Thoughts on Elastic

Looking there, one could as easily have picked Twilio as Alteryx, Zscaler or MongoDB as easily as Okta… And Elastic is there still, though not much longer… I am not questioning the point you were making, but it did look a bit like cherry picking

Hi RhinCT,
You are actually illustrating my point. I was saying that it is important to recognize and accept your mistakes and move on to better places for your money, not just hold on and hope. I got out of Twilio for reasons I’ve described at length, I got out of Mongo for reasons I’ve described, I got out of Elastic a couple of times after being briefly talked back into small positions, and I reduced Zscaler from a 12.8% position to its current size of 3.9% because of problems that we all are familiar with. I didn’t just hold on and hope that it would all work out. I put my money in companies I liked better (and which are doing much better).

I was kind to Elastic in my initial example. I picked Jan 2 when they were at $66. If I had gone back exactly “one year” instead, to this time last year, Elastic was at $87 or something like that, and they’d be showing a 23% LOSS now while these other stocks are way up. I think Elastic has structural problems, business strategy problems, pricing problems, quality problems, and net loss problems, that these other companies don’t have, and that Crowdstrike, Zoom, and Datadog don’t have either.

But look, I could be wrong and Elastic could prove me wrong, but I’d rather have my money in clearly successful businesses, and NOT in a business that is losing money at a rate of over a dollar a share, even adjusted, and even after doubling their number of shares. Just my way of looking at it.

Best,

Saul

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Read the post two posts back about why the writer’s company chose Zoom over WebX. It just worked better and more smoothly. That’s why major companies are choosing Datadog over Elastic: It just works better.
Saul

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thanks for triggering this discussion Saul, very valuable lessons.

Seems like some people (and I admit initially I had the same reaction) think that Saul is showing relative past performance as argument on why ESTC is not a good investment… however, that is missing the point.

Saul’s last two posts and Tinker’s commentary really emphasizes the point very clearly… let me try to summarize for my own’s sake…

Point here is not about momentum or stock price movement… not really about comparing ESTC stock price performance with AYX or CRWD performance just for the heck of it…

Point really is that ESTC arguably has inferior business model (not necessarily the CEO or company or product; just the business model)… they have an open source product and on top of that they are building (acquiring) multiple commercial products but they dont seem to deliver dominating product on any single domain. Most successful long term winners in the past have done it the other way… they build a very strong and dominating business in one area and then they expand in an adjacent area… ESTC seems to be trying to expand in multiple direction before they can actually become stronger in one meaningful domain…

They seem to be trying to become all things built on Elastic Search technology… that’s a product portfolio strategy but not customer facing value proposition … customers care about solving their problems not how the products are built…

All of these are resulting into much inferior S&M expenses and losses, while admittedly top line growth remains very strong…

This reminds me (ominously) of discussions we had on this board about another (at that time) beloved company called Nutanix… the slight difference there is Nutanix was actually already strong incumbent in one domain, but they too went down the path of expanding with too many products at the same time…

It seems to me that ESTC is in inferior overall situation that NTNX was at that time… (I remember I was in the awe of NTNX portfolio expansion and sure the revenue growth will sustain when the “sales execution” shoe fell)…

I hold a small position in ESTC but seriously re-thinking based on this discussion.

nilvest

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There is surely value in looking at price momentum, RSI etc. but look Amazon, Apple etc. should have gone through periods of low RSI. So, not sure one can depend just on that.

However, the business model is a real issue. As far as I can tell when compared to DDOG ESTC appeals to the more DIY customer who is more cost conscious. Key long term question for ESTC success: is there enough business in the DIY customers for ESTC to continue growing at high levels? If not ESTChas to pivot their business model quick enough?

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Hey there

I just wanted to add from a tech POV (I run engineering teams across different industries but particularly the FinTech space)neither I nor my teams ever really consider Elastic products. We only ever use it as a defect centralised logging stack as part of ELK (Elastic, Logstash, Kibana with FluentD) or as one of two possible search engines (the others being the core Lucene engine and the Solr open source product that uses it).

