Been on a downtrend since late Feb 2024 - Snowflake (SNOW). Nibbled on some yesterday (06/04) and the name continues to slide.
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Itâs part of the SaaS group and the whole group has been selling off. It doesnât help Snow to have a high valuation with slowing growth.
Andy
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They might be included in SaaS, but when I hear SNOW I think Data and given the AI surge, I think Data (and analytics) will also grow
I agree Hohum and it could be just that it is to early for them right now? The infrastructure is seeing really strong growth right now but in a year I think Snow will do good.
Andy
07/25/24
Tech sector getting too choppy recently, Closed out my SNOW position on todayâs bounce. But keeping an eye on SNOW
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SNOW, MDB, PAYC are some names I am waiting patiently.
Here is a name, which is hitting all time high. Buying back shares consistently, reasonably valued, no debt, solid balance sheet, the company has a solid position in firewall and network security solutions, long-time CEO is moving to Chairman and a NEW CEO (who is a VC) is expected be a catalyst.
Lastly look at the break out from the solid base. The bottoming process takes time, turnaround takes time⌠why not buy the strength?
ServiceNow (Now) had an interesting Earnings Call. From the CEO.
** William McDermott
Okay. Well, Iâll start off and then Gina can talk about our hiring strategy, and thank you for your kind remarks, Mark. There was 0 impact on customer systems from CrowdStrike outage on July â18 as it relates to ServiceNow. There was zero impact to data integrity financial systems and the integrity of the operations of the companies as it relates to ServiceNow. And thanks to our CMDB, I think youâre onto a very good marketing and sales idea and the service mapping of the CMDB we had instant visibility into which systems, which business services and infrastructure were impacted in our customersâ environment. And our automated workflows sped up the remediation and the employees were kept up to date via our ServiceNow portal. So I think this could actually lead to more sales opportunities once non-ServiceNow customers see whatâs possible with a platform like this.**
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The very definition of CMDB is configuration management database⌠so you are going to have the configuration details. it is not just ServiceNow, but any CMDB will track this along with any software installed or the ports opened, etc.
This is not going to drive any sales⌠People are switching to Service now from another CMDBâŚ
PS: Service Now is an example of how old enterprise software failed to understand the cloud or afraid of cannibalization. HPE had a product called service manager, the team that was running the product left HPE and started Service Now as a SaaS and a great hit. NOW market cap $150 B and HPE market cap $26 B. HPE could have developed the âServiceNowâ offering at < $500 M cost, probably even less as they could have moved all the developers from service manager into this.
It breaks my heart to even think about this.
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What I found interesting King is that none of their customers had problems with Crowdstrike. That has to make companies look at them more closely. I have no doubt that other companies are doing the same thing but to actually call that out should (hopefully) help them. Their RPO picked up this quarter to an eight year high.
This is simply not true. I know the airlines affected use both Crowdstrike for their end-point protection and Servicenow for CMDB.
Typically customers donât use Servicenow for patching, they use separate software for central patching. Even if you use servicenow, there is nothing that could prevent customers from being impacted, only you have an ability to rollback, which is available in any patch management software, and nothing unique or special about ServiceNow.
Some like American recovered quickly, while others like Delta endured a longer outage. The primary reason is Deltaâs issue is cascading failure, i.e., Crowdstrike issue exposed other issues in their systems like their crew reassigning software failure etc.
Separately, many American enterprises cut cost severely and have resiliency issues. Deltaâs issue goes beyond Crowdstrike. Most of the federal agencies were made toothless by congress. Many critical services in US are vulnerable.
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That is what Servicenow said on their CC. I posted it up thread. I looked up Delta and they use their own software for running their business which is called Deltamatic. They did use Now for their covid response and financial assistance applications.
Maybe Now is only counting companies that use their Software to run their business?
From the earnings call,
And the service mapping of the CMDB we had instant visibility into which systems, which business services and infrastructure were impacted in our customersâ environment. And our automated workflows sped up the remediation and the employees were kept up to date via our ServiceNow portal.
So the way I read it is âServicenow says our customers are not impacted because Servicenow is not impacted by Crowdstrikeâ.
I am familiar with Servicenow patching management, that would not have prevented what happened. What they could do is, servicenow maintains the patching details of the servers (provided they are live connected, which many are not), so it is easy to find the impacted system and roll back quickly.
