We track the fifty most important companies in technology. Last week that meant Nvidia GTC in San Jose, CA and the Elastic Public Policy Summit in Washington DC. This week, with a welcome break from earnings, we’ll be getting ready for the big annual Optical Networking conference, which moves from San Diego for the first time to my own San Francisco.

You’ll find a full calendar of events that could matter to you at the end of this note.

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As always, I’m focused on three things:
1) Technology-driven change;
2) the latest in innovation and startup trends, and;
3) stock fraud.

Companies Discussed

In This Note:

• Companies Discussed

• DOGE Snaps, Elastic Stretches

• Tweet O’ The Week

• Epistrophy In The News

• 📆 of Epistrophy Events

• Availability This Week

DOGE Snaps, Elastic Stretches

The most consequential insight I left with from Elastic’s Public Sector Summit in Washington, D.C. last week, wasn’t about the software. It was about posture—specifically, the posture of the federal government, now under the Trump administration’s new Department of Government Efficiency (DOGE), toward its own aging tech stack. While much of the discussion swirled around AI, jobs, and modernization, Elastic’s CEO Ash Kulkarni delivered the most grounded pitch of the day: “Efficiency and effectiveness is the mantra—and it should be.”

Elastic (ESTC: NYSE) isn’t a new player in the federal landscape. But 2025 is different. This administration’s approach to digital infrastructure is not just aggressive—it’s surgical. DOGE’s public layoffs, accelerated chatbot deployment, and the shuttering of key digital transformation units signal a new era of consolidation and privatization, in which lightweight, composable platforms are replacing entire departments. And Elastic’s architecture—a vector search engine built for scale, flexibility, and immediacy—is suddenly not just useful, but necessary.

DOGE’s internal memos make no effort to hide the goal: a slimmed-down federal workforce bolstered by automation and AI. The layoffs at the General Services Administration and the closure of its 18F digital consultancy left behind a vacuum—one that Elastic, intentionally or not, is well positioned to fill.

DOGE’s in-house chatbot, powered by foundation models from Anthropic and Meta, has been described by federal employees as “about as good as an intern.” Elastic, by contrast, isn’t building a chatbot. It’s building the substrate. “Whenever you’re dealing with unstructured data,” Kulkarni said during the summit, “Elasticsearch is one of the first technologies that comes to developers’ minds.” He’s right: Elastic is already embedded across the Department of Defense, Homeland Security, and numerous civilian agencies. And now, as those agencies are being asked to do more with less, Elastic’s value proposition—fast search, low technical debt, extensibility—isn’t just attractive. It’s politically viable.

Elastic’s platform is built on the Elastic Stack, centered around Elasticsearch, Kibana, and the newer Elasticsearch Relevance Engine (ESRE). That combination enables high-performance search and real-time analytics across large volumes of structured and unstructured data—including logs, emails, audio transcripts, and images. In an environment like HSI (Homeland Security Investigations), where Kulkarni reported a 40x speedup in human trafficking investigations thanks to Elastic’s AI search capabilities, that isn’t a product demo. It’s a life-saving result.

At the core is vector search—long championed by Elastic before it became fashionable. This allows for semantic retrieval, essential in matching disparate inputs like images, call transcripts, and metadata. The search isn’t simply keyword-driven. It’s contextual, designed to unearth signals buried across modalities and formats. And it’s integrated—not bolted on. “If you’re an Elasticsearch developer,” Kulkarni said, “you are now automatically a Gen AI developer.”

The design matters. Unlike monolithic government systems or standalone AI tools, Elastic’s architecture doesn’t demand massive data centralization—often a nonstarter for federal security and privacy regulations. Its Search AI Lake supports federated data access, letting agencies share intelligence without breaking their internal governance models. That, more than any flashy UI, is what sells in Washington.

Meanwhile, legacy competitors—IBM (IBM: NYSE), SAIC (SAIC: NYSE), and Booz Allen Hamilton (BAH: NYSE)—remain weighed down by heavier services models and stovepiped architectures. Their strength has historically been in federal lock-in. But as Elastic’s growth suggests, that lock-in is no longer guaranteed.

In particular, the General Services Administration is moving to cut federal consulting spending, targeting the ten highest-paid firms expected to collect “$65 billion in fees” in 2025 and beyond. In a February 26 memo obtained by FedScoop, acting Administrator Stephen Ehikian called for the termination of non-essential contracts with top vendors, writing: “Consistent with the goals and directives of the Trump administration to eliminate waste, reduce spending, and increase efficiency, the U.S. General Services Administration has taken the first steps in a Government-wide initiative to eliminate non-essential consulting contracts.” Agencies have until March 7 to identify which contracts with Deloitte, Accenture Federal Services (ACN: NYSE), General Dynamics IT (GD: NYSE), Booz Allen Hamilton, Leidos (LDOS: NYSE), Guidehouse, Hill Mission Technologies, SAIC, CGI Federal (GIB: NYSE), and IBM will be canceled, and which will be retained with a signed justification from senior officials.