I have not yet seen Elastic present any of its products at tech conference via talks (InfoQ, Strange Loop, Devoxx etc) and have never head an engineer bring up an Elastic product. Usually at the companies I work in, it’s ELK or Splunk.

Using Elastic as a custom search engine requires specific skills almost akin to the high level skillset required for Data Science (in fact, there is generally some Data Science in there) so it won’t be widely adopted and certainly isn’t easily adopted to get accurate results. One only has to search for “red jumper” on Amazon (which uses their own A9 search engine) to see how hard it is too get good search results for such a simple term: https://www.amazon.com/s?k=red+jumper&ref=nb_sb_noss_2

Best,

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is there enough business in the DIY customers for ESTC to continue growing at high levels? If not ESTChas to pivot their business model quick enough?

History is unanimous. It is democratization of technology. When I was in high school I taught myself machine language and assembler. The school taught BASIC, but computers were too slow to make great things out of BASIC. How many people in the world knew how to program in hexadecimal? Even Excel back then required hexadecimal codes to print and do some other things.

I miss that romantic era. Nowadays, however, there are millions of JAVA programmers and the like, and every Tom, Dick, Mohammad, and Elizabeth, is capable of sophisticated computer use with a simple iPhone or Chromebook.

The same everywhere. Technology creates solutions. Technology that is a piece of software to be used by the select few only exists when the technology is not mature enough yet, or in special cases. It never becomes mainstream (unless its free of course - as most Elastic uses are).

Yeah, ESTC needs solutions that are complete products. Datadog, last Q grew 88% (and of course this will come down - but still incredible growth), with growing emphasis of big corporations (who you think would be best able to do their own), and on a GAAP and non-GAAP basis they were basically break even while growing this fast and playing the land and expand game.

It makes a lot of sense if you think about it. ESTC, on the other hand, is growing nicely, but with far far worse financial leverage. Why? Simple, the products ESTC are offering have less value to their users than the product DDOG is selling. Therefore customers are willing to pay more to Datadog for what they get because DDOG is providing greater value.

It appears that it is not and OR issue. There are customers who want to do it themselves. There are customers who want plug and play. And many of these customers want both. But, these same customers pay far more per unit of product to Datadog than to Elastic. And yet, Elastic has much higher cost structure that they meet with a lower value product per unit of product.

So yes, Elastic needs to increase the value of its product. Elastic is doing this of course. Their plan is to under bid everyone on price, and over time improve their product so it is good enough that customers will instead opt to use Elastic because it is cheaper and works well enough.

What horse would you rather be on? Of course valuation means something. All things are not equal. But again, if Elastic stopped all their other businesses, made Elastic proprietary, became a shell, and bought Datadog, Elastic would one materially more valuable than it is today, doing what it is doing today.

Anyways, analytically, it makes sense why Datadog is financially superior business model to Elastic. Elastic is actually destroying value by maintaining open source. Whereas, Mongo has better achieved this balance of open source, while Mongo itself has become basically proprietary without possibility of a Datadog coming along to provide a higher value product.

Anyways, I don’t know how the stock will do. It has done very poorly, even post stock crash. But I think it is fair to say that Elastic has destroyed more value than it has created for itself since the IPO. Yes, destroyed value!

Okay, is that a strong enough statement? Sorry, but its true. Perhaps Elastic’s long-term plan will hit. All it takes is ONE product, one. I do not believe the open source, cheaper pricing model, will do much better creating value for shareholders. Elastic has to find that product.

SIEM appears to be where they are placing their most effort. Become the better Splunk perhaps. Lets see what they do with this. But I don’t want to invest in “hope” or hypothesis. It is about systematically investing. It is not about hitting every winning trade. So I miss it. Elastic does not systematically give the signs that my money should be stuck in it. Meanwhile, its been better invested despite how “cheap” Elastic is. By the end of the year perhaps Elastic will make its move. Let it. If it meets my methodology, then I’ll invest. The share price and valuation is simply more information. When real FUD is involved, we know what to do. But when people try to substitute “misunderstanding of fundamentals” as investable FUD…

Tinker

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Saul:
“What if Elastic continues to almost flat-line over the next year and rises just 5%. You will have gained 6% in two years, while an investment in Alteryx will have gained 221%. Now that’s a significant opportunity loss.”

