Scott Mlyn | CNBC Dev Ittycheria, CEO, MongoDB
MongoDB shares plummeted as much as 11 percent on concern that ride-hailing service Lyft is shifting business to a rival cloud database service run by Amazon Web Services.
AWS said on Tuesday that Lyft is going "all-in" with its public cloud, a phrase Amazon typically uses when a company decides to pull over the vast majority of its technology infrastructure. Lyft has long relied on aspects of AWS, but is now expanding its use of Amazon services for serverless computing, containers for moving workloads and machine learning, the statement said.
The AWS announcement didn't mention anything about MongoDB, but Christopher Eberle, an analyst at Nomura Instinet, published a report on Tuesday, claiming that Lyft is "is quite dissatisfied with Mongo's performance and is in the process of a massive database migration."
Eberle, who has the equivalent of a sell rating on MongoDB's stock and a $63 price target, said he believes Lyft is a "marquee customer" of MongoDB.
A MongoDB spokesperson declined to comment. The company's annual report doesn't mention Lyft and says that no customer represents more than 10 percent of revenue.
The stock's selloff was its steepest since Jan. 10, when the shares dropped on news that Amazon was rolling out cloud-based database software called DocumentDB to directly compete with MongoDB. Dev Ittycheria, MongoDB's CEO, said at the time that "imitation is the sincerest form of flattery" and that "developers are savvy enough to distinguish between the real thing and a poor imitation."
Jordan Novet | CNBC Amazon Web Services CEO Andy Jassy speaks at the 2017 AWS re:Invent conference in Las Vegas.
In Amazon's statement on Tuesday, the company didn't say anything about Lyft moving to DocumentDB, but referenced other AWS services the company will be using. Eberle wrote that DocumentDB still lacks "competitive functionality," but he highlighted other reasons to be concerned about MongoDB. Eberle sees a broader migration away from MongoDB and expects "the new database world will remain highly fragmented."
In terms of where Lyft is headed with its database, Eberle said that "based on industry conversations," it could be AWS or Google.
A Lyft spokesperson didn't immediately respond to a request for comment.
In December Lyft said it confidentially filed to go public and, when the prospectus is made public, it could provide an update about how cloud computing factors into its cost of revenue.
The core Lyft service has relied on AWS since it first became available in San Francisco in 2012. The company's AWS usage has grown over the years as the core app gained popularity. Lyft has also looked to AWS for its autonomous driving technology, as well as sharing for bicycles and scooters. Lyft now provides more than 50 million rides each month, up from 14 million in 2016.