Database company MongoDB (MDB 6.14%) is generating much of its growth from Atlas, a cloud database service that frees developers from needing to manage their own infrastructure. Atlas now accounts for about half of the company's total revenue, and it's growing at a breakneck pace.
A longer-term growth opportunity for the company is Realm, MongoDB's mobile and web application development platform. Realm is built around and requires Atlas, offering developers the ability to host static content, run backend cloud functions that would normally reside in a server application, and sync data between Atlas and mobile devices with ease. A developer can build their entire application on MongoDB Realm.
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Missing some key features
For a developer already using Atlas to back their application, adopting Realm makes a lot of sense. Realm handles user authentication and rules for accessing the Atlas database, allowing developers to integrate Atlas into their applications without much hassle.
The problem is that Realm falls short of alternatives in one important way. Let's consider a web application. Modern web development is complicated. Frameworks like React, built by Facebook, have made the process of developing a web app easier. But any modern web application needs to go through a build process to turn the source code into a set of final, optimized files ready to be served to end users. Depending on the tools, frameworks, and systems the developer uses, this build process could involve many steps.
Platforms like Netlify and DigitalOcean's App Platform handle this building automatically. A developer can push their code to a repository hosted on Microsoft's Github, and these platforms automatically pull the code, spin up a server, run the necessary build commands, download any third-party dependencies, and deploy the application.
MongoDB's Realm, in contrast, does not do any building at all. Developers must build their apps on their own machines and push the final set of files to Realm. If an app uses Realm's cloud functions, any third-party dependencies must be manually uploaded to Realm. The process is not nearly as streamlined as it could be.
The upside to using Realm is first-class access to MongoDB's Atlas database. The downside is that the platform requires some extra steps to get an application up and running. Realm has a lot of useful features, like robust rules for determining how users access data stored in an Atlas database. But it's not as easy to use as other platforms.
A long-term growth opportunity
While Realm has some flaws, MongoDB has the right idea. The value proposition is simple: Instead of a developer needing to spin up cloud servers to run backend code and interface with Atlas on other cloud platforms, they can instead use Realm's features to accomplish the same thing.
Atlas is not the only managed MongoDB database available. Cloud infrastructure provider DigitalOcean, for example, recently launched a managed MongoDB database of its own. By building products like Realm around Atlas, MongoDB can make its own managed database offering more appealing than the alternatives.
The database is going to remain MongoDB's core product and core focus. Atlas will likely be MongoDB's biggest growth driver for the foreseeable future. But in the long run, the company can generate additional revenue and strengthen the appeal of Atlas by building out an ecosystem around the cloud database. Despite its shortcomings, Realm represents a big step in that direction.
