I disagree with the assertion that Snowflake has no incentive to improve performance. While I don’t work for Snowflake, I work for a competitor and we’re constantly looking to improve performance to make customers happy.
For the exact reason that the article claims Snowflake wouldn’t innovate, I’d assert that they would. If they are expensive and slow, and a competitor is faster and cheaper, eventually they will see business move to the competitor. We see it all the time.
Chrun for these services take a long time. They are "sticky" and have the baggage of enterprise agreements. With the switching costs never being zero, if SLAs are being met, it's exceedingly difficult to switch vendors.
Alternatively there is a faster impact on new sign-ups when falling behind competitors on costs and benchmarks.
Exactly. For enterprise customers in particular, replacing a SaaS tool that's deeply intertwined with many internal systems is about as easy and convenient as it is for a homeowner to rip out his/her home's existing HVAC system to replace it with a newer, more efficient one. No one ever wants to do that -- unless there's absolutely no other choice.
Their stock price is pegged at new customer acquisition. They signed up over 6k new customers last qtr. This is one of their top stats that they present to investors.
I worded it poorly, but I don’t necessarily mean a full exodus from the platform. In my experience, large enterprises have a lot of workloads running on different technologies (for whatever reasons) and the migration to cloud is a multi-year effort. If someone is just dipping their toe into Snowflake with easy-to-migrate workloads (which is very likely given their relative age in the market) and see performance and cost issues with those workloads, they may be hesitant to migrate the bigger ones and use that as leverage to get Snowflake to improve.
Could you say more about the relative market position of your two companies?
I don't know the market at all, but Snowflake is certainly large and successful (IPOed in 2020, $50bn market cap). I could readily imagine that a company doing so well might not feel the incentive to improve very strongly. Or that they might see themselves more as a sales/marketing-led company than one where technical quality is a key driver. Whereas you folks as a challenger would have a lot more incentive to differentiate yourselves.
You could probably google my username and find out, but I’ll say we’re bigger than Snowflake and are very much entrenched in the enterprise database market :)
For the exact reason that the article claims Snowflake wouldn’t innovate, I’d assert that they would. If they are expensive and slow, and a competitor is faster and cheaper, eventually they will see business move to the competitor. We see it all the time.