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.
At this point, industry consolidation begins and accelerates over time. The weaker companies either look for small niches where they can successfully compete away from the focus of the bigger players, (Aerospike for example appears to be doing this) or look for opportunities to be acquired (like FoundationDB and Tokutek). Others go out of business.
This process has played out over the last eight or so years. The NoSQL industry started in 2006 – 2007 when NoSQL open source projects and associated companies started to come onto the scene and get VC funding.
NoSQL’s value was readily apparent and quickly attracted lots of interest and investment. According to nosql-databases.org there are currently 150 NoSQL databases, although many don’t have a company backing them.
By 2013, the leaders began to emerge and distance themselves from the rest of the pack. Today, Couchbase, DataStax and MongoDB are broadly recognized as the clear NoSQL leaders. This is evident in the massive funding we can raise, as well as the very strong global companies that are building mission critical applications on our technologies.
In 2015, the three leaders will continue to significantly distance themselves from the pack, as smaller start-ups struggle to raise money and get acquired. As a result, over the next 12 to 24 months many of the smaller players will be acquired and the weakest will go out of business. It’s what always happens when new and needed technology markets grow rapidly and mature.
Developers and companies need to be increasingly aware of this new market phase as they decide where to invest their time and money.
They should look at a NoSQL vendors’ position relative to other vendors, look at the product roadmap and investment level, and speak with customers who are adopting the technology for mission critical applications. This diligent evaluation will not guarantee that the NoSQL solution chosen will remain independent, but it makes it a lot more likely.