The Unstoppable Rise of Snowflake
Wed 7 Apr 2021 | Finbarr Toesland
What are the factors behind Snowflake’s eye-watering growth?
In the almost seven years since Snowflake publicly launched, this software firm has changed the status quo in its industry and skillfully competed with long-standing incumbents. Snowflake started out as a cloud data warehouse and has quickly evolved to become what it calls a ‘Data Cloud’ that supports a huge range of solutions for business analytics, data integration and data processing.
With a record-breaking IPO at the end of last year, which was the largest IPO by a software company in US history, Snowflake is continuing on its upward trajectory. So what’s behind the rapid rise of Snowflake and how did it come to be so dominant in the cloud data space?
One element that plays to Snowflake’s advantage is its first-mover advantage. Traditionally, most company data was held on-premises in servers the business operated itself. The innovation spearheaded by Snowflake to warehouse data in the cloud and then allow its customers to query the data and extract actionable insights is key to the success it’s enjoying.
For Philip Carnelley, AVP for Software and Analytics at market intelligence firm IDC, a central reason for Snowflake’s growth comes down to its usability.
“What’s so good about Snowflake is that it’s a bit like Apple – it all just works,” says Carnelley. “It’s relatively easy to set-up a new system and easy for people to discover the data they need, fast.”
While Snowflake’s Data Cloud is built on the top of various cloud infrastructure providers, the data sharing capabilities Snowflake offers make it stand apart from rivals. Unlike legacy data platforms, such as Oracle and Teradata, the ability of the Snowflake architecture to separate the storage of data and querying has also helped the software firm attract customers.
Carnelley points to the ease of data sharing both within and between companies as an important value proposition. “Snowflake’s customer can allow access to some parts of their data on a highly configurable basis to their customers. It’s about making sure people with the right permissions see the right information within partner companies, as well as within the company who are running the original data,” adds Carnelley.
Transforming data operations
As a direct to consumer business, British online plant store Patch Plants knows how critically important it is to understand their customers. But to fully know their customers, Patch Plants have to understand the data they collect.
Moving to Snowflake has made these tasks way, way simpler.
“Before using the Snowflake platform, it was much more difficult for people to get access to data,” says Patrick Johnson, head of product at Patch Plants. “[Our employees] would quite quickly hit a roadblock in terms of a question they wanted answers to – they couldn’t self serve.”
This would result in staff putting a request to the business intelligence team to create some sort of bespoke report to answer their question. Now Patch Plants uses Snowflake with a business intelligence tool called Looker that allows staff to run reports themselves.
“Staff can now self serve for a much, much greater proportion of their queries. We haven’t done a scientific study on this, but I would say probably 90% of the queries that people have in their jobs, they can self serve, use it and get answers to their questions,” says Johnson.
Not only has implementing Snowflake helped employees access data insights quickly than ever before but it’s also freed up the business intelligence team to concentrate on more complicated insight tasks and building models, as opposed to creating relatively standard reports and performing time-consuming administrative tasks.
“Moving to Snowflake has made these tasks way, way simpler. The business intelligence team are just spending very little time on that kind of admin stuff now,” he adds.
Large numbers of businesses are looking for ways to extract the most value out of their data. S&P Global, the financial information and analytics firm, has seen this trend across all of the segments in which they operate.
“Clients are looking to harvest their data to help them make better decisions, whether they be investment decisions or business decisions,” says Warren Breakstone, chief product officer for data management at S&P Global. “They want to bring data directly into their environments, into their databases and into their cloud-based solutions.”
The clients S&P Global work with are diverse with some running on Amazon Web Services or Microsoft Azure. S&P Global needs to provide data to clients in the exact way each of those individual clients want to receive it, which is what led them to Snowflake.
Being an agnostic solution, Snowflake can sit on top of each of those various cloud environments, enabling S&P Global the flexibility to offer data and analytics to their clients through multiple channels.
“We’ve been in the data distribution business for a long time and continue to provide this data through desktop solutions, APIs and our Xpressfeed. But we now have an ability to offer that same data through a new cloud based distribution platform, via Snowflake,” says Breakstone.
Adding this additional distribution channel for clients, as well as giving them the ability to take advantage of the data in the formats they want is another way S&P Global is exceeding client expectations with the help of Snowflake.
What’s so good about Snowflake is that it’s a bit like Apple – it all just works
Not only does Snowflake count many major companies across a variety of sectors as their clients, including Capital One, Office Depot and DoorDash, but once companies choose Snowflake, they tend to stay.
Among public Software as a service (SaaS) firms, Snowflake has the second-best retention rate with net revenue retention in the first six months of 2020 reaching 158%, meaning an increase in customer spending of 58% over the previous year.
As Snowflake continues to rapidly grow their bottom-line revenue, attract leading customers and retain them; it’s clear this software company is set for success as it battles against competing firms who have been slower to innovate.