Tel Varon's Blog

What does Snowflake do?

In recent years, companies have been collecting exponentially more data on their customers. They build increasingly complex models with that data to predict what their customers will want and make the most profitable offers to them. The traditional on-site databases cannot scale to the data storage and query processing that this advanced analytics requires.

Why is Snowflake Successful?

Snowflake is, hands down, the best at what they do. 18 months ago, my Fortune 500 employer conducted an extensive RFP for a new data warehouse provider. We had a strong bias against using a cloud service. Once we determined we needed to use a cloud service, we had an equally strong bias toward bundling the warehouse service with the cloud service provider.

Is there any reason to be skeptical?

Absolutely. Snowflake’s business model has advantages, but also carries risks. Being a cloud software provider has enabled them to scale rapidly and focus on making the database great. However, it also puts a layer between them and their customers.

What do I think of Snowflake’s valuation and prospects?

At $240/share, Snowflake is currently valued at about 132 times its annualized revenue run rate, or 260 times its actual annual revenue. Zoom, by contrast is valued at 90 times sales. Salesforce, with its $19B in revenue, is valued at 11 times sales.

What do the Jets have to pay to keep Adams?

Let’s look at what he’s poised to get: 2020: $7M in base salary, prorated bonus and roster bonus, $3.5M of which is guaranteed2021: $9.86M – His 5th year option, which the Jets have exercised. Guaranteed for injury.2022: Jets will have option of using franchise tag. The current number for safety is $11.44M.