Our friends at Elasticsearch, the company behind the open source project, are absolutely killing it. They have surpassed 8 million downloads and penetrated the enterprise at breathtaking speed, and today the company announced a $70 million raise from A-list investors Benchmark and Index Ventures.

Obviously, we think highly of both the Elasticsearch team and the technology, having based our own business on it, so we congratulate them, especially the friends who have helped us directly, Uri, Igor, Justin, Sandy, Vincent, Keith, Brian, Jay, Shay, and probably a few others. Since fundraising isn’t the goal, but just the beginning, they have a lot of work ahead of them.

I have made a few trips of my own, pounding the pavement, and one objection I frequently hear is one of confusion about how a company can monetize when the product is free and open source, often wondering if such a model ultimately leads to commoditization. However, as Elasticsearch CEO Steven Schuurman said to GigaOm, “When a product becomes mission-critical, it becomes monetizable.”

It’s not just Elasticsearch proving this model.

MongoDB is both a company and an open source project with a supposed valuation north of $1 billion. It has spawned an ecosystem of partners and service providers like Mongolab and MongoHQ who have also contributed to the value of the eco-system.

Nobody would question whether Mongo is a billion dollar ecosystem today — yet Elasticsearch has grown faster than MongoDB in its first two years (see this great chart from GigaOm). Other examples include Cloudera and Hortonworks, who are killing it with the Hadoop eco-system. Datastax is doing so with Cassandra. The CouchDB ecosystem has Couchbase and Cloudant (recently acquired by IBM).

Enterprise_Open_Source_Fundraising

The roadmap here is to create a technology that is easy for enterprises to download and adopt. Penetrate the rogue IT budgets, grow from within. Invest in the stardom of your dev team. Make yourself indispensable. A large number of enterprises will need a throat to choke and will be happy to pay for it. Not all of them will pay — but enough will pay to make a sizable dent in the multi-hundred-billion enterprise software market. We here at Qbox are seeing this firsthand, too, with hosted Elasticsearch.