Apple’s acquisition of FoundationDB a couple of weeks ago and Percona’s more recent acquisition of Tokutek raised many questions about whether the NoSQL industry is consolidating. It is and this is prompting lots of questions around the risks for developers and operations engineers that invest their time and money in NoSQL technologies. Consolidation is not bad for an industry; it is simply a sign it is maturing. Over the next 18 to 24 months we’ll likely see many of the weaker companies get acquired, refocus on small niches, or go out of business.

The evolution of new, rapidly growing industries is easy to predict. During the first stage of industry formation, many companies get similar amounts of funding from VCs to build their products and businesses. As a result, dozens of solutions are available for early adopters. At this stage, it can be hard to predict the winners and losers – making early adoption a potential risk.

During the next stage, the leaders separate themselves from the rest of the pack. Their products are a better fit for the market and more users gravitate to them. As a result, they are able to raise more money at higher valuations, which in turn allows them to make bigger investments in their product, technical support channels and sales channels. Meanwhile, the smaller companies with less traction get lower valuations, are able to raise less money, and are left with much less money to invest in innovation – typically an insurmountable challenge during a period of hyper-growth. The cycle of better market traction, increased funding and larger investments operates for a few years until a small group of leaders significantly separates from the rest of the pack. Couchbase, DataStax and MongoDB are the three NoSQL players that have clearly separated themselves from the rest of the pack.

Posted by Bob Wiederhold

Bob served as President and CEO of Couchbase from 2010 to 2017. Until an acquisition by IBM in 2008, Bob served as chairman, CEO, and president of Transitive Corporation, the worldwide leader in cross-platform virtualization with over 20 million users. Previously, he was president and CEO of Tality Corporation, the worldwide leader in electronic design services, whose revenues and size grew to almost $200 million and had 1,500 worldwide employees. Bob held several executive general management positions at Cadence Design Systems, Inc., an electronic design automation company, which he joined in 1985 as an early stage start-up and helped to grow to more than $1.5 billion during his 13 years at the company. Bob also headed High Level Design Systems, a successful electronic design automation start-up that was acquired by Cadence in 1996.

Leave a reply