Open ... and Shut Increasingly the third standard within enterprises for databases, MongoDB, has been claiming a lot of victories lately. In relative terms, it has become the second-hottest skill to have on one's resume, right after HTML5, according to Indeed.com job trend data. And despite plenty of hating on its technology, with one person telling me recently that "it sets database technology back 25 years," MongoDB continues to get deployed for numerous, large mission-critical applications.

So what does this mean for 10gen, MongoDB's primary corporate sponsor and developer? After all, "lots of users" doesn't always translate into "lots of revenue" in open source land. In fact, it's often the case that the easier it is for developers to adopt and deploy open-source software, the less willing they are to pay for it. I've termed this "the open source dilemma," and it has kept many an open source company from capitalizing on the popularity of the open-source projects they sponsor.

Not so at 10gen, as Max Schireson, 10gen's president and former executive at MarkLogic and Oracle, told me in a phone interview earlier this week. There are many reasons for 10gen's success, but one primary reason, and one that almost never gets mentioned, is the genius of 10gen's pricing strategy.

10gen has been on a tear, signing up over 500 paying customers, including Disney, Intuit, Craigslist, and Viacom, mirroring the broader NoSQL industry's shift into the enterprise market and away from its early-adopter web customers. This translates into sales growing growing by more than 50 per cent sequentially in each of the past five quarters, which helped to attract a recent $42 million fifth round of funding.

Part of this success stems from the MongoDB technology. Or, rather, from how approachable that technology is. As Schireson describes it, MongoDB hasn't broken away from the rest of the NoSQL pack due to superior scalability, perhaps the primary aim of all NoSQL databases.

Rather, MongoDB shines because of its ease of use, whether a developer is using it in a large-scale application that spans hundreds or thousands of nodes, or in a single-server application that has no need for scale. Even my friend who gnashed his teeth at MongoDB's alleged technology failings admitted that MongoDB is "fast to get started and a pleasure to use from the dev[eloper] perspective."

But all this MongoDB adoption simply fills the lead funnel for 10gen. It doesn't close sales.

What does help to close sales for 10gen is the real-time nature of the applications being built with MongoDB. Like a traditional open source vendor, 10gen offers support subscriptions. Unlike many open source companies, a significant percentage of MongoDB users will opt for a paid subscription given that the applications they're building tend to be real-time, mission-critical applications. These customers can't afford downtime caused by the database. This is very different from other internally-facing technologies that are important but not necessarily real-time.

And because MongoDB adoption is so easy, it tends to get injected into second and third (and fourth) projects within an enterprise, building up a company's dependence on the technology and, hence, its willingness to pay for a support subscription.

Because of this, 10gen doesn't need to gate access to MongoDB in ways that many open source companies traditionally would have had. Yes, 10gen does offer some commercial extensions to MongoDB (eg, the much-maligned "Open Core" model), but Schireson characterised these as "slight" and not the company's primary focus, which is "to make MongoDB the most widely used NoSQL database. Period. We don't want to gate adoption" by encumbering it with proprietary bits.

And while MongoDB is licensed under the Affero GPL, a strong copyleft licence that isn't likely to comfort the hearts of the legal teams within would-be customers, Schireson is quick to point out that since all of MongoDB's drivers are Apache-licensed, and a developer's application is separate from the MongoDB database, MongoDB applications are not affected by the AGPL. "We don't want and don't believe that users should be forced into making their app open source."

All of which contributes to 10gen's success but, as mentioned, 10gen's pricing may be the real key to turning MongoDB's rampant developer success into corporate gold.

Schireson walked me through the history of Oracle's database pricing. While the hardware used to run Oracle databases has become progressively cheaper, Oracle has remained relatively expensive, causing a fair amount of grumbling among Oracle's customer base. While 10gen doesn't compete with Oracle for complex transaction-heavy workloads, in just about every other area it's increasingly viewed as a serious contender, and its pricing is dramatically lower than Oracle's and, importantly, much closer to the other costs associated with deployment of an application.

As Schireson wrote on his blog, and as we discussed in our conversation, it's all about leaving money on the table so that buyers have money left over to buy…more MongoDB support subscriptions:

Now we’ve arrived at my challenge. I don’t want to fall into the trap. I want to price MongoDB subscriptions at a price point that customers love. I want to leave money on the table. That money that I leave on the table is what makes economic buyers excited about their purchase. I want to save a customer millions of dollars and charge them a modest fee. Why? Because when that happens they’ll be aggressively looking for the next place to use MongoDB. They will tell their friends not just about how great the product is, but how easy 10gen is to deal with and what great value we provide. Short term revenues may be less, but if this makes the business grow faster over time revenues will be much higher.

Charge less, sell more. It's the same pricing intelligence that has carried Red Hat to a billion dollars in revenue, but it's often in short supply in the software world. 10gen has nailed it.

And "nailing it" is a big deal right now, because the potential market for MongoDB is big and growing much bigger. Roughly 60 per cent of the world's databases are operational in nature, which is where MongoDB resides, versus the remaining 40 per cent of databases that are analytical databases, which is the area in which Hadoop competes.

Which is why when The 451 Group pegs the NoSQL market at $215m by 2015, I can't help but think it's sandbagging the numbers somewhat. 10gen is not struggling to monetize the widespread adoption of MongoDB, and as the company adds further capabilities/value to its subscription product, I think we'll see its revenue take off even more, especially as the trend away from using NoSQL solely for web applications accelerates.

No, success is not guaranteed for 10gen. Interest in MongoDB may wane, and as it becomes even more pervasive customers may grow so familiar with the technology that even the real-time hook may not be enough to justify a support subscription. But these are all solvable problems, and based on 10gen's intelligent pricing strategy, the company seems well-equipped to solve them. ®

Matt Asay is senior vice president of business development at Nodeable, offering systems management for managing and analysing cloud-based data. He was formerly SVP of biz dev at HTML5 start-up Strobe and chief operating officer of Ubuntu commercial operation Canonical. With more than a decade spent in open source, Asay served as Alfresco's general manager for the Americas and vice president of business development, and he helped put Novell on its open source track. Asay is an emeritus board member of the Open Source Initiative (OSI). His column, Open...and Shut, appears three times a week on The Register.