The AWS model isn't that they actually do novel development on this software, it's that they grab the code, add a bunch of crufty hacks to it to make it work better in their environment then sell it as a hosted version.
Think of it like the Amazon marketplace equivalent: watch for products doing well, then get the cheapest possible clone made and sell it as Amazon Basic, while harassing the original vendors of these products and promoting their own brand in search results.
Don't try to compete on same market, provide differentiated offering. Focus on consultancy, custom development (plugins etc), on-prem deployments. You are the foremost experts of the software, capitalize that instead of trying to compete on ops stuff which is AWS bread and butter.
That might follow with recognition that your market might be smaller than what Elastic co has so far projected, and even it might not be enough to sustain $15B market cap, but bursting that bubble should not be all doom and gloom. Being small does not equate not being successful.
AWS is doing a terrible job with their es version. and es has aquired endgame and giving endgame away for 'free' with you purchase of es licensing, and the es stack run by es is getting a lot more attention and development that AWS version
Elastic.co has a lot of proprietary add-ons in their cloud and subscription tiers, for example machine learning, application tracing, endpoint security, threat detection, in addition to enhancements to the core software, like fine-grained access control. This is where much of their development and marketing effort goes, and is what differentiates them from others offering ES-as-a-service.
Unfortunately for them a lot of users don't need any of that, and are just fine with the formerly-OSS core.
Better quality is a better answer. AWS charges a big premium for Elasticsearch and I don't think they'd drop their prices to try to squeeze Elastic - for one, it would be unlikely to even work - but even so it's always best to differentiate on being the better quality/"value" than the lowest cost.
Having used AWS Elasticsearch, it has a lot of deep problems with it in its current state so Elastic can compete on value just fine.
In other news, I think the Elastic licensing change beyond being ethically a dick move (legally it's their right), is just horrible business strategy. I said on this site several days ago that Amazon was just going to make an Apache 2.0 fork and keep chugging along, and that's exactly what we're seeing.
> AWS charges a big premium for Elasticsearch and I don't think they'd drop their prices to try to squeeze Elastic
Your margin is my opportunity. (c)
Though AWS still growing too fast atm so they value quantity of services over quality. But once they have capacity they can squeeze out of business almost anyone.
Unfortunately lower cost will do nothing to get you in the door at an enterprise that has a committed spend with AWS. I'm sure Elastic has been finding this out the hard way.
