Businessmodel of Elastic

Customer Segments

Elastic provides search, analytics and visualisation tools to a broad spectrum of customers. The Company’s products are utilised principally by medium and large businesses operating across sectors including:

• Retail, where its technology is used to identify relevant products for customers;
• Technology, Software and Computing, where the Company’s technology is used to provide detailed search and analysis;
• Media and Publishing, where the Company’s technology provides real-time readerships data;
• Telecommunications, where the Company’s technology manages real-time client data;
• Financial Services and Banking, where the Company’s technology is used to track and analyse stock trades; and
• Education and Research, where its technology is used to create digital learning content and enhance research capabilities. Elastic counts a number of well-known companies among its customers, including Microsoft, Netflix, Cisco, The New York Times, Adobe, The Guardian, IBM, and Goldman Sachs.

Value Propositions

Elastic provides value to its clients in the following ways:

• Its proprietary technology, which drives its unique product offerings, and is in an ongoing process of development and refinement;
• The accuracy and reliability of its products, which efficiently provide its clients with insightful and useful data and functionality;
• Its brand reputation, with the Company counting a number of high-profile and respected multinational companies among its customers;
• The flexibility of its products, which can be utilised in various ways and across multiple industries, including media, telecommunications, banking and retail; and
• Its industry expertise, with the Company employing a team of specialist technology professionals led by its co-founding partners. ### Channels

Elastic operates a website at www.elastic.co, which provides information on the Company’s suite of services and product offerings. The website also serves as the Company’s online sales channel, with customers able to download Elastic’s software on an open source basis and manage basic subscriptions.

More complicated subscriptions to Elastic’s products are completed through the Company’s own direct sales team, which has a presence across the US, Europe, Asia and Australia, including offices in Seoul, Hong Kong, Tokyo, Berlin, London and Sydney.

Elastic’s own sales and marketing force is supported by a network of channel partners, including resellers and referral partners that assist in extending the Company’s reach, particularly in jurisdictions where it has a limited presence.

Customer Relationships

All of Elastic’s software is open source and is available for customers to download on a self-service basis directly from the Company’s website. Customers are also able to register and manage basic subscriptions, which include additional monitoring tools, without interacting with members of the Elastic sales team.

To access the more in-depth functionality of Elastic’s software products, such as reporting and phone and web support, customers must consult with the Company’s sales team directly. This allows the Company to provide a more personal service to its larger customers, with a view to establishing long-term customer relationships.

Elastic operates a support portal and provides a range of online support resources, such as webinars, video and training. Customers are also able to contact the team directly over the phone or by email. Elastic operates a community forum where users are able to interact with one another, and organises meetups for users to come together in person. It also details all of its upcoming events on its website which allows customers to come and interact personally with members of the Elastic team.

Additionally, Elastic operates social media accounts with Facebook, Twitter, LinkedIn, Xing and YouTube.

Key Activities

Elasticsearch develops and publishes a range of software products, providing search, analysis and visualization functionality to customers across multiple sectors worldwide. The Company’s products are available on an open source basis.

The Company’s core products are grouped under the title The Elastic Stack, and comprise Elasticsearch, which provides search and analytics functionality; Logstash, which provides data collection and enrichment functionality; Kibana, which provides visualisation functionality; and Beats, which provide data leveraging tools.

The Company also provides products named Marvel, Watcher, Shield and Graph that provide customer with additional security, monitoring and visualization tools.

Key Partners

Elastic collaborates with a number of partner companies throughout the process of delivering its products. The Company organises its partners into the following categories:

• Go-To-Market Partners, comprising Premium Reseller Partners, Professional Reseller Partners, and Referral Partners, which assist in extending the Company’s sales and marketing reach;
• Technology and Platform Partners, including software developers, analytics providers and data collection specialists that help the Company to develop its software solutions; and
• Original Equipment Manufacturer Partners, including producers of electronics and computing products that integrate Elastic functionality into their own products. Elastic’s partners include high-profile names such as Cisco, Wipro, Google Cloud Platform, Perceivant, and BA Insight.

Key Resources

Elastic’s key resources are its technology and intellectual properties, its IT infrastructure, its sales channels, its network of partners, and its personnel.

While Elastic’s technology is key to the success of its ongoing business operations, searches of records published by the US Patent and Trademark Office and by the European Patent Office identified no patent applications filed in Elastic’s name.

Cost Structure

Elasticsearch incurs costs in relation to the development of its technology and solutions, the maintenance of its IT infrastructure, the management of its sales channels, the management of its partnerships and the retention of its personnel. Elastic accrues significant general and administrative costs.

It employs personnel across 27 countries worldwide to which it must pay salaries and benefits, and operates a network of 12 offices across Europe, Asia, Australia and the US, representing costs in the form of rental and utility fees.

Revenue Streams

Elastic generates revenue through the sale and licensing of its various software products, particularly its core Elastic Stack suite that includes Elasticsearch, Logstash, Kibana and Beats. The Company’s products are licensed to customers on a subscription basis.

The Company, however, does not disclose its pricing structure for its core products on its website.

In addition to its core products, Elastic also derived revenue from the provision of additional support, security, monitoring and cloud solutions.