The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst
: Congrats on the quarter. Janesh, on the cloud point, we are getting some questions why is it decelerating. I understand the point that there is a
pretty tough comp and the contract, I guess, it gets easier through the year. So should investors expect kind of the cloud growth rate to edge
higher through the year? Or as -- given the evolving macro landscape, do you expect to see any change in the consumption patterns of Elastic
Cloud if the environment kind of deteriorates?
Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst
: Understood. And Ash, one for you. It seems like enterprise tier is doing really well. You obviously added searchable snapshot; now you're adding
the cross-cluster search and application. How should we think about the opportunity within the client base to upsell them to those higher tiers?
And how are you enabling sales to kind of help achieve that?
Question: Matthew George Hedberg - RBC Capital Markets, Research Division - Analyst
: I guess for either of you, and Janesh, you have more history here. But I wanted to drill into AWS a bit more. Obviously, we're 1 quarter in here. It's
just a lot smaller than the other 2 at this point. But can you sort of maybe compare and contrast the level of uptake that you're seeing with AWS
versus maybe when GCP or Azure came on board, anything different there? Obviously it's a much bigger base of AWS. But just sort of curious on
some initial observations there.
Question: Matthew George Hedberg - RBC Capital Markets, Research Division - Analyst
: That's super helpful. I guess -- yes, I was trying to, I guess, I was trying to get -- the relationship changed recently was more of my question. But you
answered it great, so yes.
Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst
: Congrats on the results, Ash and Janesh. Janesh, I know you talked about consumption trends in the cloud business a few quarters ago. You talked
about how the shift within the SaaS business from subscription to consumption could be minimizing the revenue to be recognized at the front
end, but you also expressed confidence as customers started to ramp up their workloads that you could see a nonlinear, sort of implied nonlinear
growth in the cloud business. So as we progress through that motion, where are we with respect to how customers that are nearing the first
anniversary or maybe even post the first anniversary of signing these cloud contracts when the consumption trends should begin to accelerate?
And if we're not seeing it now, when are we likely to see that? And I have a follow-up question.
Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst
: Great. And one for you, Ash. As you navigate towards the $1 billion in cloud revenue by the end of fiscal '25, how do you balance the on-prem
subscription business versus the cloud business? At some point, I would suppose that you hit an inflection point and you do better in one and
worse in the other, or maybe equally good in both? How are you managing through that inflection point as the cloud becomes a larger and larger
part of your business?
Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst
: I love the ring -- the sound of $1 billion.
Question: Steven Richard Koenig - SMBC Nikko Securities America, Inc., Research Division - Analyst
: I've just got 2, and I'll just throw both of them out there at once, if you don't mind. First one is a little bit in the weeds, but you brought up earlier
the relationship with AWS and how it's more settled now, et cetera, and you're partnering well. And I'm just trying to -- I want to square that with
the fact that they did a big open search release back in May, and that our data shows they put a lot more development resources on open search.
So are you saying they're not really going to market aggressively with that product? Or kind of how do we square those 2 things?
And then just not -- so that we don't end in the weeds. So my bigger picture question is, can you give us any color on how your -- the complexion
of your use cases that you're selling to new cloud customers versus your -- more of your on-prem use cases?
Question: Steven Richard Koenig - SMBC Nikko Securities America, Inc., Research Division - Analyst
: Got it. Congratulations on the very consistent results.
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