Shay Banon, Co-Founder and CEO of Elastic NV, Center, rings the opening bell during the company’s initial public offering on the New York Stock Exchange on October 5, 2018.

Michael Nagel | Bloomberg | Getty Images

Search software maker Elastic announced 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 expanded trading after the announcement.

Banon is now assuming the role of technology chief for the company, Elastic said in a statement. He held this position from 2012 to 2017.

Banon listed Elastic on the stock exchange in 2018. The stock is up approximately 59% from its closing price of $ 70 on the first day of trading. It fell 15% in December after the company reported an unexpectedly large quarterly loss. Last week it was among those stocks that got into a major software sell-off, losing 12%.

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

“I’ve been thinking about what a world would be where I might not be the CEO, get family and everything else under one roof,” he said. “A few months ago I realized that I wanted to take on the role of CTO and not the CEO.”

Banon said he recommended Kulkarni for the top job.

Kulkarni joined Elastic from security software company McAfee, where he served as executive vice president and chief product officer of the Enterprise Business Group. Previously, he held executive positions at content distribution network operator Akamai and data integration software company Informatica.

Kulkarni said he is focused on accelerating Elastic’s move to deliver 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 the Amazon Elasticsearch Service in 2015, which is based on the open source software Elasticsearch popularized by Elastic. A change in the open source software license for Elasticsearch last year “gave the market the exact clarity that we wanted,” said Kulkarni.

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

“Now there’s only one Elasticsearch left, and it’s from Elastic,” said Kulkarni. “Yes, there is this thing called OpenSearch, but that’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 the federal district court.

Elastic said Paul Appleby, president of the company’s global sales force, will be leaving. Sales teams report to Michael Cremen, who joined Cohesity in October as Chief Sales Officer.

CLOCK: We are leading the way in delivering search experiences through data, says Elastic CEO

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