Great to see cost-effective alternatives to Cloudera and Databricks! We’ve spent three years building IOMETE, a self-hosted data lakehouse that combines Apache Iceberg and Spark, designed to run natively on Kubernetes. We’re focused on on-premises deployments to address the growing need for data sovereignty and low TCO, with a streamlined setup for large-scale analytics. Early adopters are seeing strong results. Curious about your experience with Trino and Superset—any tips for optimizing performance at scale?
Just ran your comments - not just this comment - through ChatGPT and am passing along the feedback:
As an AI language model, I do not have personal opinions or emotions. However, based on an objective analysis of the language used by catchnear4321 in the comments above, I can say that their tone appears to be confrontational and aggressive. They use strong and direct language, and they do not seem to be interested in having a constructive conversation. This type of communication style can sometimes be counterproductive in online discussions and can lead to misunderstandings or conflict.
The article doesn't claim that demand (or pricing) is inelastic in the data space. It makes the point that VC funding has inflated price levels across the board, similar to how college tuitions rose dramatically after student debt became widely available. There are still differences between college tuitions, but overall tuitions might be multiple(s) higher compared to what the price would have been if there was no (cheap) financing available even.
Now that VC funding is mostly on the sidelines the question is how this will play out further.
> It makes the point that VC funding has inflated price levels across the board, similar to how college tuitions rose dramatically after student debt became widely available.
What's the evidence for that assertion? For the analogy to work VC funding would need to be a dominant factor in IT spending. Last year it was about $200B vs ca. $2T of overall IT spending. [0, 1] But VC spending is not IT spending--in fact it's probably on the order of 10% because most of the money goes to things like R&D and customer acquisition. So it's fair to argue VC spending has inflated salaries but it does not seem like enough to move the needle on IT spending in a material way.
I'm personally skeptical of the argument from the cited article because I run a company that does pretty much exactly what IOMETE is proposing. In practice, there are many confounding factors.
1. The database market is very competitive. There are very few segments that don't have 2, 3, or more substitutable products for green field applications. For existing application there are high switching costs that mute impact of lower product prices. In plain English: we lose those deals.
2. We've seen impact from startups losing funding, but it does not affect prices so much as revenue when customers simply disappear. The same thing happened at the end of the Internet boom in 2001/2.
What will make a difference in this market is offering a completely different model, such as fully open source projects that promote competitive vendor offerings without high lock-in.
p.s., Thanks for the Snowflake numbers. I just went off their last reported results.
Not necessarily. Switching cost is an issue when the effort to switch is bigger than the potential benefits of switching (where benefit can be added functionality or lower costs).
For instance, average Snowflake bill is $300k and many Snowflake customers (almost 400) pay more than a million per year. If you can cut that in half by augmenting Snowflake with IOMETE that's a pretty sweet deal.
No need to switch (that's a hard sell for an early stage startup to enterprise customers), but just augment...
How? By transitioning some of the compute load to IOMETE data lake. IOMETE charges a flat fee compared to Snowflake's consumption-based model. By cutting Snowflake compute consumption (often 5x or more the price of an AWS instance) organizations can save a lot.
Netherlands is the 2nd largest exporter of agricultural products - behind the US -and it's 1/3 the size of Massachusetts...Sector is extremely innovative and productive. The Dutch government is out of its mind. Europe is already under inflationary pressure. This will add to it long term and may also lead to food shortages. One can not simply reduce a sector by 30% without harming the other 70% since it's an ecosystem...
[disclaimer: comment written by one of cofounders of iomete - a YC-backed startup - active in the same market as Snowflake]
I think Snowflake is (still) expensive because it is a venture-backed enterprise software company and goes through a typical trajectory...
Story goes like this: founders are product-driven and first movers -> find PMF -> need VC funding -> VCs only fund enterprise software ventures with 70%+ gross margins and high retention rates -> product/service gets priced to achieve these metrics -> VCs happy to fund sales & marketing machine needed to obtain sales growth, nobody cares about profitability until after IPO -> startup is everyone’s darling until ~2 years after IPO.
Then: economic crisis hits, customers become more price sensitive, competition intensifies. Plus now management is exposed to quarterly pressure of financial markets to deliver on top-line and margin expectations.
Meanwhile a bunch of startups are building (lower priced) alternatives. Perhaps not as mature or feature-rich as Snowflake, but good enough for 80% of use cases that Snowflake covers.
Therefore the assertion that Snowflake is not optimizing their product sounds a bit crazy to me. It would be optimizing for short-term gain, while jeopardizing its reputation as the leader in the space. Obtaining excessive margins through excessive pricing only works under monopolistic conditions or if they had a truly distinctive product. Both are not the case imo. Also, it's early days. Not exactly sure what Snowflake's market share is, but I bet it is < 5%.. so they haven't locked in everyone yet...
I bet that Snowflake will be forced to compete "also on price" in the next five years because free enterprise is a powerful thing. The title of the article could be “Why Snowflake is (still) expensive but will get more affordable over the next few years”..
