Technology Insights on Snowflake IPO Announcement: The Consolidation of Public Cloud Market
According to Gartner, the Public Cloud market is poised to grow further in 2020 even as CIOs continue to place big bets on IaaS to push their digital transformation goals. Cloud spending will remain the number one priority — an outcome of surging demand for remote Cloud management services and virtualization tools due to coronavirus.
The year 2020 will be remembered for some really amazing innovations, tech partnerships and collaborations in the fields of AI Machine Learning, IoT, Cloud Computing and Virtualization. While IPOs always attract incredible responses from the technology investors, this year’s biggest IPO launch will be remembered for the way it holds the potential to change Data Science industry forever. Yes, we are pointing at the recently announced Snowflake IPO.
The decision to go public has opened up new opportunities for Cloud Data Warehouse Software and services platforms competing with Snowflake, which includes established brands such as Google BigQuery, Cloudera, Databricks, Amazon Redshift, AWS EMR, IBM, Azure, Qubole, Rubrik, Panoply, Oracle Exadata and so on.
Below, you will see is how Snowflake is placed in the Gartner’s Magic Quadrant for Data Management Solutions for Analytics:
According to Bloomberg, Snowflake is more valuable than Uber, Dell and General Motors.
Snowflake is different in 2020. It was founded in 2012, almost making its debut ahead of the Big Data wave that hit the global BI market in the last decade. Since then, it has raised $1.4 billion in funding — the most recent funding bringing in $479 million putting its evaluation ahead of the IPO at $12.4 billion. Snowflake reported 100%+ growth in its revenues earned from data warehousing software with its query volume jumping to 500+ million queries daily during the last quarter. The growth pushed its IPO evaluation to $70 billion within months of reporting its massive revenue growth, exemplifying its decision to continue with great customer support during the COVID-19 crisis.
Three target industries for Snowflake driving their success in 2018-2019 and 2020 are:
- Data management,
- Data analytics, and
- Data warehouse.
The number of Snowflake customers more than tripled in 2018, fueling our 247% year-over-year revenue growth.
Customers are exploring new services and pricing models to meet their infinite demands for IT management, elasticity and agile workloads. Snowflake offers all these with the deepest, data-driven insights and price performance available, as part of pay-per second usage models.
In addition, Snowflake delivers this to our customers via a zero-management, cloud-built data warehouse that easily and securely loads, integrates, and analyzes all types of data from a single source of truth.
In an interview with Bloomberg, Snowflake Chief Executive Officer Frank Slootman said: “IPOs for us are milestones along the way. They’re not endpoints. We needed to do this for a number of reasons, especially to raise the stature of the company in the marketplace.”
Slootman said that he’s spent a year speaking with institutional investors about backing Snowflake, and now hopes they will maintain large stakes for at least five to 10 years. He wanted shareholders who weren’t just looking for “momentum,” he added.
What Tech Leaders from Public Cloud Market Say about Snowflake IPO
We spoke to some of the leading experts from the industry who shared their insights at the time of Snowflake’s IPO news.
Danielle Royston, public cloud evangelist, TelcoDR says:
Snowflake’s stock market debut is something to behold. It more than doubled its $120 IPO price yesterday, which has seen the company now valued at over $70 billion. This means it is now worth over 264 times its annual revenue, which is almost unheard of. Not only is it the biggest software IPO in history, its enterprise software, addressing a much smaller market than recent IPOs in the consumer sector, like Uber and Netflix.”
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The worldwide Public Cloud market (IaaS) grew 37.3% in 2019 to total $44.5 billion, up from $32.4 billion in 2018, according to Gartner.
“Snowflake is also unique because, unlike many other software companies that are designed to work across private and public clouds, it’s put all its eggs in one basket – the public cloud. This is an intelligent bet. The public cloud is giving businesses across all industries, plug and play capabilities that can replace outdated manual workflows, creating massive efficiencies and cost savings.
“The response to the IPO suggests that the market is ready for this kind of enterprise software. Industries, like telecoms, that haven’t yet begun to fully explore the power of the public cloud, need to move quickly or be left behind.”-
Snowflake’s USP: Neither Open source, Nor Built by Top Cloud Vendors
Sean Knapp, Founder and CEO of data engineering company Ascend.io, says:
“Snowflake’s IPO marks a turning point for cloud and data technology. While we’ve seen a handful of other cloud-native data platforms such as Datadog and Sumo Logic demonstrate incredible growth, none have done so as remarkably as Snowflake. Moreover, Snowflake has been wildly successful in pulling budgets away from not only on-premises solutions but also from existing cloud-based solutions. In the past year alone, the company’s revenue and customer growth have been nothing short of astonishing. And, as business technology, Snowflake is unique as it is neither open source, nor built by one of the top cloud vendors.”