Running a business for airlines means ticketing system, loyalty maintenance, spare parts maintenance, crew assignment, etc. None of these services are provided by Servicenow, I can go on and on. Servicenow, is just a service platform, you donât run your business on that.
I am confused King you are the one who brought Airlines into it and now you are saying Now has nothing to do with them.
I would say that would be a big help in correcting the problem, wouldnât you?
Airlines outage are widely understood, hence I used them as an example. Servicenow, trying to spin it positively, but what is true for servicenow is true for any CMDB system that is integrated with patching software.
Of course, $NOW will try to spin it to their advantage.
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Ok so how do you see the increase of their RPO?
Thanks
I donât own or follow this name⌠in any case here are my thoughts.
RPO, remaining performance obligation, increase is a factor increasing contract value and winning new business. They are executing at a very high level, and it is reflecting in their results. From an initial contact to contract signing it takes anywhere between 4 to 8 months. Your RPO will not be impacted by Crowdstrike issue. I think some of their success is due to gen AI story/ value prop they are proposing. If your SKU is genAI enabled they charge you slightly higher 
and that also to a some level explains the increase in contract value, RPO or some customers renewing early.
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Ok that makes sense. That is what they are claiming also, that they are winning at AI. I donât own it either but AI is worth at least a few dollars. 
The below post is not part of this thread, whoops!
My business uses SNOW product.
They are far away from GEN AI results as an IN HOUSE service.
However, SNOW is an ENABLER for other AI use. But this is a long, slow burn.
Having said that, the largest SNOW users will not gain value from PUBLIC AI (general or special/topical AI), but SNOW supports PRIVATE/Proprietary AI on internal company data.
SNOW is not a primary AI wave beneficiary. From my seat, they are on the 2nd wave for most commercial users.
This is a much longer development cycle which will not be adding significant value to SNOWs bottom line until their customers develop this function.
SNOW can pick up some technical services fee revenue from this and is VERY good at bringing 3rd party vendors into the picture to codevelop functionality. This will be minimally incremental to bottom line results.
Several things need to happen for SNOW to benefit from Private AI enablement:
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Companies need to clean up their data. In many cases, there is a very complex picture here with acquisitions and bought(3rd party) solutions playing together with low coherence and no presence in SNOW platforms. Continuity is not widespread and answers to the same question require significant manual intervention and process audits to complete. As a result, businesses trying to mature into this capability will face challenges. Any productive proprietary AI must be trained on good, internal, private datasets with clean public data enhancements.
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AI Reproducibility and Repeatability. For business (and critical business systems) that intend to release AI products for their internal teams, this is non negotiable. Currently available public models have far too much resultant errors, omissions and hallucinations within their responses to any prompt. Testing and development will be extensive before any competent team releases this to make million dollar decisions.
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Public/private data training capability. SNOW can really assist here with the shear volume of public data present for general use. Unfortunately, most company data privacy and internal data control mandates divide this data and place excessive admin/security frictions on this process. Businesses must reconsider how and where they will mix their data with public data (internally) for these use cases.
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Internal/trusted partner codevelopment. Data owners (SNOW customers) need to develop and staff teams in codevelopment with SNOW and/or 3rd party vendors. These people are expensive and difficult to justify for âdevelopmentâ purposes. Managers either do not appreciate the requirements for these programs as table stakes or cannot prioritize these efforts over practical/immediate enhancements. This means that a successful team may have to go rogue for a significant period in time to gain AI function as laid out in #1, #2 and #3 above. That is, unless internal âskunkworksâ cultural tenets are present with adequate budgets to support.
Hereâs a graphic from 2021 that still holds true. ( I canât believe I have to say this, but real business is not reflected in the news cycle)
AI Projects Fail All Too Often. Successful Ones Share a Common Secret - Gestalt IT
SNOW will not see significant revenue response until the above factors are met at a significant fraction of their largest customers.
I expect SNOW stock to be somewhat channel bound until they start showing movement at scale on this front. 2026 seems too soon, here.
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We are talking about service now $NOW, $SNOW is snowflakes, the data company⌠I know the ticker and names are somewhat confusing.
Are you talking about $NOW or $SNOW?
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