Why is Snowflake so expensive • Hacker News Board

Re: Why is Snowflake so expensive

#51

Post by dominotw » Mon, Aug 22, 2022, 4:07 PM UTC

PaulWaldman wrote: post #41

beoberha wrote: post #32

I disagree with the assertion that Snowflake has no incentive to improve performance. While I don’t work for Snowflake, I work for a competitor and we’re constantly looking to improve performance to make customers happy. For the exact reason that the article claims Snowflake wouldn’t innovate, I’d assert that they would. If they are expensive and slow, and a competitor is faster and cheaper, eventually they will see…

Chrun for these services take a long time. They are "sticky" and have the baggage of enterprise agreements. With the switching costs never being zero, if SLAs are being met, it's exceedingly difficult to switch vendors. Alternatively there is a faster impact on new sign-ups when falling behind competitors on costs and benchmarks.

Their stock price is pegged at new customer acquisition. They signed up over 6k new customers last qtr. This is one of their top stats that they present to investors.

Re: Why is Snowflake so expensive

#52

Post by polskibus » Mon, Aug 22, 2022, 4:07 PM UTC

Aulig wrote: post #28

cs702 wrote: post #7

Great article. On the surface, it's about Snowflake. At a deeper level, the article is about the perverse incentives motivating SaaS businesses to do seemingly dumb, inefficient things and avoid seemingly obvious optimizations by default. Many SaaS businesses are perfectly happy to let customers shoot themselves in the foot if it generates more revenue. The BigQuery example (presently, by default, `select * from tabl…

It feels like these companies haven't found the right value metric to price along. Ideally it should align with the value the customer receives.

Only competition can enforce this. The article ideally demonstrates the problems with monopolies and vendor lock-in.

Re: Why is Snowflake so expensive

#53

Post by soheil » Mon, Aug 22, 2022, 4:08 PM UTC

florbo wrote: post #45

soheil wrote: post #21

Earlier quoted context omitted.

If that lowers the barrier to entry without having expert level knowledge to know what a full table scan even means why not? Instead of hiring a dba maybe you could hire an intern instead and happily eat the cost of Snowflake.

It doesn't lower barriers to entry, it's contrary to logical expectations for someone unfamiliar with how BQ works. If the query is limited to 10 results you wouldn't expect it to scan all 2 trillion of your records. Granted there are numerous warnings in the GUI for these types of things but make this mistake in Python and you're none the wiser.

Wait are you saying the BQ db engine is not following logical expectations? You do realize a "limit" clause doesn't prevent a full table scan in all cases, right?

Re: Why is Snowflake so expensive

#54

Post by SnowHill9902 » Mon, Aug 22, 2022, 4:09 PM UTC

mritchie712 wrote: post #34

I predict[0] we'll see more people choosing Clickhouse over Snowflake in the next 5 years. Clickhouse will get reasonably feature compatible with Snowflake and give people a better escape hatch if they want to self-host their data stack. Clickhouse, Inc is building a cloud product that abstracts away the complexity and there's already companies like Altinity that will spin up a cluster for you in minutes. 0 - https:/…

Clickhouse is incredible software. It only feels a little foreign when coming from Postgres (e.g. some CamelCase terms).

Re: Why is Snowflake so expensive

#55

Post by YouWhy » Mon, Aug 22, 2022, 4:09 PM UTC

I often analyze tools as reduction from the space of problems × resources to the space of outcomes.

Let's consider Snowflake in this paradigm

- Problems: analytics on data that is not laid out in a way that's directly accessible for analysts.

- Resources: SQL analysts, few or no competent data engineers, spare cash

- Outcomes: run analytics at an industrial scale without requiring competent engineers or DevOps.

Since Snowflake's optimal client gets very easily locked in, it follows up that saving said client's money is not something even the client would care about

Re: Why is Snowflake so expensive

#56

Post by tootie » Mon, Aug 22, 2022, 4:09 PM UTC

KingOfCoders wrote: post #36

I have no Snowflake experience, but some limited BigQuery experience. And it's very easy for a small company to get to $100k/year bills without massive data.

Anytime your cloud spend with a single vendor starts to get out of hand, you just call and negotiate. If you make a multi-year commitment, they'll apply a substantial discount. Also, $100k/yr is still cheap compared to the cost of developers. Not just in terms of actual price tag, but risk management because a SaaS won't quit for a better offer.

Re: Why is Snowflake so expensive

#57

Post by cs702 » Mon, Aug 22, 2022, 4:10 PM UTC

PaulWaldman wrote: post #41

beoberha wrote: post #32

I disagree with the assertion that Snowflake has no incentive to improve performance. While I don’t work for Snowflake, I work for a competitor and we’re constantly looking to improve performance to make customers happy. For the exact reason that the article claims Snowflake wouldn’t innovate, I’d assert that they would. If they are expensive and slow, and a competitor is faster and cheaper, eventually they will see…

Chrun for these services take a long time. They are "sticky" and have the baggage of enterprise agreements. With the switching costs never being zero, if SLAs are being met, it's exceedingly difficult to switch vendors. Alternatively there is a faster impact on new sign-ups when falling behind competitors on costs and benchmarks.

Exactly. For enterprise customers in particular, replacing a SaaS tool that's deeply intertwined with many internal systems is about as easy and convenient as it is for a homeowner to rip out his/her home's existing HVAC system to replace it with a newer, more efficient one. No one ever wants to do that -- unless there's absolutely no other choice.

Re: Why is Snowflake so expensive

#58

Post by carlineng » Mon, Aug 22, 2022, 4:12 PM UTC

[Disclaimer: former Snowflake employee]

Snowflake is not expensive because of perverse incentives, which is the primary claim of the article. It is expensive because it is a highly differentiated and very sticky product.

As others have mentioned, competition is the ultimate incentive to work on performance. Every dollar of Snowflake revenue is a dollar of revenue that Amazon, Google, Microsoft and Databricks are fighting for.

Re: Why is Snowflake so expensive

#59

Post by jmacd » Mon, Aug 22, 2022, 4:14 PM UTC

Retrospectively, this is very similar to how most SaaS behaved when per user per month billing was first introduced. There were almost never any actual limits on the number of users you could add to the software, but you purchased a license for a certain number. Occasionally your account would be audited and you would be billed of the overage. It was always a significant penalty. The same was true for CPU based licenses for things like IIS, SQL Service, Oracle, etc.

Re: Why is Snowflake so expensive

#60

Post by cedricd » Mon, Aug 22, 2022, 4:14 PM UTC

I'm glad the author also points out how customer (mis)use can blow up data warehouse costs too. No matter how efficient Snowflake could get, using the warehouse too much or with unnecessary queries will ultimately have a larger impact.

The trend in the data space currently is for usage to increase -- as more companies adopt dbt they're running more and more prebuilt (materialized views) queries on a scheduled basis, rather than on demand. This is overall a good thing in that data is becoming easier to manage and use, but it does come at an increase in warehousing costs.

I think eventually the pendulum will swing back to tools that help optimize warehouse usage, as long as they allow for the same increase in productivity as dbt (disclosure - I work for one such company)