You’re confused on multiple levels. First, you’re mixing up ANSI with, I suppose, the FASB (or maybe the AICPA). Second, you’re mixing up revenue recognition with a report of customer count. Thirdly, while it is indeed the case that substantially all venture-backed companies are contractually required to have audited financial statements, what you said in that area is confused too.

And by the way, I was pretty involved in the setting of software industry accounting standards, back in the day.

However, you are probably right that, instead of “paying” customers, I should ask about “customers for whom license revenue has actually been recognized.”

Thanks for at least refraining from your usual comment spamming.

All software companies incorporated in the USA must conform to ANSI accounting standards for reporting revenue and must be audited by an accredited accounting firm. The rules that govern how revenue is recognized and hence who you can honestly call a customer are well defined. There must be a license in place for the products that you are selling, a defined fee, and it must not be constrained by language that allows the customer to return the products for any reason such as acceptance wording based on performance criteria or even preferential pricing on product that is not yet completed. Once the license is signed the company must demonstrate that they have physically delivered the software, if done through an FTP server the IP address must be provided.

Vertica’s customer count includes companies that acquired others who actually hold the license for the product (Bear Stearns = JP Morgan) Their count also includes many companies for which they cannot actually recognize the revenue because the customer has performance language in the contracts that allow them to back-out of the agreement if they want. They also list companies as customer who paid a fraction, sometimes as little as 2-3%, of their published price. Almost every start-up software company does this to generate buzz and interest in their company and Vertica is no different

Product has been deployed in many large deployments for analysis of various types of enterprise data. Here is a write up from EMC: http://www.emc.com/about/news/press/2009/20090601-01.htm along with a nice recognition (2008 EMC Partner Solution of the Year Award) for the many DW solutions deployed jointly: http://tinyurl.com/l6s6qm

Vertica has been a bit aggressive in its customer counts in the past, but now seems pretty good at only counting outfits with which it has executed a purchase agreement. That leaves a little wiggle room for conditional contracts or whatever, but only a little.

Curt, how do you define a customer?

Please find out more about the company and let us know.

Stonebraker was a SenSage tech advisor in the early days (e.g., see http://investing.businessweek.com/businessweek/research/stocks/private/person.asp?personId=178671), not sure what current relationship is. Apparently Stonebraker liked the columnar DB idea well enough to start Vertica.