Cloud database provider Couchbase recently put up excellent growth numbers and delivered a better-than-expected outlook for the balance of the year. As companies across industries and the tech spectrum struggle with uncertain — if not reduced — demand, it begs the question of how Couchbase is continuing to drive growth today and into the future.
In a nutshell, the company continues to have success with its “land and expand” model, which is driving new revenue from its largest and most important customers. It’s also keeping its foot on the innovation accelerator pedal to ensure its products are differentiated for customers who are watching costs and turning to tech for efficiency more than ever.
As the company ramps its focus on the Capella database as a service, it’s enabling customers to move forward with shorter deal cycles and less internal effort.
“They can offload a lot of what they would normally have to do on a longer selling cycle because we are handling all the back-end administration and running the service,” CEO Matt Cain said during the company’s earnings call. “Just landing customers and allowing them to expand at their pace is something that we can do with Capella much more efficiently than we would have with our customer-managed Server version.”
Customers Show Confidence
Among major customer land-and-expand activity, the company has cited a Fortune 50 home improvement retailer and a fast-food restaurant with 50,000 locations. It’s fairly safe to assume those customers are Home Depot and McDonald’s (I’m drawing that conclusion; Couchbase didn’t provide their names).
The home improvement retailer is now using the Couchbase server for its main corporate order management system as well as product master data management. In home improvement retail, it would be challenging to find applications that are more strategic than order management and product data management, so that is one ringing endorsement.
Officials said this customer has significantly expanded its use of Couchbase in its cloud environment. “We’re excited about this major expansion, multi-year deal showing their continued interest and deepening usage,” said John Kreisa, chief marketing officer.
The second case is the unnamed “leader in fast food restaurants” with more than 50,000 locations. That company is expanding its use of Couchbase tenfold while leveraging the mobile, peer-to-peer point of sale system from Couchbase to deliver reliable, fast service to customers. “This is an excellent example of how our unique mobile capabilities are driving a multitude of connections with applications at the edge, all aligned toward driving a more compelling customer experience through digital transformation,” Cain said.
In total, the company is making significant headway in growing the size of deals and customer accounts. At quarter’s end, the company had 240 customers delivering more than $100K Annual Recurring Revenue (ARR) and 28 customers each delivering more than $1M ARR.
“Customers are seeing the value we deliver, understanding it, and continuing to invest further,” Kreisa said.
Eye on Product Innovation
Officials have also shared two planned product enhancements. The first is support for Microsoft Azure for its core database and application services by its fiscal year-end (January 31, 2023).
Couchbase currently supports AWS and Google Cloud. With the addition of Azure, it will cover those generally viewed as the “Big 3” hyperscalers.
Also, it’s revamping the Capella DBaaS UX for a more developer-friendly, developer-focused experience that tailors workflows to their expertise levels.
“We’re swapping some real estate in the control pane to be more developer-centric and making it easier to get up and running,” said Couchbase Senior Vice President of Product Management Scott Anderson. “We’ve done a lot of research with prospects to make sure we’re meeting their needs as we go forward.”
Delivering the business requirements of the largest customers and maintaining a strong focus on product innovation —that’s a solid model in the Acceleration Economy, even when that economy hits pockets of turbulence.
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