You can say that on hindsight but back a year ago that was not the idea. Elastic has been growing and it was great. Now fast forwar a year, their bottom line has not improved. That observation has caused some to sell ESTC. But that does not mean the ones who are still holding on are ‘wrong’. They may have been wrong over the course of the last 4 quarters but how can you be so sure that they will still be wrong over the course of the next 5 years?

It is not only about blind hope after seeing little improvements over the past quarters. It’s more about a different scope. Maybe we should ask the ones who have kept on holding ESTC, what is it do they see over the longer run to make them stay in.

tj

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The number of ESTC shares doubling in the last 12 m is due to the IPO process. Happens to all companies. Does not mean company issued new stock

Hi TexMex,

The IPO was in 2018, not 2019.

Besides, the point I was making was that the net loss doubled year over year. What the cause of the number of shares doubling was is irrelevant as far as the loss doubling.

The following may have something to do with at least some of the new shares: Elastic will acquire Endgame for a total purchase price of $234 million, subject to customary adjustments. The purchase price will be paid through the issuance of Elastic stock, the assumption of outstanding equity awards and the repayment of outstanding indebtedness, which currently amounts to $14 million.

Saul

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Why I hold Elastic? Apart from also holding the other stocks mentioned here (except COUP)…

My belief is that it will outperform (otherwise why hold it?). That statement is a little more nuanced than it may appear. I believe that there is a significant probability that it will outperform (which means theres a probability that it won’t).

Breaking down the underlying belief, the first is that the “digital transformation” tsunami is in the early stages. Reading almost all of the conference call transcripts for companies here suggests this is true.

Then, I believe that ESTC (probably) has a significant niche in the markets that it’s in. Will the entire APM world go DDOG? No. Can ESTC have some of that growing market, without ever competing with DDOG/NEWR/SPLK et al? I think so. Similarly with it’s other market niches.

ESTC are spending a ton of money which is the big question mark. DDOG is a much tighter, more efficient ship than ESTC in this regard. But DDOG you need to send all your APM data to their cloud. Maybe you don’t want to do that. Maybe you have your own datacenters. Maybe DDOG is too expensive for big deployments (seems the most common complaint around).

ESTC generate more revenue than DDOG, and have slightly more customers at this point so theoretically theres more general demand. DDOG has more >$100k ARR which suggests they’re more valuable for their customers.

So I want a piece of the APM puzzle, because of the “digital transformation” rising tide, and I think that ESTC has a good chance of getting a piece of that market, and potentially the other markets it has entered. I haven’t seen much “bad” news for ESTC, but will sell without hesitation if and when I see it.

cheers
Greg

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“You can say that on hindsight but back a year ago that was not the idea. Elastic has been growing and it was great. Now fast forwar a year, their bottom line has not improved. That observation has caused some to sell ESTC. But that does not mean the ones who are still holding on are ‘wrong’. They may have been wrong over the course of the last 4 quarters but how can you be so sure that they will still be wrong over the course of the next 5 years?”

I was thinking the same thing as an Elastic long, but then it dawned on me that Saul’s point is that it HAS been dead money and we could have been in something (many things) that DID do better, AND that his (or our) positions are not static. In other words, if things really do improve, and as Saul and Tinker like to say, “the numbers show it,” he (or we) CAN get back in then.

Once again I’m reminded to be nimble. I’m re-thinking my long position now.

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Saul,
I answered your question in the first post in this thread with a link to IR.

Elastic non GAAP operating loss did not double.For the first 6 months of 2019 it was $42.7M when compared to $26.5 for the year ago period which was about 60% higher same rate as the rev growth and hence the same OM.

For the same period its GAAP operating loss doubled going to $94.5M from $45.5. If you back out the 1 time endgame acquisition related expense it grew around 70%.

