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        Matt Aslett's Analyst Perspectives

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        Snowflake Expands Data Platform with Container Services

        I previously wrote about the challenge facing distributed SQL database providers to avoid becoming pigeonholed as only being suitable for a niche set of requirements. Factors including performance, reliability, security and scalability provide a focal point for new vendors to differentiate from established providers and get a foot in the door with customer accounts. Expanding and retaining those accounts is not necessarily easy, however, especially as general-purpose data platform providers evolve their products to respond to competitive threats. The same issue impacts vendors in the analytic data platform market. While Snowflake has been hugely successful in helping to drive adoption of cloud-based analytic databases, the established providers are evolving to respond. To maintain and expand its importance to customers, Snowflake is itself evolving, with an aim to provide not just a cloud-based data warehouse but a cloud-based platform for a wider analytic ecosystem. 

        Snowflake was founded in 2012 to build a business around its cloud-based data warehouse with in-built data-sharing capabilities. Now described as a data cloud, Snowflake hasVentana_Research_Benchmark_Research_Analytics_Cloud_Deployments_without_DK_20220713-png expanded its reach over the years to address data engineering and data science, and long-ago moved beyond being seen as just a cloud data warehouse. In doing so, the company has established itself as one of the most prominent analytic data platform providers, generating revenue of $1.3 billion from 8,537 customers in the first half of its fiscal 2024. As previously noted, Snowflake’s pace of growth has declined in recent years compared to an early period of rapid acceleration. However, it still boasts growth figures that many of its established rivals would envy, with its customer count as of July 31 up 25% year-on-year and second quarter product revenue up 37% year-on-year. The increase in adoption of cloud-based analytics services is expected to continue. Nearly 9 in 10 participants in Ventana Research’s Analytics and Data Benchmark Research (89%) use or plan to use cloud for analytics.  

        Snowflake is not resting on its laurels, and at its recent Snowflake Summit customer event, it announced a slew of new product features, functions and packaging designed to cement its importance to existing customers and drive expansion into new accounts. One of the core tenets of the company’s positioning is that it provides an elastic multi-cluster cloud compute platform that runs on optimized storage to support multiple data and analytics workloads. Increasingly, these workloads include not only those running on Snowflake’s native data processing engine, but an ecosystem of applications and cloud services provided by partners. Key announcements at Snowflake Summit 2023 included the public preview of the Snowflake Native Apps Framework and the private preview of Snowpark Container Services, which enables customers to run their own choice of third-party software, including programming languages, data science libraries and generative AI models, on Snowflake Data Cloud. 

        Snowflake is still most often used as a data warehouse for SQL-based analysis of structured data. However, the company has demonstrated that it has bigger plans, expanding its addressable market with capabilities for data engineering and data science, as well as the analysis of semi- and unstructured data. The ability to deploy and process non-SQL code is enabled by the Snowpark developer environment, which was introduced in 2020 and is designed to enable data engineers, data scientists and developers to execute custom Python, Java, and Scala code, as well as utilize the embedded Anaconda repository, for advanced analytics workloads, including trained machine learning (ML) models. Snowpark also includes integration with Streamlit, the Python-based rapid application development and iteration environment, which was acquired by Snowflake in 2022. In addition to Snowflake’s warehouse engine, Snowpark can now utilize Snowpark Container Services, enabling users to deploy languages and libraries not already supported by Snowflake on Data Cloud using Docker containers. The company also announced that several partners — including Alteryx, Amplitude, Astronomer, Dataiku,, Pinecone, SAS Institute and Weights & Biases — are delivering products and services with Snowpark Container Services. Snowflake also announced a partnership with NVIDIA to make NVIDIA AI Enterprise available with Snowpark Container Services, along with plans to host NVIDIA’s NeMo platform for developing large language models (LLMs) and to collaborate on support for NVIDIA GPU-accelerated computing. Separately, Snowflake also launched its own Document AI LLM for extracting information from unstructured documents and converting it into structured data. Document AI is based on the generative AI technology Snowflake acquired with Applica in 2022. Snowflake’s search experience is also due to get a boost from generative AI thanks to the recent acquisition of Neeva.  

        Snowflake also announced the public preview of its Snowflake Native App Framework which enables developers to build and test applications that run natively on Snowflake Data CloudVR_2023_Assertion_ADP_Cloud_Adoption_19_S and can be accessed from the Snowflake Marketplace. Companies including Capital One Software, Goldman Sachs, LiveRamp and Matillion have already used the framework to develop Snowflake Native Apps, and customers are now also able to utilize Snowflake capacity commitments to buy data and native applications from the marketplace using the Marketplace Capacity Drawdown Program, simplifying procurement and payment. Other announcements made during Snowflake Summit 2023 included support for the Apache Iceberg table format, the ability to define and classify data quality metrics, and the Snowflake Performance Index to provide customers with the ability to compare their performance with a comparable cohort of stable customer workloads. The general availability of Snowpipe Streaming provides a core building block for ingestion of streaming data into Snowflake, including the unification of batch and stream processing via join semantics. The public preview of Dynamic Tables enables streaming transformation and a building block for creating pipelines based on chained dynamic tables, with streaming SQL via materialized views, potentially facilitating the continuous processing and analysis of streaming data. 

        I assert that by 2026, three-quarters of organizations will use cloud-based products and services as their primary analytic data platform, making it easier to adopt and scale operations as necessary. This will provide ample opportunity for Snowflake to continue to grow, even as it faces stiffer competition from both established vendors and emerging startups. The company’s plans for generative AI are comparatively nascent given the high levels of excitement we’ve seen in relation to LLMs, although it has made some interesting acquisitions; the partnership with NVIDIA will stand it in good stead. I recommend that all organizations considering their options for analytic data platforms include Snowflake in their evaluations. 


        Matt Aslett


        Matt Aslett
        Director of Research, Analytics and Data

        Matt Aslett leads the software research and advisory for Analytics and Data at Ventana Research, now part of ISG, covering software that improves the utilization and value of information. His focus areas of expertise and market coverage include analytics, data intelligence, data operations, data platforms, and streaming and events.


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