Specialist
Former director at Snowflake Inc
Agenda
- Key trends impacting Snowflake’s (NYSE: SNOW) operating environment
- Competitive dynamics vs Databricks, Cloudera (NYSE: CLDR) and Confluent, among others
- Product strategy and roadmap
- Coopetition with Amazon Web Services (NASDAQ: AMZN), Google Cloud Platform (NASDAQ: GOOG), Azure (NASDAQ: MSFT) and IBM (NYSE: IBM)
- H2 2021 outlook
Questions
1.
What key trends should investors be monitoring across Snowflake’s broader operating environment?
2.
How would you characterise Snowflake’s demand environment? You discussed the overall digital shift, and the bigger cloud migration from some of those last holdouts on the enterprise side. How do you expect demand to trend as we move further into a recovery scenario amid these ongoing trends?
3.
Snowflake recently raised its market opportunity to a USD 90bn TAM for its CDP [Cloud Data Platform] solutions. How should we consider the company’s penetration and remaining runway in that market?
4.
Snowflake’s initial TAM assumption was USD 81bn at the IPO in September 2020, by comparison. How sustainable is the growth of the company’s market opportunity?
5.
How should we frame Snowflake’s competition domestically and internationally? Who else would you pinpoint as its major competitors, having highlighted Databricks, Redshift and Synapse?
6.
Should we consider Teradata, Confluent or Cloudera in the same cohort of direct competitors, or are they a bit more on the outskirts of Snowflake’s overall offering?
7.
What’s the likelihood of the cloud providers making a stronger push into Snowflake’s market? You already highlighted Redshift, Synapse and BigQuery, subsidiaries of Amazon, Microsoft and Google, respectively. Could you break down that overall coopetition dynamic?
8.
What do you think is the longer-term likelihood of the cloud providers making a stronger push on their subsidiaries to compete more with Snowflake, and perhaps minimising the partnership component?
9.
Are there any up-and-coming competitors or international players from China or Europe to monitor?
10.
Could you share a breakdown of market share and how it has trended? Which players have been winning or losing market share in this ecosystem?
11.
Who would you pinpoint as Snowflake’s main longer-term competitive threat? Would it be competing vendors such as Databricks or Redshift? Is it the broader cloud providers, or AI-type companies such as C3 or Palantir who might make a play into Snowflake’s market?
12.
Could you elaborate on Snowflake’s product differentiation? What is underpinning the strength of the company’s competitive moat? How do some of the multi-cloud uses and workloads play into this?
13.
Over what timeline do you think Azure DW [Data Warehouse] and Redshift will need to rethink or rebuild some of their architecture, and how does that position Snowflake?
14.
Snowflake’s investor day earlier in June highlighted its innovation pillars – connected industries, global governance, platform optimisation, data permeability and the Powered by Snowflake concept. Which of these would you highlight as the key component of Snowflake’s growth story and why?
15.
To confirm, we should expect Powered by Snowflake to be a fairly big driver of stickiness in the medium-to long term?
16.
Where else do you think Snowflake should invest for growth across the tech stack? Which areas will be key over the medium-to-long term?
17.
What weak points or potential areas of improvement would you pinpoint within Snowflake’s product offering? How are these being addressed, and how might this inform the company’s areas of investment?
18.
You noted customers’ adaptation to the pay-as-you-use model as a potential weakness for Snowflake. Do you think it will address this through upfront customer conversations, or might it entail a strategic shift?
19.
Could you share a high-level overview of Snowflake’s thought process for building vs partnering?
20.
Snowflake’s time to value – from the start date, to the consumption rate the company is contracted for – is currently seven months. Management are stressing the importance of shrinking this for customers, particularly through leveraging the big Deloitte partnership. What would you highlight as a reasonable lower bound for time to value, and how long might it take Snowflake to reach that?
21.
Could you break down Snowflake’s go-to-market strategy? How would describe its customer targeting for Fortune 500 and other segments, and which customer buckets do you think have the best long-term value?
22.
How competitive is the overall sales process? Where might a customer opt for Snowflake over Databricks or vice versa?
23.
Snowflake posted a 110% YoY increase in product revenues for Q1 FY22, with 200% YoY expansion in EMEA and 300% YoY in APAC. What’s your confidence in the company hitting its expected FY22 product revenues, with anticipated growth of around 84-87% YoY? What are you mainly attributing this to?
24.
Management said much of Snowflake’s performance has been backed by growth within the media and telecom, tech, financial services and healthcare verticals. How do you think the company can drive growth in other industry verticals, domestically and internationally? How should we frame that penetration story?
25.
Snowflake’s net revenue retention was 168% in Q1 FY22, and the company grew to 104 customers with over USD 1m in trailing 12-month product revenue, relative to 77 in Q4 FY21. Where do you think customers are adding on value? Is it just increased consumption, or are there other factors to consider?
26.
How much more valuable is it for Snowflake to grow existing accounts through upsell, cross-sell and increased consumption, relative to just targeting net-new logo wins?
27.
Snowflake’s investor day presentation also highlighted the long-term path to USD 10bn in product revenues, getting to 10% operating income by FY29. How should we consider this road to massive growth and profitability? What factors into this bull-case scenario?
28.
What will factor into Snowflake’s overall top-line growth? Will this be larger volume, deeper penetration with existing accounts or geographical expansion?
29.
What’s your worst-case scenario for Snowflake, having highlighted the best-case for its 7-8-year plan?
30.
What’s your outlook on longer-term industry consolidation? How might those dynamics evolve?
31.
Are there any summarising comments you’d like to share relating to Snowflake or the broader industry?
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