I get the point of Elastic bears. But I wonder how they reconcile ESTC’s 5 consecutive Qs of 60%+ rev growth at consistent (if not improving) margins? ESTC has TTM rev of $342M. You can’t get that just by giving away free stuff. If you remove DDOG, CRWD, and ZM, ESTC has been the fastest growing company among our stocks in the last 12 m. Its rev. growth has not been due to acquisitions like in the case of TWLO, or MDB nor has it dropped off sharply like TTD, and ZS. It is these aspects that keeps in ESTC.

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Especially grateful to SAUL…and to others in his Wonderful Room. Some very good stocks. Own no Elastic. Other thoughts:

Bought a lot of DDOG, for me, right after it’s IPO. DDOG is doing fine.
AYX is my newest of Saul’s recommendations…WOW! Went up as soon as I purchased it, earlier this month!!!

ALso own some CRWD and have had OKTA,a long time. Even my old SQ is doing better. Bought as soon as it went on the market. Had used the Company.

THANKS MUCH SAUL, STJ

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I like and own small positions in both elastic and datadog. Elastic seems focused on large enterprise companies. So, If they can retain these clients and cater to their ever growing data needs which will really escalate once IoT and 5g rolls out, I think they’ll do well.

Maybe down the road, they’ll offer a more turn key solution (like datadog) for smaller companies who don’t have IT departments. But it seems like they’re focusing on keeping their existing clientele happy and vertically integrating a plethora of new modules, so they can become a one stop shop for them.

However, CRWD is also currently trading below its IPO opening price. ZM is barely above its IPO opening price.

Looking at that metric, ZS stands out compared to the other two:

ZS IPO was at $16 on 3/2018. It is now at $56, up 250%.
CRWD IPO was at $34 on 6/2019. It is now at $57, up 67%.
ESTC IPO was at $36 on 10/2018. It is now at $66, up 83%
Note that all closed much higher (~100%) on their first day of trading.

Personally, with Elastic being open source, I felt there were better companies to invest in.

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Geez guys,

From some of the comments you’d think Elastic was a failed product and company.

Hardly.

I get lack of profitability is a weight but it’s hardly a reason we’ve ever tossed a company into the garbage heap, especially one with such a powerful and diverse core product. Expenses have grown at pace with revenue. And as an investor I feel like I’ve gained a lot with those expenses. They’ve positioned the company for long term growth and built out an impressive portfolio. I believe they and we will benefit from that.

They are performing near the top of our companies. Consistent 60% growth. Double check. Awesome guidance. Yup. Great gross margins. Indeed. Cash flow approaching positive. Yes, -$1.4M. Adding 900-1000 customers per quarter. Near the best we got. Good, granted not the best, growth of >$100K customers. It’s about 60% for that metric. SaaS from a small base >100% growth. While sustaining high growth in core on prem (close to 50%)

We spend a lot of time comparing to DDOG. Ok, that’s an area where Elastic is introducing products and is growing rapidly. From a small base. Elastic has a very very small footprint in the APM, SEIM, and Monitoring Space. They are historically dominant in Search Data Store and Log Analytics. That’s where the overwhelmingly majority of revenue comes from. But their search data store set of software is extremely proficient at doing those other capabilities, ask Dog and the others built on it. So customers of Elastic were using it for those cases and Elastic built a more service like experience for those products. They will compete healthily in those markets because their product is so good and easy. But, no, they will not dominate most of them. But there are NOT DataDog or New Relic. They are something much more. A successful company absent those markets and dominating completely different fields. Elastic doesn’t break it down but I would be surprised if products that overlap with DataDog (besides logging which is an equally small and new product for Dog) made up 10% or even 5% of Elastic revenues.

Elastic and DataDog are different companies! But Elastic is introducing new capabilities that are competitive to some of DataDogs products and will have much new revenue from those markets.

Elatic is growing at 60% with fairly stable spending. Hardly a failing business.

And we can stop with Nutanix comparisons. they wiped out products from their revenue lines while simultaneously transitioning the business model. Resulting in rapidly decelerating revenue growth that even went negative. Their software sales depended on hardware cycles to boot. Not Elastic in the slightest.

