MongoDB Inc at UBS Global TMT Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : So I thought that might be a good place to start is, you can give us a quick overview. How is the business doing?

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : You got it all, we're done. So actually -- but what you're talking about, I think that's probably a good place to start is, we've seen companies like Oracle and Microsoft and IBM build massive businesses in the database market but with a very different architectural approach. And now we're seeing new SQL databases, in particular, document databases in the case of MongoDB, start to come up and be a disruptor. So maybe just starting it with that. I mean, why is this shift? Why are developers out there looking for alternative approaches to database?

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : One of the topics that we hear a lot about is companies looking to capitalize on a lot of the things that you've mentioned, which -- about being more agile, having more flexible software architecture, and there's different ways to get to that angle. Some of it is replatforming existing apps, some is building new apps. From your perspective, do you have a view on how much of the momentum you're seeing in the marketplace at this point is a function of new applications going first with you versus companies actually taking some of these existing legacy applications that might have been built on Oracle and rewriting them for Mongo? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. DECEMBER 10, 2019 / 3:45PM, MDB.OQ - MongoDB Inc at UBS Global TMT Conference

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : So earlier, you talked about relational databases were optimized for a certain type of world. That world is no longer the world that we live in. But if you think about constraints that current modern software architectures have to operate around, whether it's connectivity, or being in a hybrid environment, or all these different things, what are sort of the scenarios or use cases that really play to the strengths of what MongoDB is optimized to do?

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : And if you think about the traditional legacy database market, there's a whole ecosystem that goes around it. There's companies like Quest that sell entire businesses on managing databases, there's millions of people whose career is being a DBA. How does that sort of change, or does it change or does it even exist in a MongoDB world?

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : And I think maybe this kind of sort of extends from what you were just talking about. But I think one of the things just broadly we've been trying to figure out is, you've got a lot of technologies that have strong evangelism from the developer community. But ultimately, it's a different person in the organization that's signing the check, particularly as you get bigger and bigger and bigger deals. And so how does that -- maybe you can just take it a step back. How does MongoDB typically come into a big enterprise? Is it a developer starts a project and then it grows? Or do you have get (inaudible)...

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : And you touched on it at the earnings last night. I mean Atlas continues to be a really standout performer in this business that's already strong. And maybe just to start, on the call last night, Dev outlined a couple -- or a few sort of points of why he thinks that Atlas is such a great addition to the business around faster innovation, greater insight into how your customers are using the product, broadening your reach. It'd be interesting to sort of talk through all those points because they all seem pretty important. But let me just start with the first, and I think you did touch on it a little bit with the apps analogy and updates on your phone. But it keeps -- how does having Atlas accelerate the innovation cycle within -- and maybe actually start with, just for the audience, what is Atlas? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. DECEMBER 10, 2019 / 3:45PM, MDB.OQ - MongoDB Inc at UBS Global TMT Conference

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : And just looking at how you're sort of balancing Atlas versus the traditional Enterprise Advanced offering, is it largely the same code base and to the extent you're doing R&D, it's fungible between the two? Or are there sort of distinct investments that are happening within each of those platforms?

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : Okay. Okay. And maybe just sort of looking at the competitive landscape, because Atlas certainly seems to be performing very well, but there are other cloud providers like Amazon that have their own flavor, even using some older MongoDB technology. So can you just talk about that competitive dynamic? DocumentDB got a lot of attention. Maybe it hasn't been the impact in the market that people feared it would be. But what are you seeing on that? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. DECEMBER 10, 2019 / 3:45PM, MDB.OQ - MongoDB Inc at UBS Global TMT Conference

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : Great. I think -- I mean, this is a sort of similar question, but if I look at just broader cloud adoption, we've seen things like storage and compute take off pretty rapidly. The platform-as-a-service market has been slower, database in the cloud has been slower. Oracle is another one that's trying to get database in the cloud working, and it's been very difficult. Clearly, you guys have not had those issues. So do you think that's purely a product -- a function of product? Or who are the types of customers that are gravitating towards Atlas that have maybe not been as enthused about the other offerings? It's just -- it's sort of a striking contrast.

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : And maybe just on -- jumping around a little bit. But we talked about some of the hyperscalers looking to compete with you, without the partner, with you and in that multicloud way. So could you talk about that a little bit?

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : Great. And you mentioned that the lens that you look at the business through, to a certain extent, is by channel. So let me just talk about that a little bit. I mean you mentioned self-serve, you mentioned being more enterprise-centric. But it's sort of -- is it the developer starts, that's the lead and then you start selling? Do you have more of an outbound direct sales effort? How does that kind of work?

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : Okay. And maybe just taking that to the business model a little bit. As you think about your envelope of OpEx that you have to spend, what are the relative prioritization around R&D versus driving the self-serve channel? Do you think digital marketing efforts versus adding more quota carrying reps? Where are you spending your dollars now? Serge Tanjga;VP, Finance and Business Operations That's probably the hardest part of Michael and my job in the sense that the list of interesting projects is very long and the returns are very good. So what we found is that our -- it's not the financial constraint or the returns constraint, it's really the operational constraint. How quickly can we scale the organization? Because most of this, in one form or fashion, comes down to head count. Head count is 70%, 80% of our OpEx. So can we find individual contributors, whether it is in R&D or in sales? Can we ramp them up? Can we then give them management capability? Because people who grew up in our culture will do better as managers, and we'll do more of that. So it's really -- scaling the organization is the primary governor as opposed to lack of interesting financial alternatives. And secondly, also, all within the context of a very large market where we feel like we're the best product.

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : I have a couple on here, too. So 1 question is, if you look at the growth in Atlas, is that entirely new business? Or are you seeing existing business move into the cloud? Or maybe extend that beyond that, are you seeing customers using both together? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. DECEMBER 10, 2019 / 3:45PM, MDB.OQ - MongoDB Inc at UBS Global TMT Conference Serge Tanjga;VP, Finance and Business Operations So to this date, it's almost exclusively new business. And specifically, in Atlas, coming back to some of your previous questions, Atlas is largely driven by new applications as opposed to replatforming, and that's simply a function of how easy it is to adopt, and it's just also the fact that the growth of new applications is enormous, and frankly, large enough to drive our business for a while.

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : Okay.

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : And just on that, I mean, if you have a customer that's -- because you mentioned a lot of new apps for Atlas and maybe there's refractory applications that are on the enterprise, but would it be a scenario that you would have some kind of hybrid environment that's sharing data between -- I mean, do they interoperate in that way? Or are they still sort of distinct silos to some extent?

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : Okay. So maybe just 1 last question. So to close it out, we've spent a lot of time talking about technology, but there also are implications for that in your business model. So one of the things that Dave has talked about is the success of Atlas. The dynamics around billings, around profitability are a bit different than what you saw with the enterprise business. So first, can you just sort of touch on what those differences are? And then secondly, as you try and forecast out the business, how do you compensate for that? How do you think about it?

Question: Jennifer Alexandra Swanson Lowe - UBS Investment Bank, Research Division - Analyst : Great. I think that's it for time. So thank you both so much for being here today, and thank you to all of you for listening.