms biggest strong suits as it has a base of over 1.5 million free users. Stripe, Twilio, and Shopify are also wildly successful companies that were able to leverage the cultlike enthusiasm of their developers against competitors.
In addition, open-source companies, those based on software that is free for anyone to use, download, or modify, are taking off because of their proximity to the developer community. Confluent went public in June and now has a $15 billion market cap. Databricks announced it raised $1.6 billion in funding at a $38 billion valuation in August. And MongoDBs market cap surged to $32 billion this month.
Successful open-source projects like Spark or Kafka can be a strategic advantage because the project and related commercial companies come to market with a community of developers they can sell to, the Greylock partner and enterprise-tech investor Jerry Chen told Forbes. More generally, looking for an advantage around go-to-market or distribution is key in competing with the big cloud.
Stephen OGrady, an analyst at the developer firm RedMonk, called this shift to more developer-friendly database software the return to the general-purpose database. Rather than specialized database models, more companies are offering ones everyday programmers can use.
Companies like MongoDB, which is on track to make well over $1 billion in annual recurring revenue, are showing they can stay competitive by fostering a loyal developer following. But market leaders can deploy the same strategy of trying to keep developers happy to stomp out competition both large and small.
AWS, for example, is well on its way to making over $51 billion in revenue this year as it promises to be a one-stop shop for developers to easily deploy software in machine learning, edge computing, and artificial intelligence. And AWS and Salesforce announced a partnership to leverage their developer relationships against competitors like Microsoft.
Microsoft, Oracle, AWS, IBM, and SAP were the five largest database vendors last year, holding over 80% of the market, according to IDC. Microsofts database MySQL and AWSs PostgreSQL remain the most popular among developers, according to Stack Overflows 2021 annual survey.
But companies still want developers on their side.
As someone who lives in Silicon Valley, I can tell you developers are increasingly important right now, Rishi Jaluria, an analyst from the financial firm RBC, told Insider. Giving developers effective tools is a no-brainer.
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