Darth

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You would never have been able to get ZS at $16 or CRWD at $34. They opened well above those prices on the first day of trading. I really don’t think it’s relevant how much they are trading above their IPO price because all that money went to clients of the underwriters, not public investors. The IPO price was nothing more than the “norm” for what insiders could have expected at the time, based on historic pricing methods. Insiders literally left a lot of money on the table by not adjusting higher for increased interest around SaaS. There are also a lot of companies who would like to see stock trade higher on first day to “see a successful IPO.”

The vast majority of the shares traded since the ZM and CRWD IPO traded above current prices. These trades transpired during the peak interest in SaaS companies, early-mid 2019. Since then, ZS fundamentals have stumbled, and the market sentiment turned to favor more profitable companies, so CRWD is not performing as well as ZM. But both CRWD and ZM had significant declines in price as their lockup expiration neared.

ZS traded as low as $24 as a public company, so it is the only one of the stocks not marginally off it’s lows.

ESTC opened at $70. ESTC is actually below it’s IPO opening price and marginally above it’s all time lows. ESTC also declined as it neared lockup expiration, then shot higher after that time passed, to new highs, only to reverse lower again.

So of all the companies you list, ZS is the only one that really did well for early investors. ZScaler opened at 15x trailing sales. ZM and CRWD, around 40x sales.

CRWD was valued at $3 billion in the private market in the year prior to it’s IPO where it quickly reached $21 billion in valuation.

Elastic began trading at $70 a share, 31x trailing revenues of $160 million, which were up 81% over the prior year.

All this means to me is that we went from companies opening at 10-12x TTM sales to 30-40x TTM sales. Much growth has been baked in to the price. I passed on ZM, I passed on CRWD due to these seemingly too high prices. I picked up CRWD at $47 although I have yet to buy ZM (this may very well be the lowest you can get it though, I just haven’t picked it up yet). I plan on doing the same for DDOG.

There have been a handful of companies that had followed a similar trend. Open at a very high price, then trade much higher on their first quarterly announcement, then finally drift lower as lockup expiration nears due to the relatively small number of shares available at the time of IPO driving the stock price higher. If DDOG does not follow this trend but just marches higher, I have plenty of other stocks I can own anyways.

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Lets say it, valuation does matter, it does. It matters if it is cheap (run run run away), and it matters if it has 10 years of growth built into it (history is not your friend).

Of the stocks you cite ZS and Twilio and SHOP (a bit after the IPO) are the ones that I invested in. I invested in Twilio at its IPO and more than doubled into the $60s. Sold it, and it dropped to the $20s. Never getting cheap, but providing another opportunity for those who chose to find it.

ZS, I waited for the “historic” crash of 2018 and jumped hard. SHOP, so many crashes along the way.

I have not invested in Zoom or Crowd or the like. They have fundamentals just as great as ZS did (now, who knows which way it will go) and Shop etc (although I soured on management when I sold I’m the mid-$60s so I did not buy back into Twilio at any time - hey sur rah sur rah). Saul has had problems with Twilio management for about the last year if my memory served me.

Point being the point of valuation is market cap to opportunity combined with growth rates and CAP. Emphasis on CAP and market cap to opportunity. Look at VEEV as an example or PAYC as a very large CAP with lower growth rate can create extremely high multiples on a sustainable basis.

Is it a coincidence that I had the winners? Perhaps, but to me there are common denominators (and some of this is more art than pure math) they each hit market caps far too small for what they were (even though they still extremely “overvalued” at the time) using the above factors.

Almost every company of this ilk (that has been my focus since the latest crash 6 months ago) gives opportunities. Alteryx has given many. So my point being is you don’t need to chase, but you need to understand competitive advantage and how it relates to relative valuation.

Elastic has been the topic of this thread in regard. Relative valuation Elastic appears to be at a large discount. The problem is figuring out what Elastic actually will dominate in. Yes, market domination matters. If Elastic can start showing its gaining material marketshare in SIEM then the share price will move.

Otherwise Datadog will free ride on Elastic (who puts in lots of effort and money into maintaining their open source offering) and make a far better living doing this, using the software for free, than Elastic will make from owning the software…

I’m sorry. I see Elastic creating a lot of value for the market, but not for itself. My “insight” (such as it is) is that Elastic has to stop having indeterminate growth and demonstrate enough leverage in some large market that it can create earnings leverage. Thus, although I looked at it many times, I never bought Elastic for more than a few days at a time. It just never felt right. And the market has agreed on this for more than a year.

