Specialist
Former VP at Databricks Inc
Agenda
- perating environment for Databricks and data lake peers, highlighting demand trends and market opportunity across sub-sectors and industry verticals
- Competitive dynamics between Databricks and Snowflake (NYSE: SNOW), as well as coopetition with AWS (NASDAQ: AMZN), Google (NASDAQ: GOOGL) and Microsoft (NASDAQ: MSFT)
- Product roadmap and market expansion – growth opportunities and impact of partner strategy
- Outlook for Q4 2021 and beyond – new round of funding, emerging threats, market disruptors and opportunities leading up to potential IPO
Questions
1.
Could you outline Databricks’ operating environment, highlighting 2-3 key trends?
2.
What are the key headwinds and tailwinds for Databricks?
3.
How sustainable do you think demand levels are for Databricks and the wider market? How might demand trend for these types of solutions?
4.
You mentioned there are five major companies in this market. Snowflake highlighted a TAM of USD 90bn for the data lake category, already up from USD 81bn when it initially IPO’d. How do you think about the
overall market opportunity that Databricks and its peers are competing for? How penetrated would you say it is?
5.
Could the biggest opportunity for Databricks and its peers be in the Fortune 500 company set? Will it be in the broader enterprise segment or down into the mid-market? What sub sectors or industry verticals might be fuelling adoption?
6.
What are the competitive dynamics between Databricks and Snowflake? How do they tend to resonate with customers and compete directly?
7.
Databricks and Snowflake come at the market from two different ends and will be converging and competing more against each other. When do Databricks’ products win out vs Snowflake’s, or vice versa? What about for Snowflake’s traditional data warehouse vs Databricks SQL? Did Databricks SQL get much traction in customers that were already using or contemplating using Snowflake?
8.
Could it take a while for Databricks and Snowflake to effectively compete at scale with the enterprise customer base?
9.
Could you outline the frenemy or coopetition dynamics that Databricks has with companies such as AWS, Google and Microsoft, given their competing offerings with Redshift, BigQuery and Synapse, respectively?
10.
Do you expect AWS and Google to make a more concentrated effort to compete with Databricks in its core market? Alternatively, would it be more worthwhile to build up their products to get enough sales off of that but really leverage Databricks as a partner to get compute spend going through it?
11.
What are your thoughts on potential disruptors? Companies such as C3 and Palantir come to mind, or even more start-up tech companies such as Dremio.
12.
What is the largest product opportunity for Databricks? How might its open-source nature factor into its ability to be nimble and build out a new offering?
13.
How does the use of technology partners play into the differentiation and the overall breadth of Databricks’ offering? Is it more in line with Snowflake there?
14.
How might Databricks’ partner strategy play into go-to-market and customer acquisition? What are your thoughts on the sales mix between direct and channel or partner referral?
15.
Databricks closed 2020 with USD 425m in ARR. This has since grown 75% YoY after the most recent round of funding up to USD 600m. Could the 75% YoY growth remain flat or accelerate as the company scales?
16.
It seems ACV [annual contract value] expansion is inevitable with the existing base, given Databricks’ consumption model. How do you weigh the relative revenue impact of expansion with existing customers and increasing that account size vs the revenue gains from adding new logos? How do you think about those relative growth opportunities and the contribution of each as Databricks penetrates the market and picks up more customers?
17.
Databricks closed another round of funding at the start of September 2021 and is now valued at USD 38bn, up USD 10bn since its last round in February 2021. What are your thoughts on this 63x ARR multiple? Where might the company deploy some of this capital to maximise results? How fairly valued is this given what’s going on in the market?
18.
What is the biggest risk and opportunity for Databricks? How does this factor into a potential best- and worst-case scenario over the next 1-2 years?
