Elastic
Elastic co-founders Simon Willnauer, Steven Schuurman, Uri Boness, and Shay Banon
- The Information reported that Amazon Web Services generated $100 million in revenue last year from the top 100 customers of Amazon Elasticsearch Service, a paid service based on the popular Elasticsearch open source search engine project.
- For comparison, Elastic, the publicly-traded company that originally created the Elasticsearch software, did $271 million in sales in its last fiscal year. It's possible that when you factor in all of Amazon's million or so Elasticsearch customers, that it did about as much revenue, all in all.
- Last March, AWS also announced Open Distro for Elasticsearch, its own version of Elasticsearch, which includes some features for which Elastic normally charges its customers.
- Elastic CEO Shay Banon says that he still sees "great adoption" of Elasticsearch, and that Amazon's momentum in the space hasn't seemed to slow down the company's business.
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Last year, the publicly-traded $5.87 billion software company Elastic did some $271 million in revenue, largely thanks to the sale of the premium versions of the popular Elasticsearch open source search engine.
That software, originally created by Elastic CEO and co-founder Shay Banon, is used by companies like Uber and Tinder to search and analyze their data. While the core software is open source, meaning free to use and modify,, Elastic charges for premium features that make Elasticsearch more useful to larger customers.
However, Elastic has long labored under the shadow of Amazon: In 2015, well before Elastic went public, Amazon Web Services took Elasticsearch, packaged it up, and sold it as a service to its customers - something totally legal for it to do, under the standard terms of open source.
Now, it seems, Elasticsearch is a big business for Amazon. The Information reported this week that last year AWS generated $100 million in sales from its top 100 customers for its Amazon Elasticsearch Service. As the report notes, given the popularity of Elasticsearch, and the fact that AWS has over a million customers beyond just that top 100, it's very possible that Amazon makes as much in total from Elasticsearch as Elastic itself does.
Also of note is that the Information further reports that in 2017, Amazon Elastisearch Service revenues from those same top 100 customers are $45 million, meaning it more than doubled year-over-year. Elastic's annual revenues grew some 70% over the same period, suggesting that Amazon's Elasticsearch business could be growing faster than Elastic's.
This news only comes a few months after Amazon partnered with Expedia and Netflix on a project called Open Distro for Elasticsearch, which takes the original Elastisearch software and wraps it up in more open source code - including some features that Elastic normally charges customers for - and makes it all available for free.
'We are happy with our current efforts'
Elastic declined to comment specifically on the Amazon revenue figures reported by the Information. But Shay Banon, the Elastic CEO, tells Business Insider that this news does not change how Elastic runs its business, and he says he's still seeing "great adoption" of Elasticsearch.
"We do know our products are one of the most popular open source products out there, and since folding everything into a single holistic distribution, we are seeing a similar level of adoption of it," Banon said.
When Amazon announced its own Open Distro of Elasticsearch, some this as a major blow to Elastic, while others said this is a sign of AWS embracing open source. Banon himself took Amazon to task in a blog post accusing the cloud giant of misusing Elastic's brand, purposely co-opting its technology, and masking its actions "with fake altruism or benevolence."
Now, though, Banon says that Elastic has seen minimal fallout from the introduction of the project.
"We also haven't seen any impact on our distributions since the launch of Open Distro," Banon said.
Banon said that Elastic is satisfied with its current business model, and he also said that Elastic has significantly increased its investment into its proprietary features for monitoring, maps, and security management - features that will be exclusive to Elastic's own version of the software.
"We are happy with our current efforts," Banon said. "We have believed since inception that in order to build a successful business our company needs to have a set of proprietary IP on top of the open source, and we are making significant investments in it."
