Snowflake said in its earnings release on Wednes

Interesting and overlooked:

“Snowflake said in its earnings release on Wednesday that it no longer has a corporate headquarters”

“The company designated Bozeman, Montana, as its principal executive office because it’s required by the SEC to have one and that’s where CEO Frank Slootman and CFO Mike Scarpelli are based.”

https://www.cnbc.com/2021/05/26/snowflake-moves-executive-of…

So Snowflake is some form of virtual company now.

Could it have a negative effect on the company culture and as a consequence on the performance?

6 Likes

I think Wall Street analysts are seeing and thinking the opposite, check out this recap of VMWare as an example:

“Preliminary first-quarter results include expected 9.5% year-over-year revenue growth, adjusted operating margin of 30.8%, and adjusted EPS of $1.76. All of these results topped our expectations, spurred by subscriptions and software as a service and license having an expected 12.6% annual sales growth rate and services remaining strong at an implied 7% year-over-year revenue growth rate. With sparse details and no guidance, we suspect that broad-based demand from cloud offerings and organizations reordering on-premises licenses alongside lower travel and entertainment costs drove the robust results.”

Greater growth, lower costs => results topping expectations. Within the “geek-industry”, at least, travel & entertainment is looking more like an employee perk than a valid selling tool…

6 Likes

“Snowflake said in its earnings release on Wednesday that it no longer has a corporate headquarters”

“The company designated Bozeman, Montana, as its principal executive office because it’s required by the SEC to have one and that’s where CEO Frank Slootman and CFO Mike Scarpelli are based.”

https://www.cnbc.com/2021/05/26/snowflake-moves-executive-of…

So Snowflake is some form of virtual company now.

Could it have a negative effect on the company culture and as a consequence on the performance?

I don’t want to be snarky in response to this, but Snowflake is a modern “cloud first” tech company. Arguably it has never had a “corporate headquarters” in the modern sense. Arguably there isn’t really such a thing as a “corporate headquarters” at all any more, at least not for multinationals. I mean what’s a “virtual company”. Everybody has always had remote workers. Is Berkshire Hathaway “virtual” because only a literal handful of people work in their headquarters? (And instead at the subsidiaries.)

What’s my evidence the corporate headquarters are relatively meaningless in today’s world?

  • Halliburton moved its “corporate headquarters” to Dubai, in a what was pretty much a flat-out tax avoidance scheme. What consequences did it have on culture and performance? As far as I can tell, nothing.
  • Arguably most multinationals rely on a very diverse geographical deployment anyway. Both for sales, but also for manufacturing, IT/BP outsourcing, and regulatory reasons.
  • As a personal anecdote, in 2019 I started having extreme difficulty getting customers to have meetings in person. There just was too large a percentage either working remotely or regularly working from home. Could you get a meeting with an executive in person? Sure. Sometimes you could even get a “team”, but remote participation was almost always a given if you had more than a handful. I’m very curious what 2022 will hold: but I expect that a lot of companies will continue to have most external meetings virtually. I literally had a CIO say to me “Vendors have always been plague ridden disease vectors anyway. Why should I allow them into my office ever again. They can meet us via Zoom.” I’m not convinced that’s a majority opinion, but I still find it hilarious.

What’s my evidence that this is especially true in tech?

  • In my last employer the “corporate headquarters” was completely symbolic. Only one of the C-suite worked there. When I left, no EVP lived in the same city as any other EVP. If I recall correctly, there many not have even been a VP in the same city as any other VP. They very explicitly hired the best people regardless of location.
  • My current employer definitely has a non-symbolic “corporate headquarters”. But they’ve always hired globally, especially in software engineering. While there certainly will be a lot of employees that will be excited to get back into the office (very different than my last company) they have definitely increased the percentage of jobs that will be “work from home forever”.
  • I’ve been seeing explosive growth in non-traditional locations for tech people. For example, Arkansas has been actively recruiting tech people to work there. One of the best engineers I know works there. Why? Because he can. He grew up there and moved back when employers realized that it didn’t matter where he wrote code since he worked from home most of the time anyway. I’m finding that this is true in the general case: the best engineers generally do not tolerate bullhit and that includes bullhit commutes.
  • There have been several high tech companies that have publicly announced “Work from Home Forever” programs. Twitter and Square most notably, but I’ve been hearing similar comments from a lot of Silicon Valley. Why pay Silicon Valley prices when they’ve been finding people more productive at home anyway.
  • Two of my customers, both big F500 “stodgy” companies have announced internally that they no longer limit recruiting to their physical locations. They are phrasing/running it a bit differently than Twitter and Square, but they’ve essentially gone “work from home forever” as well. (One big difference is that for them it’s not in all roles: only IT.)

Supposedly, there have been have been several studies that there have been some pretty huge gains in productivity from the COVID-19 induced work from home.

Again, I don’t mean to be snarky. But I look at it the absolutely opposite as you. I ask how will this change accelerate Snowflake? What new people will they be able to attract and hire? They are a cloud company. They are by their very nature very virtual and this only accelerates their ability to take advantage of cloud based business practices.

–CH

26 Likes

Thank you for your reply.

What I find questionable is the issue of community and team work.

Let’s take the extreme case: Every single employee works somewhere in the world from home for a far away company, from which you only give your monthly payroll.

Doesn’t something like a sense of community get lost there?

I have the impression that this isolation also has its downsides.