Why Data Warehousing with Snowflake is Gaining Popularity
Author: Jeff Schodowski | | December 8, 2021
Snowflake is a cloud data platform that stores your valuable enterprise data assets in a data warehouse or data lake, making it easier to retrieve for business intelligence (BI) and analytics.
Since the company’s initial public offering (IPO) in September 2020, Snowflake has attracted a great deal of interest from investors and potential customers alike. So what’s going on with Snowflake right now, and why is Snowflake such a popular data warehouse solution?
The Rise of the Snowflake Data Warehouse
When Snowflake went public in September 2020, the company raised $3.9 billion in capital, enough to make it the fifth-largest technology IPO in history—bigger than the IPOs of other tech giants such as Airbnb, Lyft, and Twitter. Even Warren Buffett’s conglomerate Berkshire Hathaway got in on the action, buying hundreds of millions of dollars in Snowflake stock.
This feeding frenzy helped drive Snowflake share prices higher and higher. Initially estimated to go public at a price of $75 to $85 per share, Snowflake then decided to price its IPO at $120 per share. In the days following Snowflake’s IPO, prices (and enthusiasm) soared even higher: the stock finished the week at $240, double what it had initially gone for.
By November 2021, Snowflake’s Market Cap topped $100B and the company is still generating a great deal of interest from both investors and users. According to the marketing intelligence firm Slintel, Snowflake has grabbed a 17.4 percent market share in the category of data warehousing solutions, second behind only Amazon Redshift.
Even more surprising is that Snowflake has achieved this meteoric rise in just a few years—and as an independent company. Major competitors to Snowflake include Redshift, BigQuery, Azure SQL Data Warehouse, and Db2, all of which are backed by major technology firms: Amazon, Google, Microsoft, and IBM, respectively.
Of course, savvy tech industry professionals were well aware of Snowflake before its IPO. In 2019, Forbes placed Snowflake among the top five companies in its “Cloud 100” rankings, which it calls “the best, brightest, most valuable private companies in the cloud.” Some analysts even say that Snowflake single-handedly “revived the data warehouse industry by building (and perfecting) a cloud-based data platform.”
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Features and Benefits of Snowflake Data Warehousing
We’ve discussed the “Cinderella story” of Snowflake’s data warehouse offering. But we’re still missing the answer to one crucial question: why did Snowflake get so popular in the first place? In this section, we’ll investigate 4 reasons why Snowflake has received so much attention.
Older, more established enterprise software firms (e.g. Oracle and Microsoft) got their start by selling on-premises applications. With cloud computing now a business best practice, however, these software providers have also released cloud versions of their software—in many cases, preferring and prioritizing the version in the cloud.
Snowflake is different. Because it was founded later in 2012, when cloud computing was beginning to take off, it could adopt a “cloud-first” stance immediately. The Snowflake data platform was built with the cloud in mind and could take advantage of the unique technical distinctions of this environment. Companies that are beginning their own IT migrations to the cloud therefore view Snowflake as a natural choice.
Snowflake is truly Cloud Native. That means there is no hardware to manage, no software to manage, and all the traditional back-office work is managed by Snowflake.
Another advantage of Snowflake data warehousing is the platform’s superior performance. While no single data warehouse solution is clearly better and faster in all situations, Snowflake certainly holds its own when compared with offerings from industry giants.
For example, a data warehouse benchmark by the data integration company Fivetran ran a series of highly complex queries using four popular cloud data warehouse solutions: Snowflake, Google BigQuery, Amazon Redshift, and Presto. The report concluded that Snowflake was both the least expensive and returned the fastest results.
Rich feature set
Snowflake has a feature rich set of of technical functionality that helps set it apart from other data warehouse solutions. These features include:
- Separation of storage and compute, which allows users to scale both resources dynamically and independently of each other.
- A cloud-agnostic approach, with the ability to run on public cloud providers like Amazon Web Services (AWS) or Microsoft Azure (preventing vendor lock-in issues).
- A “Time Travel” feature that allows access to historical data (e.g. for backups or restoring information that was accidentally deleted).
Like all cloud vendors, Snowflake uses an on-demand cost model. Data warehouse pricing can get complicated at the best of times, so many customers appreciate Snowflake’s (relative) simplicity and transparency. Snowflake storage costs a flat rate of $23 per terabyte per month, while compute costs start at $0.00056 per second per credit.
The frenzy surrounding Snowflake isn’t like the dot-com bubble 20 years ago: there are solid, legitimate reasons the company is so popular among investors and customers. So with that said, how can you enjoy the benefits of Snowflake data warehouses for your own organization?
If you’re considering a migration to a Snowflake cloud data warehouse, Datavail is here to help. We’ve assisted hundreds of clients in moving their IT infrastructure to the cloud. Looking for how to get started? Our white paper “Moving Your Data Warehouse to Snowflake: What You Need to Know” assembles all the tips and best practices you should know before a Snowflake migration.
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