Two interesting articles came out recently about ESTC and AWS. Both are behind a paywall but I’ll link them here.
The gist of the first article is Amazon supposedly makes in the neighborhood of 100 million dollars off of its top 100 customers in 2018 of its hosted elastic search service. That is up from 45 million dollars in 2017. I’m sure that number is cherry picked for its fastest growing cohort but you guys can see why amazon decided it was worth creating open distro. As ESTC started to move more code into its proprietary code base amazon had to rescue this incredibly fast growing source of revenue.
Elastic search has responded by moving more features into its free tier but keeping the code from being open source. This makes it so amazon can’t strip mine and use the code to run their competing hosted service. Amazon/netflix/expedia are trying to develop their own plugins with similar functionality and bolt them on to the elastic search core. Netflix and Expedia obviously use enough elastic search where they think this is a cost effective approach for them. Amazon wants it so they can run a hosted elastic search instance.
One of the other points the article mentions is that the top 100 customers are generating about a 100 million dollars, then presumably if you take all the AWS elastic search customers then AWS could be generating close elastic search’s revenue of 270 million. That is a pure guess.
Finally, Shay Bannon, the CEO of elastic search has indicated a few things as follows.
- they are still seeing great adoption of Elastic search. “We also haven’t seen any impact on our distributions since the launch of Open Distro,” Banon said.
- They are focusing on releasing more proprietary features (maps, endpoint etc)
- (my comment) open distro feature set is a few releases behind ESTC’s
Anyway. Fascinating stuff. I don’t doubt that ESTC could be growing faster right now if AMZN wasn’t in their territory. AMZN could be helping the overall elastic search market grow and if the feature set diverges enough that could drive more people to ESTC. I’ll be interested to see the next few quarters but at the moment the “elastic search” market appears big enough for both.