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Elastic files for an IPO

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Re: Elastic files for an IPO

#91
post #52
post #45

Earlier quoted context omitted.

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!"

It’s really just a wrapper around Lucene and a distributed database and REST API bolted on top.

…I completely understand all the rage?

Re: Elastic files for an IPO

#92
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.

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

Re: Elastic files for an IPO

#93

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.

It's not elastic's fault, but it is elastic's problem if they can't get paid.

Re: Elastic files for an IPO

#94
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…

Market likely will be assessing them on billings and then afterwards looking for FCF expansion, and finally tracking Non-GAAP op. margin. At ~80% Y/Y FY'18 billings growth investors probably focus on that metric.

Re: Elastic files for an IPO

#95
And it all started with Shay Banon attempting to build a cooking app for his wife who was a chef.

> JAXenter: You started Compass, your first Lucene­-based technology, in 2004. Do you remember how and why you became interested in Lucene in the first place?

> Shay Banon: Reminiscing on Compass birth always puts a smile on my face. Compass, and my involvement with Lucene, started by chance. At the time, I was a newlywed that just moved to London to support my wife with her dream of becoming a chef. I was unemployed, and desperately in need of a job, so I decided to play around with “new age” technologies in order to get my skills more up­to­date. Playing around with new technologies only works when you are actually trying to build something, so I decided to build an app that my wife could use to capture all the cooking knowledge she was gathering during her chef lessons.

> I picked many different technologies for this cooking app, but at the core of it, in my mind, was a single search box where the cooking knowledge experience would start a single box where typing a concept, a thought, or an ingredient would start the path towards exploring what was possible.

> This quickly led me to Lucene, which was the defacto search library available for Java at the time. I got immersed in it, and Compass was born out of the effort of trying to simplify using Lucene in your typical Java applications (conceptually, it simply started as a “Hibernate” (Java ORM library) for Lucene).

> I got completely hooked with the project, and was working on it more than the cooking app itself, up to a point where it was taking most of my time. I decided to open source it a few months afterwards, and it immediately took off. Compass basically allowed users to easily map their domain model (the code that maps app/business concepts in a typical program) to Lucene, easily index them, and then easily search them.

> That freedom caused people to start to use Compass, and Lucene, in situations that were wonderfully unexpected. Imagine already having the model of a Trade in your financial app, one could easily index that Trade using Compass into Lucene, and then search for it. The freedom of searching across any aspect of a Trade allowed users to convey this freedom to their users, which proved to be an extremely powerful concept.

> Effectively, this allowed me to be in the front seat of talking and working with actual users that were discovering, as was I, the amazing power that search can have when it comes to delivering business value to their users. Oh, and btw, my wife is still waiting for that cooking app. Now, 10 years later, it is the basis of Elasticsearch.

https://jaxenter.com/elasticsearch-founder-interview-112677....

Re: Elastic files for an IPO

#96
post #4
post #2

Interesting. My initial instinct is to compare them to MongoDB which IPO'd about a year ago. They seem to be doing quite well since, but then again, who hasn't in the tech sector? I will say I very much enjoy Elastic's suite of products, I can't say the same for MonogoDB.

To be fair, both MongoDB and Elasticsearch have had serious issues as pointed out via the Jepsen tests. https://aphyr.com/posts/317-jepsen-elasticsearch https://aphyr.com/posts/323-jepsen-elasticsearch-1-5-0 Though, all those issues have been fixed for both MongoDB and Elasticsearch so it's not necessarily fair to judge them based off past performance. https://www.elastic.co/guide/en/elasticsearch/resiliency/cur... h…

Those Jepsen are not that useful, I can point to you Postgres issues where it would corrupt the DB, does it means you shoudn't use Postgres?

Re: Elastic files for an IPO

#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 elasticsearch even supports SQL as a query language.

This is a company that you don’t hear often in the news, but they just kept their focus and shipped the goods.

As you can tell by now I’m a hardcore fan of Elastic.

Re: Elastic files for an IPO

#98
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.

An issue I had with AWS was that even after they launched VPC ES clusters, they still hid the node IPs in the API output(I guess they patched ES?!). Our use case as a data lake meant that we had severely degraded performance with the hadoop/spark drivers than one would expect form it.

Re: Elastic files for an IPO

#99
post #46

Earlier quoted context omitted.

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.

Except it's not HA nor doesn't scale out of the box, big difference.

Re: Elastic files for an IPO

#100

Earlier quoted context omitted.

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.

It’s a business decision of course. Forge your own path or be beholden to your revenue model dictated by AWS.

Big Enterprise will not require billing through AWS (disclaimer: employed at a large enterprise, buying ~$900k software license currently). They’ll have an accounts payable department, a procurement process, and someone to cut a check or ACH to Elastic monthly/annually.

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