Sean added, “Snowflake, and companies like it, consistently validate the concept that every company is a data company. For businesses to survive today, they must actively invest in technology that will help them meet their digital transformation goals. To see Snowflake reach this milestone demonstrates that companies are recognizing the value of the cloud and strategically thinking about how data can impact their bottom line.
“Solving the age-old issue of elasticity by separating compute and storage, Snowflake has completely reimagined the data warehouse. However, the company’s true success is its ability to make data accessible to the masses. With a large ecosystem of tools that simplify access to data and make it easy to get started, Snowflake democratizes the ability to do more with data.
“In the early days of big data, teams were limited by their system’s capacity to store and process data. With Snowflake, data teams no longer need to worry about if their systems will scale to accommodate large volumes of data. Instead, the primary challenge for businesses has now shifted from scaling their data volumes to scaling their data productivity.”
Snowflake Ultra-Cool Example how Cloud Environments Should be Handled
Rick Farnell, CEO of data-security solutions provider Protegrity:
“With its historic IPO, Snowflake has created a new standard for what a SaaS company can achieve, as well as set the bar for future startups and their trajectory to fundraising, valuation, and business growth. While the concept of the data warehouse is not new, Snowflake’s success is in simplifying the set-up, use, and management of a data warehouse built from the ground up, specifically for modern Public Cloud environments.
“Snowflake’s unique approach to separating storage and compute is revolutionary in the value it delivers to customers. It’s not just a ‘pay-for-what-you-use’ solution that doesn’t provide value in idle times. Instead, customers get the simplicity of shared-disk architecture and the scale-out benefit of a shared-nothing architecture – all in one solution. Snowflake nailed the user experience and makes it easy for customers to gain value, without having to worry about back-end issues that routinely slow innovative analytics projects. It’s highly flexible and can run on any major cloud. With a strong focus on SQL as an engine, Snowflake’s capabilities are available to the world’s most popular language for interacting with data.”
“Businesses are clearly understanding the immense potential of Snowflake for data-driven transformation. However, data security continues to be a risk factor for global enterprises in all industries. With the planet working and living online, we are seeing a dramatic increase in the creation of sensitive data combined with an increase in businesses deploying machine learning and AI to drive innovation. In response, Snowflake’s partnership strategy has created a unique opportunity to further secure Snowflake’s platform at the data level to help more enterprises unlock value, while keeping data protected every step of the way.”
Snowflake Allows Companies to Take Full Control of Data Management Strategy
Rich Waldron, Founder and CEO of enterprise automation company Tray.io says:
“Snowflake’s IPO underscores the increasing importance of companies not only unifying their data from various sources, but also making it actionable. Companies continue to invest heavily to gather valuable data about customer behavior, product usage, and buying cycles, but the smartest firms are taking advantage of the power of data warehousing to make those vast amounts of mission-critical data accessible and ready to go.”
“The most successful firms we’ve seen are outpacing their competitors by freely flowing business data anywhere it’s needed. By embracing a strategy that incorporates tech stack integrations and intelligent data management, smart companies are breaking down data silos and unifying their most important data to take immediate action. They’re using customer behavior patterns to directly inform future engagement campaigns, or using highly segmented demographic and firmographic data to hyper-personalize messaging that deeply engages prospects. We expect that this ability to take full control of your data will continue to be a key competitive advantage for a variety of companies in the future.”
At the time when businesses are slowing down their market growth and pulling back hiring budgets, Snowflake IPO news is a very positive development, especially for the long-standing partners and collaborators.
For example, Ness Digital Engineering acknowledged Snowflake’s support for data warehousing workloads provides a low maintenance, cost effective way for organizations to consolidate all their data silos into a single source of truth, allowing Ness to deliver near real time, data-driven insights to help clients achieve desired business outcomes.
“Snowflake’s dedicated storage and computing engines enable advanced data analytics capabilities that we use to help customers realize the power of their data and improve productivity and increase revenue,” said Scott Schlesinger, Senior Vice President and Global Head of the Data and Analytics Practice at Ness Digital Engineering.
Scott added, “Combining the power of Snowflake with Ness’s deep modernization capabilities and AI accelerator presents a formidable offering to our customers looking to expedite time to market for data and analytics solutions and seamlessly execute transformative projects.”
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