Elastic appoints former McAfee executive Kulkarni as CEO, replacing Banon

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Shay Banon, co-founder and CEO of Elastic NV, center, rings the opening bell during the company’s IPO on the New York Stock Exchange on October 5, 2018.

Michael Nagle | Bloomberg | Getty Images

Search software maker Elastic said on Wednesday that Ashutosh Kulkarni, who joined the company as chief product officer last year, will replace co-founder Shay Banon as CEO.

Elastic stocks fell as much as 8% in extended trading after the announcement.

Banon is assuming the role of the company’s chief technology officer effective immediately, Elastic said in a statement. This is a position he held from 2012 to 2017.

Banon took Elastic public in 2018. The stock is up about 59% from the closing price of $ 70 on its first day of trading. It fell 15% in December after the company reported a larger-than-expected quarterly loss. Last week it was among the actions that were taken in a bigger software sale, down 12%.

In an interview with CNBC, Banon, who returned to Israel two years ago from Silicon Valley, said he told the board he wanted to make the change.

“I thought about what a world would be like where I potentially wouldn’t be the CEO, balancing the family and everything in between,” he said. “A few months ago, I realized that I would like to take on the role of CTO and not CEO.

Banon said he recommended Kulkarni for the top post.

Kulkarni joined Elastic from security software company McAfee, where he was executive vice president and product manager of his corporate business group. He held leadership roles earlier in his career with content delivery network operator Akamai and data integration software company Informatica.

Kulkarni said he is focused on accelerating Elastic’s transition to providing cloud services. About a third of total revenue came from the Elastic Cloud offering in the second fiscal quarter, with cloud revenue increasing 84% year over year.

Competitors include Amazon Web Services, which introduced Amazon Elasticsearch Service in 2015, building on the open source Elasticsearch software that Elastic popularized. A change in the open source software license for Elasticsearch last year “created the kind of clarity in the vast marketplace that was exactly what we wanted,” Kulkarni said.

AWS changed the name of its product to Amazon OpenSearch Service in September.

“Now there’s only one Elasticsearch, and it’s from Elastic,” Kulkarni said. “Yes, there’s this thing called OpenSearch, but it’s a different name and a different platform. The platform is fundamentally different.” An Elastic lawsuit against AWS for trademark infringement and false advertising is pending in Federal District Court.

Elastic has said Paul Appleby, president of the company’s global field operations, will be leaving the company. The sales teams report to Michael Cremen, who joined Cohesity as Sales Director in October.

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