A friend recently bought a GM car. I proceeded to inform him that I am shorting GM stock (technically a put option). He was shocked. “But they make great cars,” he exclaimed. I responded, “I’m not shorting the cars, I’m shorting the company.” Why am I recounting this exchange? Because I believe that the new wave of NoSQL companies—as opposed to the rebranded ODBMS—presents the same situation. I am long the products, but short the companies.
Let me explain. NoSQL companies have built some very cool products that solve real business problems. The challenge is that they are all open source products serving niche markets. They have customer funnels that are simply too small to sustain the companies given their low conversion/monetization rates.
These companies could certainly be tasty acquisition targets for companies that actually make money. But as standalone companies, sadly, I would short them. On that note, I am off to the NoSQL Now! Conference. Hopefully, this post won't get me beat-up while cruising the conference.
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Well put point - I whole heartedly agree on the funneling; it should be apparent to anyone with experience evaluating the NoSQL options, the funneling makes them more of a liability.
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