So this is not an Elastic sucks, or an Elastic is an opportunity post, but rather what Elastic needs to do to make it a great investment from here, and that is not maintaining open source as its primary business function. Instead it is building a COMPLETE product (click and go sort of thing like Datadog or Crowd or the like) that becomes so in-demand to customers that Elastic can show us how it is a market dynamo.

This certainly can happen. This is not presently happening. I do not have the patience to wait for this to perhaps happen someday when there are other options (as Saul spoke about so elegantly).

Bit of babble, but hope it makes sense, at least from my perspective.

Tinker

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What an extraordinary thread. Almost every post remains pretty much on topic which is an odd accomplishment for a thread of this length. So after reading all these posts I wondered if I had anything to add. I think I do.

Let’s start with the product(s). Elastic’s core product is their search capability (and the attendant pieces that make the search usable). This product would be called “middleware”, at least that’s what we called where I worked. Middleware doesn’t do anything by itself. A classic example is a DBMS. You can host all the database managers you want, none of them will to anything to solve a business problem until it get’s lashed up to an application and increasingly, analytical tools. I’ve never fully understood what ESTC gives away as open source and what they sell, but my impression is that the bulk of the middleware products are free for anyone to use and incorporate in their own products.

Now, Elastic (the company) is in the process of developing apps built on their core technology. OK, great, but I get the impression that they have too many good ideas all vying for attention. Let’s understand the audience for monitoring software and security software are two different organizations that really don’t have a lot to do with each other (true in large companies, maybe less so in smaller companies). Regardless, the Elastic sales team is supposed to do what exactly? How are they going to structure sales campaigns when the product offerings are a dog’s breakfast? Honestly, I don’t get it. This does nothing but dilute the S&M efforts. And BTW, it also dilutes the R&D efforts. IMHO this is just bad business. They can come up with a bunch of mediocre applications that do a middling job of addressing problems in the face of much better and more focused offerings from other companies. At the same time, they are fostering what is most likely an unhealthy competitive internal environment for their engineering teams all vying for resources.

Let’s move on. How do companies buy software? Again, I can best relate my own experience in a Fortune 50 enterprise. Applications are supposed to solve problems. A problem can be measured. It is measured in dollars the come from wasted effort or delays in production or what have you. When the company I worked at bought (or built) software the process was always the same. We created pro forma charts that depicted a 5-year ROI and another that showed the payback period (sometimes called the “hockey stick”). So let’s stop talking about acquisition price as a determining factor. The thing that makes a difference is the ROI (which had to come in at 20% or better for a product/project to be considered). The ROI addresses the cost of ownership. I can only assume that all the folks that have alluded to a DYI approach don’t understand this. DYI is not inherently cheaper just because you can acquire some components for free. Resources have to be spent in order to create the application. And in the time that it takes to design, develop, test and train end users you might have already had a solution in place by just buying a fully functional, easy to use application that requires no R&D resources.

As for having Elastic (the core product) just sitting there waiting for some hackers to make something useful - I can’t imagine how that would ever take place. Maybe in a small shop where everyone from the CEO on down to the guy empties the waste baskets is a hacker and they do this stuff in their spare time it could happen, but not in a company where you have your IT folks dedicated to specific projects with schedules that have to be met and budgets that constrain resources.

I was in and out of ESTC a few times, but made my “permanent” exit around the same time Saul did for more or less the same reasons. I think I was driven more by what I saw as a confusing technology picture while Saul, as usual, was driven more by the fundamentals, but all those factors played a role.

I put permanent in quotes because I try to keep an open mind. It’s possible that things could change at Elastic (I think it will take a new CEO for that to happen). I don’t care if I miss the turning point. I don’t think I’ve been in “on the ground floor” of a single investment yet, but I’ve done pretty well over the last few years that I’ve taken investing seriously. I’m pretty happy with being in positions that are mostly rising while keeping my eyes open for new opportunities. ESTC could become a new opportunity (again), but I don’t think they are one now, so my money is elsewhere.

