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June 4, 2019

Slootman Makes It Snow at Snowflake Summit

Snowflake CEO Frank Slootman makes it snow

When Frank Slootman was hired to take the helm of Snowflake Computing, one of his first questions was “Does the company have a user conference?” His new colleagues responded yes, in about a month, in fact.  “And you’re the first keynote,” they said. “Nothing like pressure,” the new CEO replied.

If Slootman was nervous, it didn’t show during his opening keynote today in San Francisco, California. In his first public appearance since taking the job, the technology veteran demonstrated a firm grasp of the company, its products, and the dynamics of the cloud data warehousing space.

Plus, Slootman can make it snow on command, which he did several times during his 30-minute talk. With a click of a button, snow started falling on the screen behind him. “Snow is magical,” he said.

That magical feeling seems to be surrounding Snowflake Computing right now. The company, which launched its service in 2015, seemingly came out of nowhere to be a major contender in the nascent market for cloud data warehouses. The company consistently competes and wins against the hosted data warehouse offerings of AWS and Microsoft Azure – and today it announced support for Google Cloud.

Snowflake has 2,000 paying customers today and is growing at a 3x clip, Slootman said during the keynote. “Three hundred to 400 more are being added per quarter,” the Netherlander said. “That alone is a reason to have a conference.”

That company, which was reportedly valued at $3.5 billion following its $450 million financing round last October, sold out all 1,500 or so passes to its inaugural Snowflake Summit several weeks ago. It currently has 1,200 employee, and is on pace to grow to 2,000 employees by the end of the year.

“That’s a blizzard in its own right,” Slootman quipped.

Whirlwind Tour

It’s been a busy month-long introduction for Slootman leading up to Snowflake Summit. But it’s clearly not his first rodeo.

The 60-year-old technology executive is no stranger to the SaaS business, having taken the hosted IT services firm ServiceNow public in 2012 as its CEO. Nor is he a stranger to the enterprise storage business, having taken DataDomain public as its CEO before being acquired by EMC (now a part of Dell).

However, Snowflake is a slightly different beast, combining the analytical power of an MPP-style SQL database with a cloud business model that charges customers based on how much work they do. Whereas the public cloud companies make money for just storing your data, you don’t pay Snowflake anything until you do something with the data. That’s a detail of the Snowflake business model that Slootman really likes.

“One of the great things that Snowflake did is this separation of storage from compute,” Slootman said. “It took me a few weeks before the significance of the architectural underpinnings really started to sink in, because it manifested itself all over the place. It’s just so important. But that really adds to the scale, because the storage and the scale is no longer inside the compute cluster.”

That separation lets you either start fast with a lot of data, or start slow with just a little. Either way, the customers pays Snowflake just for what it helps them process, not for what the data it stores.

“Scale is mesmerizing, it’s intoxicating,” Slootman said. “That…starts to enable everything else.”

Sexy Scale

One customer that Slootman talked with boasted that he was able to do 15 times more work on Snowflake for the same amount of money they were spending on a competing data warehouse, the CEO said during his keynote. “The first thing that went through my mind was maybe we’re not charging enough,” he said.

“But the second thing was, wow! It’s nice to be able to do a lot more with less money,” he continued. “But the real point here is this is transformational. People start thinking differently about technology and what they can do with it when you radically change the economics.”

Snowflake CEO Frank Slootman spoke this morning at the inaugural Snowflake Summit in San Francisco, CA

Unlike transactional workloads, there’s not a solid upper bound for demand for analytical processing capacity. The number of ways data sets can be stacked and sorted isn’t infinite, but it’s certainly greater than the ways in which transactions can be processed, on the cloud or otherwise. And new sources of analytical data are being added all the time, with many of them originating on the cloud.

All these signs point to good times ahead for Snowflake, which former CEO Bob Muglia had penciled in for an IPO, perhaps in 2020.

Considering Slootman’s history with ServiceNow and DataDomain, an IPO would seem to be the ultimate goal here. But first, there’s a business to grow, and the key to that growth is scale.

“The sexy part about the technology that I sort of got sucked in with is this performance comparison,” Slootman said. “Last week we talked to a customer [who said their] ingest time went from 12 hours down to 10 minutes. They ran their most optimized query on that data set, and that went from 20 minutes down to 10 seconds. At this point, I feel just like smoking a cigarette and pondering what it all means.”

Slootman clearly will enjoy competing and winning in the cloud data warehousing space. But to take Snowflake to the next level, Slootman wants to leverage its scale productivity advantages into the next thing, which will likely involve machine learning and AI. The new Snowflake Data Exchange announced today ostensibly is part of that plan.

Salesforce became a much bigger company than Siebel because they transformed it. ServiceNow became a much bigger company than BMC because they transformed,” he said. “Snowflake is going to completely transform data warehousing in terms of how we have historically thought of it, because of the scale and because of the economics.

“Productivity changes everything,” he continued. “Everything changes when you have the scale, performance, and productivity that we have, and that’s the reason why we’re here.”

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