Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Elastic files for an IPO

sec.gov

Post reply on HN
Print view View original

101–110 of 143 posts

Re: Elastic files for an IPO

#101

Post by smartbit »

busterarm wrote: post #73
mooreds wrote: post #53

Earlier quoted context omitted.

> You could build ES clusters on AWS directly on EC2 and it would be cheaper than Cloud, unless what you're really looking for is that support contract. Or you are willing to trade money for dev time. Setting up and running the ES cluster on EC2 will take time and energy (source, I did it ). Whereas setting up the ES cluster on either the Elastic Search hosted service or AWS ElasticSearch is really just clicking some…

I can largely agree with the last statement. The problem I find with the hosted services is that people just tend to throw data at it without really knowing anything about cluster/node/shard performance. This typically blows up in their face at some point and even though Elastic Cloud has nice sliders in place for spend-more-money, they still have to go through the rebalancing pains (if they didn't write-lock the clu…

> X-pack ... there are free alternatives for all of its good features

could you list a few?

Re: Elastic files for an IPO

#102

Post by barbecue_sauce »

AznHisoka wrote: post #78
burnmaster wrote: post #66

Earlier quoted context omitted.

I see several responses that mention MongoDB for purposes of comparison and seem to conclude Elasticsearch fares favorably. It should be noted: [1] Unlike MongoDB (which is a ground-up build), Elasticsearch is basically an API layer on top of Apache Lucene. This is relevant because they haven't built and don't maintain, control, or own the source of their primary IP. [2] Unlike MongoDB (General Purpose) Elasticsearch…

Elasticsearch is much more than a search engine. Lots of people use it for analytics (checkout their aggregation/time series queries) as well as analyzing huge logs. Some people are starting to use it for machine learning use cases too.

I have seen it used almost exclusively for logging as part of the Elastic (formerly ELK) stack.

Re: Elastic files for an IPO

#103

Post by mushi »

tschellenbach wrote: post #72
burnmaster wrote: post #66

Earlier quoted context omitted.

I see several responses that mention MongoDB for purposes of comparison and seem to conclude Elasticsearch fares favorably. It should be noted: [1] Unlike MongoDB (which is a ground-up build), Elasticsearch is basically an API layer on top of Apache Lucene. This is relevant because they haven't built and don't maintain, control, or own the source of their primary IP. [2] Unlike MongoDB (General Purpose) Elasticsearch…

Lucene is open source, Mongo is open source. It's the same approach. Elastic is used for search, log analysis and analytics.

Apache license vs AGPL is not the same approach.

MongoDB owns their code - Elastic does not own Lucene.

Re: Elastic files for an IPO

#104

Post by itronitron »

toomuchtodo wrote: post #85
itronitron wrote: post #82

Earlier quoted context omitted.

Can someone explain why a company would pay a cloud provider extra to manage an open source API for them when they could just run it in the cloud themselves?

Cheaper than spending the time doing it yourself until you’re paying people to do it for you. Time is the ultimate non-renewable resource. Throw dollars at the problem when you have them and it’s cheaper than your time.

I think a lot of companies have a hard time managing that transition as they scale up though.

Re: Elastic files for an IPO

#105

Post by silversmith »

beambot wrote: post #68
scarface74 wrote: post #61

Earlier quoted context omitted.

Losing $50M on $150M of revenue. (Net margins of -33%). This is pretty reasonable and in line with Twilio and Mulesoft. MongoDB was significantly worse at -60% net margins. Why is a -33% net margin “reasonable” instead of just being “less unreasonable”?

Worth looking at the 40% rule for SaaS: https://www.feld.com/archives/2015/02/rule-40-healthy-saas-c... The rule states that a "sane" target for annual growth rate + profit margin is 40%. At a 100% YoY growth rate and -33% profit margins, Elastic is sitting at 70% -- making it pretty solid!

You could say that.

You could also say that they are losing money today, and expecting to lose twice as much money next year.

Re: Elastic files for an IPO

#106

Post by parasubvert »

ummonk wrote: post #92
parasubvert wrote: post #55

Earlier quoted context omitted.

Elastic is not predominantly a SaaS company. It's part of the play, but not the main source of their revenue.

Subscription was the bulk of their revenue, over licensing and services...

Subscription includes on-premise installations; it’s just another licensing model. It is common to move away from perpetual license up-front followed by maintenance models to a more spread-out revenue model and better predictability for Wall Street (plus potentially better quarterly deal volitility insulation because of more deferred revenue, especially if they’re doing up-front multi-year subscriptions).

They also say that the majority of their revenue is from enterprises running their own instances.

Anyway, the point is mostly moot for an investor, but it is interesting as a technical person to observe that many SaaS plays aren’t entirely or even mostly *aaS, they’re open source software sold as enteprise software subscriptions (priced at enterprise or SaaS levels too, not a bargain basement OSS support contract)

Re: Elastic files for an IPO

#107

Post by parasubvert »

notimetorelax wrote: post #60
parasubvert wrote: post #55

Earlier quoted context omitted.

Elastic is not predominantly a SaaS company. It's part of the play, but not the main source of their revenue.

I think they are transitioning from license/support to SaaS. Also looking at their statement SaaS is taking over in revenue. License 25 Million, subscriptions 123 Million in FY 18.

Subscriptions do not imply SaaS, though Wall Street often equates the two. It’s just a different licensing model that’s replacig the up-front perpetual license + 25% annual maintenance that is the old school enterprise software model.

The majority of that subscription revenue (they make this clear in other statements in the S-1) is enterprise deals running Elasticsearch & Friends on enterprise datacentres or clouds where Elastic isn’t providing a managed service - they’re providing traditional enterprise software support.

This isn’t unique to Elastic. Splunk, Pivotal, Mongo, MuleSoft, all are similar. Wall Street mostly cares about the revenue model, but there’s a nuance to it.

Re: Elastic files for an IPO

#108

Post by ousta »

artellectual wrote: post #97

Elastic is a company I’ve been following from the start when they just had elasticsearch opensource project. Watching this company grow to this point has been inspirational. I really want to meet / talk to the people who made this company. They made open source work. I’m happy to use their products, filebeat, kibana, elasticsearch, and their cloud offering has been top notch. They got a lot of things right. Now elast…

i would be surprised if they were supporting sql as query language. do you mean by using spark sql?

Re: Elastic files for an IPO

#109

Post by greglindahl »

silversmith wrote: post #105
beambot wrote: post #68

Earlier quoted context omitted.

Worth looking at the 40% rule for SaaS: https://www.feld.com/archives/2015/02/rule-40-healthy-saas-c... The rule states that a "sane" target for annual growth rate + profit margin is 40%. At a 100% YoY growth rate and -33% profit margins, Elastic is sitting at 70% -- making it pretty solid!

You could say that. You could also say that they are losing money today, and expecting to lose twice as much money next year.

Right. It's the first group who's buying the stock in the IPO, not the second.
Post reply on HN