In summary, my main points are ESTC does not seem to know what they want to be as a company and therefore they don’t know who their customers are. Middleware is always sold to IT, but they don’t buy it (or even acquire it for free) just to have it. Acquisitions are purposeful. If IT has no designated project (with an ROI and a reasonable payback) for a product, they aren’t going to on-board it. Every piece of software increases complexity of the environment. Complexity is the enemy of efficiency.

When it comes to applications, they are sold to specific functional organizations, they are no just sold to the business. Some group must be in need of solving a problem, they are going to acquire the best solution based on some numerical analysis and some intangibles (scope of the solution, ease of use, etc).

And finally, most always acquisition cost is just a factor, it’s not a determinant. Cost of ownership will be weighed against perceived return on investment.

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Some excellent thoughts Brittlerock.

Two or three quarters ago, at earnings, the CEO was asked about the sales strategy given the new product rollouts. He said no changes. Salesforce is trained for general sales and the customers will do the creating of neat stuff basically.

The strategy is that once Elastic is doing something in the enterprise, it becomes that much easier to just add the other functionality given their pricing strategy.

This sales strategy describes exactly the problem of non-specificity that you describe.

It is as if Elastic is not willing to take a risk and focus on too narrow of a product category.

Seems a better strategy to me to focus on one or two categories and then after land expand w new product offerings. Instead they want the customer to decide what Elastic might do for them and see where they take it.

But good news for Elastic, one of their products may take off. I just don’t invest in hypothesis. No need to when actual real world data exists.

Tinker

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I’ve been enjoying Saul’s board for over a year now and have only posted a few times because I almost always get a nasty email after I post. That’s fine, there are many here who contribute amazing amounts of great information so if someone wants to tell me that I shouldn’t be posting I’ll accept that.

With that said…

Why oh why are the top minds here spending so much time discussing Elastic? Aren’t there better places to hash out the virtues and potential of that dead horse? I don’t recall the exact date that Saul sold Elastic but since then I’ve seen thread after thread after thread of lengthy discussion about it. This board is literally cluttered with new discussions about Elastic! It seems like the Elastic fans are repeatedly encouraging Saul, Tinker, 12x and others to justify their reasons for not investing in Elastic. There’s been way too much time and digital ink spent on this subject; it is time to move on!!!

IMHO, once Saul sells a position, and gives his reasons for doing so, the rest of this community should respect his decision and take deeper discussions of that company elsewhere. If anyone ever develops a really convincing reason why Saul should reconsider one of his prior investments than perhaps they could post “one message” here referring Saul and the entire community to the appropriate discussion.

Everyone here keeps saying how great the Motley Fool is and how we should support them. The Motley Fool has a board dedicated to Elastic. It was established on July 2nd, 2019 and currently has a total of 20 posts. That’s half as many as this thread. If folks want to discuss Elastic and to support the Motley Fool then perhaps they should take the Elastic conversation there and let the whole Motley Fool community enjoy your contribution:
https://discussion.fool.com/4056/-elastic-nv-estc-122585.aspx

If for some reason the Motley Fool premium boards aren’t available, Saul has already provided a number of places where one can discuss off topic investments:
https://discussion.fool.com/i-thought-it-might-be-useful-to-prov…

I believe one of the favorites off topic boards is the NPI board.
https://discussion.fool.com/new-paradigm-investing-114933.aspx?m…

Regardless, of where folks decide to discuss Elastic, it seems like the discussion should be taken elsewhere. This board is getting cluttered; I keep hearing that Saul is getting tired of maintaining this board. Personally I find it tiring just trying to keep up with all the back and forth folks are doing on Elastic. I’d much rather read quality analysis on potential new investments or why our current investments are still the best places for ones money.

Saul sold Elastic; how many more times that he have to justify that decision?

Please don’t email me and try to justify why it’s appropriate to discuss Elastic here!
(Or to say I shouldn’t post here.)

As far as I’m concerned Elastic is the new Tesla and should be explicitly excluded for discussion here.

Best regards to all and Thank You Saul for maintaining a great board!

Robear

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