Palantir (PLTR: NYSE) is notably not on the list. It has proven capable of adapting its platform and pricing to win new federal business and expand its footprint. But Elastic’s modularity and search-native architecture give it a different kind of optionality—one that aligns with the government’s shift toward interoperability, data fusion, and AI-assisted analysis.

Government spending on software, cloud, and AI continues to swell. According to recent federal budget documents, civilian agency IT spending alone is projected to exceed $72 billion in fiscal 2025, with over $1.3 billion earmarked for AI research and deployment. Yet that figure underrepresents what’s happening in the departments DOGE is targeting: procurement, personnel, buildings, and internal services.

DOGE’s executive order explicitly calls for “modernizing federal technology and software to maximize governmental efficiency and productivity.” That’s not a nod to legacy modernization—it’s a full rewrite. With 1,000+ GSA jobs cut, and 18F disbanded, the government isn’t hiring more developers. It’s looking for platforms it doesn’t need to train people to use. That favors Elastic’s model, where one developer “walks into an organization and says, ‘I used this software somewhere else,’” as Cory Johnson put it during his onstage interview with Kulkarni.

At the summit, the attendees weren’t early-stage tech evangelists. They were senior agency staff, military IT leaders, and policy heads. And the mood wasn’t utopian. It was urgent. These are people being told to cut costs and hit performance benchmarks with less staff and tighter timelines. That’s why Elastic’s ease of deployment mattered so much. “It’s an easier onboarding experience,” Kulkarni said. “It’s not creating a new database. It’s not reinventing the wheel.”

I sat through a discussion with Hussein Johnson, Senior Cybersecurity Analyst for the U.S. Army, who outlined how Elastic’s AI tools were helping reduce “technical debt”—the accumulation of outdated, brittle systems that hinder efficiency. That same afternoon, a Defense Department panelist described how inter-agency data silos were breaking down using Elastic’s secure federated access model. “It’s the same data,” Kulkarni had said the night before over dinner. “Cybersecurity and observability use the same underlying logs—why duplicate it?”

That’s the crux of Elastic’s advantage. It isn’t just about AI. It’s about architectural elegance in a government sector bloated with point solutions.

If DOGE succeeds—or simply continues—Elastic could be a major beneficiary. The collapse of internal federal tech teams opens room for best-in-class developer platforms, especially those already widely adopted. Elastic’s open-source roots and developer evangelism mean it doesn’t need a top-down sales motion to win government deals. It just needs to keep being the tool engineers reach for first.

There’s risk, of course. DOGE’s political volatility could make it hard to predict long-term contract durability. And Elastic’s revenue concentration remains weighted toward a single channel partner, accounting for 11% of FY24 revenue. But neither risk undercuts the core thesis: Elastic has built a platform well suited to the AI-driven modernization of government services, at a moment when that transformation is accelerating under new political leadership.

IBM, SAIC, and Booz Allen have the scale—but not the velocity. Elastic has both.

In a year when “efficiency” has become both the political and technical mandate in Washington, Elastic is speaking the right language. It’s not promising to replace humans with AI. It’s helping the remaining humans work smarter, faster, and with broader access to critical data. That’s the promise of software when it’s done right.

DOGE is undeniably a chaos agent. It’s hurting consumer confidence, business planning and thousands of undeserving public servants and their families. But it’s also shaking up the purchasing environment in the Federal Government, and some benefit may well accrue to Elastic. 

Tweet O’ The Week

Epistrophy In The News

Last week, I was in New York City for a series of interviews. On Schwab Network, I discussed the shifting center of gravity in artificial intelligence—and why Elon Musk’s latest moves at Tesla (TSLA: NASDAQ) may signal a deeper convergence between automotive and AI platforms. On NewsNation with Connell McShane, I broke down the political and structural drivers behind DOGE’s digital transformation cuts, including what the layoffs and chatbot pivot reveal about federal IT priorities. And on Yahoo Finance TV with Julie Hyman and Josh Lipton, our conversation ranged from AI infrastructure to the evolving role of enterprise search, cybersecurity investment cycles and the uncertain future of Boeing’s (BA: NYSE) commercial business. Bright lights big city!

📆 of Epistrophy Events

Availability This Week

I’m available all week. Email or even text if you don’t hear back right away. I’d love to expand on the thoughts I’ve share.  Written reports are available to clients, with video summaries on YouTube and, of course our popular summaries of the summaries on Instagram and Tiktok.

I hope these notes are helpful to you. I’d love to discuss them further and, as always, comments, questions and ideas are appreciated.