Cloud Data Warehouse
Snowflake
Introduction
Cloud data warehouse compiles information from different systems so businesses can analyze it together in the same place. Snowflake is a challenger to Amazon Web Services Redshift, as a provider of cloud data warehouse technology,
Snowflake’s offering is agnostic to the underlying data storage system. The capabilities and flexibility of Snowflake’s product make it more advanced than the competing data warehouse from Amazon Web Services. Snowflake partners with, Microsoft and Google Cloud Platform, and competes with them also. Snowflake processed an average of 507 million customer queries per day in the month ended July 31.
The company was founded by Benoit Dageville, Thierry Cruanes and Marcin Zukowski in the year 2012.
Financials
- In the fiscal year that ended Jan. 31, 2020, Snowflake’s revenue increased 174% to $264.7 million compared with the previous year.
- In the sixth month ended July 31, 2020, the company revenue increased 133% year-over-year to $242 million, even as the company lost $171 million.
Valuation
Snowflake shares were listed on the Newyork Stock exchange in September 2020. Snowflake’s share price doubled to $245 on opening from $120, the price at which the company allotted shares in the initial public offer. The market capitalization of the company is around $75 billion which is 500% more than the $12.4 billion valuation that the company received in February 2020 in a private funding round.
Snowflake product is core to enterprise transition to the cloud, and as companies across industry verticals accelerate their digital transformation the company has bright prospects. It is an investment-grade company and one is advised to evaluate the valuation ratios before buying.
Warren Buffett Berkshire Hathaway Inc., and Salesforce Ventures, have each subscribed to the company’s Class A common stock in a private placement, at the same time with the public offering. In the future, it should not come as surprise if Berkshire emerged at one of the largest shared holders in the company.
Future Plans
Snowflake is focusing on large enterprise clients with a specific focus on the financial services industry.
One of the earliest financial services customers of the company is Capital One Financial Corporation. The value of the contract first signed in 2017 is expected to be around $100 million currently. Capital One was the first customer for Virtual Private Snowflake, a product for highly regulated industries. In fact, Capital One was one of the early backers of the company, having invested in a funding round in 2017.
Another marque financial client of the company is Goldman Sach which began using Snowflake’s technology for its consumer banking application Marcus and transaction-banking platform.