I have wanted to bring this to the attention of the board to determine if I am over reacting, that this is a cause for concern for SNOW’s future TAM. I see Salesforce (CRM) as a threat to their moat.
Dreamforce is Salesforce’s largest conference and it takes place in September. They made a big splash with an announcement of Genie, more info here → What is Salesforce Genie? | Salesforce and here is the demo → Dreamforce 2022 Main Keynote | Watch Dreamforce 2022 for FREE on Salesforce+ - YouTube , go to 51:45 in the video which gives you the build up and then demonstration, the demonstration starts at 56:40.
Genie appears to be Salesforce’s interpretation of Snowflake’s architecture (i.e. it is the same thing). The value proposition is that it will Harmonizes your data, using ML and Fuzzy Logic to create joins in data with a high degree of accuracy to bring together disparate data tables and make that data available in real time.
Salesforce contains a lot of customer data, it is stored in Sales Cloud, Service Cloud, Marketing Cloud, Industry Clouds and others. The point of complexity for most Salesforce customers is integrating all of this data. Genie vastly simplifies this, which means that there is low friction to sell this into their customers.
Salesforce has a huge market presence, with low selling friction to stand up Genie. It seems that they can then begin to capture compute cycles that would have been revenue for SNOW and has the potential to move into SNOW’s space and capture more non-Salesforce data replacing SNOW entirely.
Other competitors: There are other competitors, most notable is Databricks. I am investigating a couple of others that I think could be competitive but have not verified them and will bring them to the boards attention in the future.
Summary: This isn’t material right now, but I see a full court press by Salesforce to push Genie into their customer base this coming year.
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If you see this as a cause for concern or a replacement, I do believe that’s an over-reaction. Salesforce and Snowflake announced a real-time data sharing partnership a few days prior to this announcement:
https://www.salesforce.com/news/stories/salesforce-cdp-snowflake-partnership/
The new data sharing capabilities will allow Salesforce Customer Data Platform (CDP) customers to build segments and surface insights on data from Snowflake as if it lived natively in the CDP. It also works in reverse, enabling a data analyst in Snowflake to write queries that join native Snowflake data with Salesforce Customer Data Platform data, without having to copy or move the data to Snowflake first.
https://www.snowflake.com/news/salesforce-and-snowflake-expand-partnership-with-real-time-data-sharing/
The new integrations between Salesforce and Snowflake build on the long, successful partnership with Tableau, Snowflake’s 2022 Business Intelligence Partner of the Year. Tableau and Snowflake are continuing to deepen their strategic partnership to help customers across industries better use data as a critical asset to drive innovation and efficiencies in their business.
And it’s also front and center in their press release about Genie:
https://investor.salesforce.com/press-releases/press-release-details/2022/Salesforce-Announces-Genie---a-New-Data-Platform-Powering-the-Worlds-First-Real-Time-CRM/default.aspx
Strategic partnership innovations expand the power of Genie: Real-time data access and sharing with Snowflake; ‘Bring your own AI’ with Amazon SageMaker; Privacy-safe first-party advertising integrations
(Emphasis mine)
To me, this looks like a win-win scenario. Salesforce can further unleash the power of Snowflake, and as you said, Salesforce contains a lot of customer data.
Edit: Thanks for sharing. With S earnings due I’ve yet to look into this more deeply, but wanted to add some (hopefully) helpful context.
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