While Frank Slootman’s decision to step down as CEO of Snowflake slashed $20 billion off Snowflake’s market cap overnight, it would be rash, misguided, and downright foolish for anyone to think he or she knows better than Slootman about what’s best for the high-flying data-cloud company.
After all, Slootman owns about 10.6 million shares of Snowflake stock, which even after the recent $20-billion haircut are still worth somewhere in the range of $2 billion. I’d call that a very strong personal vested interest.
On top of that, Slootman will continue as chairman of the Snowflake board, and that’s a professional vested interest that the unimpeachable Slootman no doubt takes as seriously as the personal one.
Plus, following Snowflake’s acquisition of new CEO Sridar Ramaswamy’s Neeva startup in May 2023, Slootman was able to spend several months closely observing and evaluating Ramaswamy in the unsparing crucible of Snowflake’s executive suite. And as Slootman described on Snowflake’s fiscal-Q4 earnings call last week, Ramaswamy didn’t just participate in but immediately began leading an incredibly strategic effort — the company’s AI strategy — that will ultimately determine whether Snowflake reaches its revenue goal of $10 billion or flames out along the way.
“Since joining us, Sridhar has been leading Snowflake’s AI strategies, bringing new products and features to market at an incredible pace,” Slootman said on the call.
He led the launch of Snowflake Cortex, the managed service that makes AI simple and secure.
Before that, Slootman said, Ramaswamy led Google’s wildly successful advertising products, growing Google AdWords and its overall advertising business from $1.5 billion to more than $100 billion. So clearly, Ramaswamy knows a thing or two about AI, data, and scale.
“With the onslaught of generative AI, Snowflake needs a hard-driving technologist to navigate the challenges the new world represents,” Slootman said.
During the earnings call, I was surprised that only one financial analyst asked Slootman very specifically about the hiring of Ramaswamy. And in Slootman’s typical straightforward and unflinchingly logical fashion, Slootman expanded on why he and the board have thrown their full commitment and confidence behind Ramaswamy.
Emphasizing that the board did not address the CEO succession as a “time-based process,” Slootman said, “It’s not a timing issue. Instead, it’s, ‘Do we have the person that we think is going to be an incredible win for the company going forward?’ You can’t dictate that or mandate that — that’s just based on opportunities that will or will not present themselves,” Slootman said.
“So, we feel incredibly fortunate that we crossed paths with Sridhar through the acquisition of Neeva.”
Slootman then complemented that board-level fiduciary perspective with a personal touch — and remember, Slootman owns more than 10 million shares of Snowflake stock.
“If I think of myself not just as the former CEO of Snowflake but also as an individual shareholder in Snowflake, this is the move I want to make at this time. And I cannot tell you — as an investor — how strongly we feel about succession.
“So this is not just about changing the guard — this is also about positioning the company really, really well for the challenges that are coming at us.”
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Final Thought
Those challenges — in spite of the enormous success Snowflake has had in pioneering the data-cloud category and winning the hearts, minds, and wallets of sophisticated technology buyers and their CEOs — are numerous: bigger and better-known competitors, an incredibly fast-changing and fluid AI landscape, the race to scale globally to support large customers, the battle for world-class talent and more.
But Ramaswamy appears to have the chops to handle all that. What he does not have, though, is something Ramaswamy will never have: He’s not Frank Slootman.
And the marketplace that has fused Snowflake’s very identity with Slootman’s genius-level vision and managerial prowess will have a hard time getting over that.
That is of course out of Ramaswamy’s control. All he can do is demonstrate that Slootman was right in picking him to lead Snowflake through its next set of challenges — and the best way to do that is by winning and expanding the confidence of customers in Snowflake’s ability to be their primary data partner for the AI Revolution.
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