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Offering cloud-based warehousing solutions

It is all about data

Snowflake Inc is an American technology company that builds data warehousing solutions. Their cloud-based solutions enable their customers to store and analyze their data with their analytics tools. Their platform includes data engineering, a data lake, a data warehouse, data science, data applications, and data sharing. The company was founded in 2012 and is headquartered in Bozeman, Montana.

Background and history

Founders with an eye for the future of data

The company was founded in 2012 by Benoit Dageville, Thierry Cruanes, and Marcin Zukowski that all three were experts in data warehousing, with the two former previous working at Oracle. Dageville and Cruanes realized that data warehouses were struggling but concluded that they wouldn’t die out but rather needed to adapt to the era of big data. Bob Muglia, former Microsoft executive, bevame the CEO in 2014. The current CEO Frank Slootman was appointed in 2019 when he had previously retired from the technology company ServiceNow.

Not a SaaS business

Contrary to popular belief, Snowflake isn’t a traditional Software-as-a-Service (SaaS) company. Many traditional companies nowadays operate under a subscription model meaning the customer needs to choose a tier or a package based on anticipated needs in the future. Snowflake instead operates under a consumption model. Meaning customer only pays for what they need. At the same time, revenue is recognized when consumption occurs. As of January 2022, 93 percent of the revenue was consumption-based. Its product revenue category consists of computing, storage, and data transfer services. It’s the majority of its revenue. Customers can also stop their billing when no queries are running and so on, making them only charge for what they use.

The record-breaking IPO

Snowflake was listed on the New York Stock Exchange on September 16, 2020. At this point in time, it was the largest software IPO ever made. The company's share prices doubled on its first day of trading, breaking another record. Prior investors to the IPO include Salesforce, Sequoia, and Sutter Hill Ventures. Perhaps a more remarkable investor in the IPO was Warren Buffet’s Berkshire Hathaway. This was his first investment in a newly public U.S. company since Ford did its IPO in 1956. Due to the sharp rise in share price on its IPO day, Buffet made more than $800 million in profit on the investment in Snowflake’s IPO.

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