Out of curiosity, did you pursue a rev share model with Elastic (Co) for your Elastic managed service? I guess that's not something thay can be discussed openly but recognizing you probably had 10x their revenue in the managed service and another 10x their revenue in compute behind the OSS, I wonder if there could have been a proactive happy middle ground found years ago.
I suppose that they might not have accepted something that was too small percent wise and hence might have preferred to go head to head no matter where that might have gone.
My real sense for why they've struggled to out maneuver is their lack of execution on their managed service (9 years in market, still minority of their revenue); while you had a head start and I'm sure that's what they point to as preventing execution, if they had really focused there they might be more like Confluent in terms of being considered the well regarded SaaS leader in their segment.
But I do think it'd be a good look for AWS to proactively help these companies. I didn't think the approach taken with Grafana Labs was right... that looked more like a Faustian bargain to an outside observer (e.g. we'll cut you down at your knees and directly compete but offer you their more expensive version on our paper. It looked incredibly humiliating).
From previous threads, my understanding is Elastic is a pretty arduous enterprise sales process which turned a lot of small/mid customers away.
High vendor management overhead is a huge pain for smaller companies that don't have robust IT to manage those relationships.
The smaller/mid size startups I've worked at almost never acquire "enterprise" software and always leverage pay-by-credit-card type SaaS
Besides operational overhead there's also a much longer acquisition time (no one wants to spend 3-6 months working with a sales team to sign a contract on a project with 2-3 month timeline)
About this topic I'm going to say that at my company we had to choose a managed solution for logs, and there were several contenders. I strongly wanted to use the service offered by Elastic, the company, as we were already managing a lot of biggish clusters and we thought that going with the company behind it would be the best thing to do.
But they made it very difficult to try it out at scale (we generate quite a lot of logs) and at one point they only wanted to talk to the CTO instead of the persons in charge of the PoCs.
That move made them untrustable to me, and they were disqualified from the process. If they wanted to compete on selling the solution to non-technical people that told us all we needed to know about them and how support would be.
We ended up choosing managed Opensearch by AWS, which was a shitshow in several fronts. I wish we had given Loki a bigger chance at that time. We've ended up migrating to it anyway.
Totally and that goes back to their lack of execution as a managed service/SaaS offering because the GTM for those is different, more self-service. If you can't unwind yourself from selling a heavy weight legacy style enterprise software package, you struggle to execute in SaaS, you burden yourself to be understood by your customer as the opposite of modern.
Why? Does Amazon rev share with Red Hat? Does Google rev share with Linux? Or is it the other way around, should perhaps Linux instead pay Android for putting their product in front of billions of eyeballs? I'm sure there's a way of monetizing a billion users even for a kernel.
The answer is no, because Linux is open source. It is a multi stakeholder model where no single actor is allowed to control other actors use of the product. There is ownership, but it is separated from control. This is implemented with the GPL, but the license is only a tool to achieve the outcome, a multi stakeholder product.
This is why Amazon, Red Hat and Google all can justify to employ hundreds of engineers all contributing to a common product. Amazon can work on security functionality with no risk that Red Hat will veto it because it threatens its revenue stream. And while none of the top kernel developers have made billions from their important work, they still earn well, and all the mentioned companies have grown to become billion dollar companies.
Everyone knew this in the 90s, that's why we have the philosophy around open source. Now the discourse has changed. It is suddenly immoral to earn money from someone else's product, because if you start a project then you own it outright. Not only that, but you also have a right to become rich from your work. Discussions how immoral it is for a large company to use a piece of software without paying the original author is a completely normal thing to do, never mind that they would have no problem reinventing that particular wheel in a heartbeat.
Companies like Elastic have latched on to this, and call their product open source, but call foul when other people build products and make a living from their software. They're not actually interested in a multi stakeholder model at all.
How big would Wordpress have been without every cloud actor out there offering to host instances for a cheap fee?
This is why Amazon, Red Hat and Google all can justify to employ hundreds of engineers all contributing to a common product. Amazon can work on security functionality with no risk that Red Hat will veto it because it threatens its revenue stream. And while none of the top kernel developers have made billions from their important work, they still earn well, and all the mentioned companies have grown to become billion dollar companies.
This can't be stressed enough. OSS does monetarily work for the developers too. FAANGs love paying top dollar for OSS maintainers.
There were several proposals made to Elastic at the time, but their attitude was that they controlled the project and didn’t want AWS to make big contributions to the open source distribution that would reduce their differentiation. They were also mixing licenses in the code base and deliberately making it hard for AWS to use.
I was also assisting in the deal with Grafana, which I thought was a good deal on both sides, setting up a framework for AWS and Grafana to work together over a longer timeframe. Ash Manzani who negotiated the deal for AWS later joined Grafana to run Corp Dev for them.
AWS tends to optimize for whatever its customers want, rather than what its partner ecosystem wants. However we did spend some time trying to help open source partners figure out how best to work with AWS and to leverage the marketplace etc. to be successful by leveraging the platform rather than fighting with it. Mongo is a good example of how that can work.
I suppose that they might not have accepted something that was too small percent wise and hence might have preferred to go head to head no matter where that might have gone.
My real sense for why they've struggled to out maneuver is their lack of execution on their managed service (9 years in market, still minority of their revenue); while you had a head start and I'm sure that's what they point to as preventing execution, if they had really focused there they might be more like Confluent in terms of being considered the well regarded SaaS leader in their segment.
But I do think it'd be a good look for AWS to proactively help these companies. I didn't think the approach taken with Grafana Labs was right... that looked more like a Faustian bargain to an outside observer (e.g. we'll cut you down at your knees and directly compete but offer you their more expensive version on our paper. It looked incredibly humiliating).