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Elastic files for an IPO

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Re: Elastic files for an IPO

#81

Post by bratao »

linkmotif wrote: post #76
bratao wrote: post #75

For anyone that for any reason is looking for an alternative to ElasticSearch/Solr: Try Vespa.ai The feature of live node removing/adding alone made my life so much easier. The performance and Machine Learning ranking is the icing on the cake!

You mean there’s no refresh delay?

Oh yes! "Vespa is designed to be real time so once you your document has been accepted it is live in search. You can control visibility-delay which by default is 0: http://docs.vespa.ai/documentation/reference/services-conten... "

Re: Elastic files for an IPO

#82

Post by itronitron »

toomuchtodo wrote: post #32
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…

> Elastic (Apache licensed) has actually had their lunch eaten by Amazon to a much larger degree. Many businesses are purchasing hosted ES instances directly from Amazon via Amazon Elasticsearch service. The problem is bad enough that Elastic Inc had to write a marketing blog post about it [0]. Also the reason Redis Labs made the controversial decision to change their licensing (and they reference Elastic in it) [1].…

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?

Re: Elastic files for an IPO

#84

Post by dang »

chadash wrote: post #7

Just to be clear, $100M is what they are looking to raise , not their valuation. Their last valuation was about $700M in 2014, so presumably, they are looking for a valuation that exceeds that, most likely in the low billions.

Thank you. That's confusing enough that I think we'll take $100M out of the title above.

Re: Elastic files for an IPO

#85

Post by toomuchtodo »

itronitron wrote: post #82
toomuchtodo wrote: post #32

Earlier quoted context omitted.

> Elastic (Apache licensed) has actually had their lunch eaten by Amazon to a much larger degree. Many businesses are purchasing hosted ES instances directly from Amazon via Amazon Elasticsearch service. The problem is bad enough that Elastic Inc had to write a marketing blog post about it [0]. Also the reason Redis Labs made the controversial decision to change their licensing (and they reference Elastic in it) [1].…

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.

Re: Elastic files for an IPO

#86

Post by busterarm »

toomuchtodo wrote: post #77
busterarm wrote: post #74

Earlier quoted context omitted.

A big part of it is Elastic's fuckup. It's a big deal for a lot of companies to be able to pay the cloud bill in one place. Elastic used to provide the availability to pay for the Elastic cloud subscription through AWS' Marketplace. Elastic stopped this when they changed their pricing at the beginning of 2017 and we (my last employer) were negotiating a contract with them at the time. AWS billing was a hard requireme…

It’s not Elastic’s fault your accounts payable process is deficient.

I'd be surprised if even 20% of companies' accounts payable process is sufficient.

The point is that AWS removes friction and Elastic chose to add friction. They're chasing big Enterprise hard and it doesn't seem to be working out.

Re: Elastic files for an IPO

#87

Post by ummonk »

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!

Honestly, SaaS is a relatively easy sector to value, since valuation tends to be a pretty straightforward multiple of ARR (with the exact multiple tending to be based on growth rate and (un)profitability). Throw in comparables of other IPOs with similar product types, and you can pretty reliably estimate how much a company will IPO at.

Re: Elastic files for an IPO

#88

Post by linkmotif »

bratao wrote: post #81
linkmotif wrote: post #76

Earlier quoted context omitted.

You mean there’s no refresh delay?

Oh yes! "Vespa is designed to be real time so once you your document has been accepted it is live in search. You can control visibility-delay which by default is 0: http://docs.vespa.ai/documentation/reference/services-conten... "

Yes very interesting thanks for sharing. Have you used in production? Have you used the change steam functionality?

Re: Elastic files for an IPO

#89

Post by beambot »

bogomipz wrote: post #64
mathattack wrote: post #58

Earlier quoted context omitted.

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%.

>"The formula for SaaS companies is generally growth + net margin should equal 40%." Can you say exactly what formula this is and what is a formula for? Also what is the significance of the number 40 as a target?

40% rule for SaaS: https://www.feld.com/archives/2015/02/rule-40-healthy-saas-c...

Re: Elastic files for an IPO

#90

Post by ummonk »

ncmncm wrote: post #67
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?

If you aren't incurring losses, it means you are throwing away potential income by growing too slowly, and inviting competitors to take up the slack. In case of a market or tech hiccup, you might find yourself without "sufficient cash flow", and collapse, but that would be the investors' problem. The investors are assumed to be able to absorb the loss and disappointment without undue discomfort, and so they are. Risk…

Well in their case if they had to they could axe most of their sales and marketing spending, and become cash flow neutral and survive a hiccup.
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