Snowflake CEO Sridhar Ramaswamy specifically cited blowout results from its AWS partnership as a huge factor in Q3 RPO growth of 55%, a powerful indicator of strong customer demand that helped send Snowflake’s market cap soaring about 30% last week.
“Our product innovation is fueling alignment with our cloud infrastructure partners,” Ramaswamy said on the earnings call for the period ending Oct. 31 before particularly pinpointing AWS.
“Through our collaboration with AWS, we have booked over $3.9 billion over the past four quarters, an increase of 68% versus the preceding four quarters. Looking at our results in Q3, I can tell you that these shifts are working and enabling us to drive multi-product adoption and further strengthen our position in the market.”
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For a company of Snowflake’s size Q3 product revenue was up 29% to $900 million — that type of partner-powered leverage is stunning and reveals a few key market dynamics:
- More visibility. Snowflake can compete very well when given the right type of opportunities. AWS has thousands of tech companies vying to be its BFF, and only throws its full commitment behind those with the biggest opportunities.
- More value. The power of partnerships is spiking as customers increasingly demand that tech vendors collaborate rather than pushing off all of the complex and expensive integration work to customers.
- More momentum. The four hyperscalers — AWS, Microsoft, Google Cloud, and Oracle — are rapidly becoming hubs of multi-layered alliances that are becoming the strategic point of engagement for big customers.
Look at that booming revenue number from the AWS partnership in the context of Snowflake’s overall RPO results. I realize these are not interlinked numbers, but the comparison is vital in understanding Snowflake’s growth trajectory:
- for Q3, Snowflake’s RPO was up a whopping 55% to $5.7 billion;
- over the past four quarters, the Snowflake-AWS partnership has booked $3.9 billion in customer deals, up an even more-whopping 68% over the previous four quarters.
Later in the call, Ramaswamy was asked about the significance of the AWS partnership in driving powerful bookings growth for Snowflake. In his reply, Ramaswamy not only praised the work AWS has done but also was careful to diplomatically include kind words about fellow hyperscalers Microsoft and — with a bit of a stretch — Google Cloud.
“As you know, we have a great relationship with AWS, but also with Azure,” Ramaswamy said.
“We work together a lot, and there is an excellent relationship at the exec level but also at the field level. It is absolutely the case that, for example, that AWS plus Snowflake is a great solution, as is Azure plus Snowflake.”
And Ramaswamy then, with some admirably optimistic language, looped in the collaboration with Google Cloud as well.
“And I would say we have some let’s call it, like, you know, shoots of grass in our relations with GCP [Google Cloud Platform] in terms of what is possible there. We are working with them to make it happen,” he added before becoming quite bullish on Snowflake’s ongoing momentum with the hyperscalers as a group.
“All of this is in the context of a data-platform industry that is going to be expanding pretty massively over the next 10 years, so everybody sees the opportunity. And then it’s a question of working to line up every team within multi-thousand-person companies to collaborate effectively —and you should definitely expect to see more of that.”
A central component of those partnerships will be interoperability around data, Ramaswamy noted.
“They’re all very excited about getting behind Iceberg — as is much of the industry — because the industry now realizes that this is a true standard that is controlled by no one. Unlike previous formats that were open in name only and controlled by a single company that could arbitrarily change its mind about what was open and what was closed, Iceberg is seen as the format. And I dare say that Iceberg is the VHS, and the old format is the Betamax” he said.
“And we are very happy to see this because it’s great for customers, and it’s great for Snowflake.”
