Generative AI Will Cause Massive Expansion Of TAM In ‘Search’: Elastic CEO

The Total Addressable Market (TAM) of ‘search’ has grown with Generative AI (GenAI). What is the opportunity like for companies such as Elastic now?

Generative AI is revolutionising the Total Addressable Market (TAM) for ‘search’ by democratising data interaction and making it more human-friendly. It's comparable to the transformative impact of cloud and mobile computing had earlier. Elastic is positioned in the enterprise sector unlike Google and we enable businesses to unlock the value of private data. With Generative AI, search experiences become chat-like, accommodating image-based and conversational queries, which will enhance user satisfaction and business efficiency. The TAM for GenAI is poised for significant expansion, but the scale and timeline remain uncertain, reminiscent of early cloud computing days. I'm personally optimistic about its potential.

But this also means that competition could heat up …

We are already considered to be one of the leaders in the space of GenAI. We intend to work hard to maintain our leadership position, which means that we are going to be investing both organically and looking for ways to accelerate that if need be through inorganic ways. 

How do you view your Indian operations and what kind of investments are you looking to make here?

In terms of our investments, we've always been a distributed by design company. Our expansion in India is not driven by a desire for low-cost talent but a commitment to finding great talent wherever it resides. We don't specify cities; we create offices only when there's a talent pool worth tapping into, like our growing team in Bangalore. India hosts various roles, from core engineering to customer-facing teams and back-office functions like finance. We have nearly 200 employees in India out of our 3,000 worldwide, with our Indian entity established just two years ago. Our approach is talent-centric, reflecting our commitment to a distributed work model.

In which sectors are you observing the highest traction in India?

In all verticals. But our biggest verticals right now are Financial Services, Government and digital natives. We are starting to make inroads into manufacturing as well.

What makes Elastic a good option for FS sector in India?

The amount of data. Anytime you have lots of unstructured data, that's what we are best at. We make all your unstructured data searchable and make it possible for you to monitor your live system and secure them. Banks, telcos, government organisations and digital natives tend to have lots of data. And their greatest strength lies in being able to leverage that data. That's where we come in.

What makes India a differentiated market for Elastic? What stands out?

The most exhilarating aspect is the sheer scale. I recently met with the CIO of one of India's largest telecommunications companies and he referred to it as 'population scale.' While in the US, telcos or banks might boast about 70-80 million customers, in India, they're dealing with 400 million customers. India's demographics, with a population of 1.4 billion and growing, set it apart from any other part of the world. Even the US, with around 300 million people, appears comparatively small. To meet the needs of its citizens, India faces challenges on a scale nearly an order of magnitude greater than other countries. This places significant demands on IT and engineering organisations, both in the public and private sectors, to leverage the best available solutions. That's what makes the situation so exciting.