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Elastic files for an IPO

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Re: Elastic files for an IPO

#51

Post by busterarm »

FridgeSeal wrote: post #48
mooreds wrote: post #27

Earlier quoted context omitted.

I can't speak for others, but I was looking to set up a quick elastic search cluster and Elastic's hosted offering beat the pants off of AWS ElasticSearch in terms of usability, polish, ease of getting started and security-by-default. Now, I don't have a lot of data in the cluster, so we'll see how performance is when that happens, but would definitely recommend Elastic's offering.

We recently moved our stuff at work from AWS to Elastic Cloud and it’s excellent. Performance is miles and above better, there’s actual security options on the clusters and there’s way more features.

Huh?

Elastic Cloud runs in either AWS or GCP. You get to choose but it's just between those. Unless you mean you were using AWS's ElasticSearch service... which is known to not be all that great.

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.

I spent a few months of my life learning ES inside and out and would choose this option every time. One of the best tech investments I've ever made.

Re: Elastic files for an IPO

#52

Post by jimmy1 »

jedberg wrote: post #45
calcsam wrote: post #37

This is an extremely solid financial statement. $150M in revenue, growing ~100% per year; I'd project a valuation between $3B and $4B. Twilio, Mulesoft, and MongoDB are probably the best comparables here -- open-source and dev-tools based SaaS IPOs. All of these were very successful at IPO and afterwards, and even compared to these, Elastic looks great. * They're growing at almost 100% per year which is incredible. T…

Any time there is an IPO filing, I immediately come to the comments on HN, because there is always someone well versed in reading these things that can provide an excellent summary. Thank you!

Now we are just missing the comment like...

"It's really just a wrapper around Solr and a management layer bolted on top I don't understand all the rage!"

Re: Elastic files for an IPO

#53

Post by mooreds »

busterarm wrote: post #51
FridgeSeal wrote: post #48

Earlier quoted context omitted.

We recently moved our stuff at work from AWS to Elastic Cloud and it’s excellent. Performance is miles and above better, there’s actual security options on the clusters and there’s way more features.

Huh? Elastic Cloud runs in either AWS or GCP. You get to choose but it's just between those. Unless you mean you were using AWS's ElasticSearch service... which is known to not be all that great. 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. I spent a few months of my life learning ES inside and out and would choo…

> 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 buttons.

However, I'm sure the right solution also depends on the amount of data you are using and the problem you are trying to solve.

Re: Elastic files for an IPO

#55

Post by parasubvert »

ttul wrote: post #35
fh973 wrote: post #31

Earlier quoted context omitted.

Is this a data point for how well the open source business model works? Or are they just unnecessarily bloated?

No, this is a healthy high growth SaaS company.

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

Re: Elastic files for an IPO

#56

Post by SigmundA »

tootie wrote: post #46
calcsam wrote: post #37

This is an extremely solid financial statement. $150M in revenue, growing ~100% per year; I'd project a valuation between $3B and $4B. Twilio, Mulesoft, and MongoDB are probably the best comparables here -- open-source and dev-tools based SaaS IPOs. All of these were very successful at IPO and afterwards, and even compared to these, Elastic looks great. * They're growing at almost 100% per year which is incredible. T…

Elastic also has an excellent market position. They have far fewer credible competitors than Mongo.

Its really surprising there isn't more activity in this area. For instance Postgresql could really use some attention on its text search capabilities such as BM25 and TF*IDF and become a more capable competitor.

Re: Elastic files for an IPO

#57

Post by mathattack »

calcsam wrote: post #37

This is an extremely solid financial statement. $150M in revenue, growing ~100% per year; I'd project a valuation between $3B and $4B. Twilio, Mulesoft, and MongoDB are probably the best comparables here -- open-source and dev-tools based SaaS IPOs. All of these were very successful at IPO and afterwards, and even compared to these, Elastic looks great. * They're growing at almost 100% per year which is incredible. T…

15-20x is huge for a SaaS company this big. I’d be surprised if they get it. They’re a great company but that implies sustained insano growth.

Re: Elastic files for an IPO

#58

Post by mathattack »

whalesalad wrote: post #12

> We have incurred losses in all years since our incorporation. We incurred a net loss of $52.7 million in fiscal 2018, $52.0 million in fiscal 2017 and $18.6 million in the three months ended July 31, 2018. As a result, we had an accumulated deficit of $233.4 million as of July 31, 2018. Woah.

The formula for SaaS companies is generally growth + net margin should equal 40%. If they’re growing 100%, even a negative 50% margin leaves them in the clear by 10%.

Re: Elastic files for an IPO

#59

Post by jillesvangurp »

achompas wrote: post #36
hendzen wrote: post #13

Earlier quoted context omitted.

There are key differences between MongoDB and Elastic. MongoDB (the company), has been very strategic about defending themselves from Amazon. Likely due to the AGPL licensing on MongoDB (the database), Amazon doesn't offer a hosted MongoDB - you have to buy MongoDB Atlas which runs on multiple cloud providers, including AWS, GCP and Azure. Coincidentally, Atlas subscriptions are the fastest growing part of MongoDB In…

Another thing to note, along with sibling comments: AWS Elasticsearch is limited in its capabilities. For example, you are blocked from relying on custom ranking models to rank your documents.

There are a lot of limitations with Amazon's hosted offering. Mostly you will find out about them when your cluster needs maintenance (upgrades, outages, etc.). Elastic cloud is a much better product in terms of features, support, performance, documentation, price, etc. I've used both and ran my own clusters as well. Elastic Cloud is my default option these days.

Re: Elastic files for an IPO

#60

Post by notimetorelax »

parasubvert wrote: post #55
ttul wrote: post #35

Earlier quoted context omitted.

No, this is a healthy high growth SaaS company.

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.
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