Dev Ittycheria: Thanks, Ittai.
Operator: Thank you. Our next question comes from Kingsley Crane with Canaccord Genuity. You may proceed.
Kingsley Crane: Hey, thanks for taking the question. So really encouraging to see the expanded partnership with Azure. I wanted to touch on the joint focus and incentive to migrate Mongo to Atlas on Azure. So is this a discussion you’re having with customers upon renewal? Are you socializing this with them sooner? And then does this make Azure the de facto preferred platform to run Mongo?
Dev Ittycheria: No. What I would say is the work that we’ve done with Azure and I really want to complement our partner team who did a lot of work in making that deal happen, but it’s really a function of a few things. One Azure like most other cloud providers see how popular MongoDB is both with developers and how popular it is on their own clouds. Two, they recognize that their clones that they offer are just not at the same level of features and performance that MongoDB is. And three, at the risk of trying to push their clones, they can actually lose the whole customer. There remain situations where a cloud provider might push their own clone and the customer decides to run that workload run an Atlas workload on another cloud provider.
And so I would say Atlas — sorry Azure is essentially signing up to what AWS and GCP have already done, which is obviously provide incentives for customers to choose Atlas incentives for their sales force to work with us to go close more deals as well as do product integration. So, I think what this really speaks to and what customers really care about is the platform neutrality that we offer or said another way the optionality we offer for customers to essentially run their workloads anywhere, which is something that they consider very, very important in the space given the history of the space and how strategic the data platform is.
Kingsley Crane: Okay, great. Really well said. That’s it for me.
Dev Ittycheria: Thank you.
Operator: Thank you. Our next question comes from Mark Moerdler with Alliance Bernstein. You may proceed.
Firoz Valliji: Hi, this is Feroz Valliji from Bernstein. And thanks for taking my question. All right. So, given that the core product is a play infrastructure — is a core infrastructure product. And generally these kind of products are associated with long visibility in terms of spend and implementation, Is it realistically possible for customers to ramp down their buying that quickly? And then I have a follow-up.
Dev Ittycheria: Sure. So, one of the benefits of the cloud is you truly create a variable cost model, right? And so one of the benefits of Atlas is you can scale up or scale down your clusters and essentially your usage based on how your business and ultimately, how the application is doing. What we’re talking about is not the business going backwards, what we’re talking about is that we’re just seeing slower growth of these workloads. And so — and that’s really tied to the fact that our own end customers, their own business is slowing down so their need to upgrade those clusters as they — either those existing apps grow or as they add new apps is not as high as it was say as it was two years ago. And so that’s what’s really happening. There’s not a — I don’t want to imply that the customers are going backwards, it’s just that the rate of growth is slowing down.
Firoz Valliji: Got it. And one quick follow-up. You talk about consumption pattern being slower in Q4. Is it something that is a very broad-based trend, or is it — would you highlight any specifics in large enterprises versus let’s say digital natives or SMB customers? Thank you.
Dev Ittycheria: No. As you mentioned the holiday slowdown was more pronounced. We had very limited growth in those two months and it was broad-based across industries. And then we — similarly, the rebound that we saw in February was also broad-based.
Firoz Valliji: Thank you. That’s very helpful.
Operator: Thank you. Our next question comes from Mike Cikos with Needham. You may proceed.
Mike Cikos: Hey, guys. You have Mike Cikos here from Needham & Company and thanks for getting me on. I think, the first question that I had, and I know it’s a little bit more backwards looking, just given the difficult comps that we’re citing in the out year. But can you help us think through Enterprise Advanced? And really what I’d like to get at is, is there any way you guys can explain what drove this strength? Because it really did feel like it carried the mantle as far as the growth and outperformance that you guys were able to demonstrate throughout fiscal 2023. Is there any way to help us conceptualize what drove that from those customers? And then, I have a follow-up as well.
Michael Gordon: Yes. Thanks, Mike. I don’t know that I can add a ton more than what I said in response to Brent’s question. But in general, we run the business on a channel basis, right? And different customers are at different spots to their cloud adoption journey. And so, as customers think about — our goal is to make MongoDB easy for them to deploy regardless of where they are. And so, we want them to use MongoDB. Customers are increasingly looking at MongoDB Enterprise Advanced as an on-ramp to the public cloud. And, I mean, you have to remember, just to put it in the big picture, we’re going after an incredibly large market, right? The market is $84 billion per IDC in 2022, going to $138 billion in 2026 and we’ve got about 1.5% market share.
And so, there’s just a lot of opportunity, combined with the fact that, even though more and more workloads are moving to the cloud, it’s still a minority of workloads. And so, the opportunity set is just very large and very broad. And our goal is to make MongoDB easy for customers to use regardless of what — where they are and what they’re ready for.
Mike Cikos: Thanks for that, Michael. And then, I guess, as a follow-up, one of the things I’m trying to put together on my side and I’m guessing that my peers are doing the same. But given the guidance that we have for 1Q today and then the full year guide, can you help us think through what management thinks about, as far as the shape of consumption throughout fiscal 2024. Especially, since fiscal 2023 we had cited — I know Q2 was below the historical trend line, 3Q was closer to the historical trend line, but still below it. Is there any way you guys can give us some better construct for the remainder of the year post this Q1 guide that we have today?
Dev Ittycheria: Maybe, a few thoughts that will help. When we look at our guide for the full fiscal year, we now have a few quarters of data under our belt in the current macroeconomic environment. And there’s certainly been some sort of puts and takes. It’s broadly played out in line with how we thought and there’s certainly some seasonal accent points. But, in general, what we’re looking at in terms of our outlook for fiscal 2024 is, Atlas cohort growth and Atlas cohort expansion consistent with what we’ve seen since Q2, when the macro slow down sort of first started. Obviously, if the macro environment improves, we will benefit from that. And conversely, if the environment deteriorates, that will be an adverse development for us.
But that’s really how we look at it. We’ve talked about Q3 being seasonally strong. We talked about some of the dynamics in Q4. I think we’ve been clear about kind of Q1 and — but not only just in terms of what the sequential impact, but just as you’re thinking about it generically just having fewer days not to mention some of the other things were to walk through, as it relates to the Q1 setup. So, I think, there’s a fair amount of information, a fair amount of details there. And again, I would also just sort of revert back to the — we really do run the business on a channel basis, but try and give people a whole bunch of information just given the different dynamics and understanding where people focus and how you’re building your models and all those kinds of things.
Mike Cikos: Appreciate the context, Michael. Thank you very much.
Michael Gordon: Thank you.
