- Analysts said that snowflakes and data bricks will increasingly compete for the dominance of big data.
- The two Silicon Valley companies have adopted different approaches in terms of data and business strategy.
- Snowflake has a “crazy” relationship with Amazon Web Services, and Databricks has established a serious alliance.
- Check out more stories on Insider’s business page.
Snowflake and Databricks are two very different young companies with very different methods. They are rapidly defining the booming big data industry-analysts said that they are in a “collision process” and you can see that their establishment may be just The road to great competition in the next technological field.
Snowflake helps companies move data to structured virtual warehouses, where sophisticated business analysis can be run. Led by the brutal CEO Frank Slootman, Snowflake set a record for the software industry̵
Databricks takes a different approach-both processing data and business strategy. This $28 billion start-up can help companies analyze their raw data anytime, anywhere, and help customers use their data in AI algorithms. CEO Ali Ghodsi methodically raised $1.9 billion in venture capital through a patient IPO route.
Here, things become very interesting. Snowflake is committed to helping customers make better use of their data, thus entering the AI field. Databricks is adding more business analysis capabilities. As a result, two young companies that grew up without barriers suddenly attracted competing eyes from each other and began to move towards balance.
Gartner analyst Adam Ronthal said the two companies are in a “collision process” because Snowflake has added AI capabilities, while Databricks is more involved in business analysis. Lental said: “They are merging from both sides.” “Over time, they will compete more and more.”
Karl Keirstead, managing director of UBS, said that Snowflake and Databricks still have great market opportunities, and investors are “obviously optimistic” about the data analysis market. The combined market value of the two companies is close to 100 billion U.S. dollars. Snowflake is now valued at US$67 billion, while Databricks’ private value is US$28 billion.
Keirstead said that there is “overlap” between the two companies to some extent, and it may increase in the coming years. Both companies benefit from high demand from companies looking to analyze data in the cloud. One of the keys to the competition that has caught the attention of analysts is the comparative relationship between the two companies and the major cloud computing companies.
“I think the overlap is relatively small, but in some cases, companies can use Databricks instead of Snowflake,” Keirstead told Insider. “Both are young companies. This space is full of vitality.”
Keirstead said that it is “inevitable” that there will be greater overlap within three years, and may even become a more direct competitor, as Snowflake enters the AI field, and predictive workloads and Databricks become Snowflake alternatives. .
Starburst Data CEO Justin Borgman (Justin Borgman) said: “They will obviously go side by side, and from different angles.”
Both Databricks and Snowflake declined to comment on the relationship between the two companies.
Snowflake has a “crazy” relationship with cloud giants
Snowflake collects all the company’s data and “sit” in front of the large public cloud companies, Amazon Web Services, Google Cloud and Microsoft Azure. Slootman positioned Snowflake as a “data cloud” company before the IPO. Many companies acquired Snowflake as the main cloud database company, replacing local database companies such as Oracle.
Once, Snowflake’s market value even surpassed IBM, reaching $120 billion. Since then, Snowflake’s valuation has fallen to $67 billion.
Keirstead said: “This is one of the most successful technology IPOs that our relatively young company has ever seen.” “A market value of $100 billion is absolutely extraordinary. Obviously, developers are excited about this phenomenon.”
Analysts and investors from the cloud computing field said that Slootman led Snowflake in a famous way to conduct a huge IPO, but sometimes angered large public cloud vendors. Snowflake has entered the front line of data companies in a way that enhances its attractiveness, but it may make its relationship with the companies with which it works more complicated.
At the Wing Cloud Data Summit in December (both AWS and Microsoft are sponsors), Slootman told online attendees: “We completely abstract the underlying cloud. You can’t see it, you don’t touch it, and you won’t receive it. Bills. From that, and so on. Experience is highly aggregated. You get a bill from Amazon, which has 500 order items. This is not the case when doing business with us.”
Snowflake does work with all three major cloud providers. Keirstead estimates that most of Snowflake’s revenue comes from its AWS partnership. There are also many “emerging partners” with Microsoft, and the relationship with Google Cloud is “still in its infancy.”
At the same time, Snowflake directly competes with cloud data warehouse products such as Amazon’s Redshift and Google Cloud’s BigQuery.
Keirstead said: “Snowflake and AWS have a very close partnership and have a’crazy’ relationship.”
Snowflake took over the big company, calling itself a simpler solution to manage the company’s data in the public cloud company’s architecture. This brings the IPO to a high level, which may not be sustainable. The stock’s price this week is $234 per share, which is lower than the December high of $388.
Keirstead said that this decline has little to do with the company’s performance or market demand, but the software industry as a whole “dropped sharply” from February to March. He said that the current revision has been largely “step-by-step”, so he rated Snow’s stock as a buy rating.
“The feedback we get from customers is very optimistic,” Kilstead said.
Databricks has started to overlap with Snowflake
Databricks is more focused on predictive analysis-algorithms that can predict the future of AI. Contrary to Snowflake sitting in front of the “public cloud”, Databricks sitting on the “top” of the large public cloud. This means that customers can analyze and build AI programs, and then apply them anywhere in the data.
But recently, Databricks added a new feature that may affect Snowflake’s data warehouse area. Databricks has added SQL (Structured Query Language) search to its tools. SQL can search data in the crudest form. This allows the company to need less help in organizing data-this is Snowflake’s strength.
More importantly, Databricks has received investment from major cloud computing companies as it continues to build venture capital. Snowflake is still a powerful force and has established its own partnership with public cloud companies. However, some analysts, investors, and executives have seen another relationship between Databricks and the public cloud.
For example, Ghodsi defended Amazon from critics, used Google Cloud to attract customers, and attracted investment from AWS, Google, Microsoft, and Salesforce.
“We are believers,” Gene Frantz of CapitalG (formerly Google Capital) told Databricks’ Insider. He called Snowflake a “great company”, but he said Databricks is “a strategic partner for all cloud computing companies.”
Although Databricks has begun to get involved in Snowflake’s business, it may take some time before a large amount of overlap occurs.
Kested said: “Before it firmly overlapped with snowflakes, there were many runways.”
Keirstead predicts that in about two years, there will be about five to six alternatives in the market, of which Snowflake and Databricks will become the “best varieties” in their respective majors. He said that it is “impossible” for the market to be dominated by these two companies alone.
Data warehouse startups like Yellowbrick Data and Firebolt are already facing challenges.
Kilstead said: “The scene is really huge.” “When we communicate with the CIOs and CTOs of large companies, I suggest that cloud-based data analysis is now the top three priorities for spending in 2021.”