Snowflake To Buy Observe: 5 Things To Know

Snowflake CEO Sridhar Ramaswamy tells CRN that buying Observe presents ‘a lot of opportunity for partners and especially in the world of agents.’

Snowflake’s plan to acquire Observe will take the vendor’s capabilities in observability and agentic artificial intelligence to another level, opening up new opportunities for its growing ecosystem of partners.

The Bozeman, Mont.-based data cloud vendor has seen its partner ecosystem surpass 12,600 total partners worldwide, about 30 percent growth year over year and way above the 600 partners it had in 2022, as organizations in a variety of industries seek solution providers to clean their data, establish improved governance norms for AI use cases and improve their business.

For Snowflake partners like BlueCloud—No. 484 on CRN’s 2025 Solution Provider 500—consolidating data foundations has delivered a lot of recent work, BlueCloud CEO Jim Martindale told CRN in an interview.

“Many customers are still sprawled across many tools,” Martindale said. These customers “have visions of leveraging AI in a greater capacity and lowering their consumption costs,” which opens an opportunity to consolidate data onto Snowflake as a single source of truth.

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Snowflake To Buy Observe

Snowflake CEO Sridhar Ramaswamy told CRN in an interview that buying Observe presents “a lot of opportunity for partners and especially in the world of agents.”

Ramaswamy has been outspoken on the vendor’s recent focus on partners, even telling investors on the company’s December earnings call that “as we deepen our strategic partnerships with the world’s leading cloud service providers, AI model developers, SaaS providers and global system integrators, we’re unlocking new levels of performance, accessibility and AI-driven insight for our customers, while expanding the value and impact of the Snowflake platform across industry.”

Although Snowflake did not officially disclose a closing date or purchase price for Observe, The Information reported that the deal is valued at around $1 billion.

Read on for what Snowflake’s potential acquisition of Observe means for the channel.

Observe To Grow Total Addressable Market For Snowflake, Partners

Ramaswamy told CRN that the Observe deal uniquely positions Snowflake to go after the observability market.

“Observability is a data problem,” Ramaswamy said. “Massive amounts of data, structured data, unstructured data. It’s been a very difficult place. And our core thesis is that a data platform that specializes in storage, in efficient access of data, can be a great foundation for an observability platform.”

The Observe purchase aligns with major data platform vendors continuing to converge across data warehousing, observability, customer data platform and security information and event management, KeyBanc said in a report Thursday. The investment firm praised the deal for moving Snowflake up the stack to data-intensive applications.

Moving up the stack expands Snowflake’s total addressable market and improves customer TCO by consolidating IT and observability data tools with business data tools, according to the firm.

More Agentic Capabilities

Ramaswamy said buying Observe presents “a lot of opportunity for partners and especially in the world of agents.”

Toward the end of 2025, Observe rolled out new AI agents, AI SRE for site reliability engineering and o11y.ai. AI SRE autonomously applies context, pinpoints root causes and suggests fixes. O11y.ai allows developers to generate code instrumentation, debug and ask questions about apps, according to Observe.

The combined companies can also establish an open standard observability architecture based on Apache Iceberg and OpenTelemetry, according to Snowflake. This will allow customers to manage massive telemetry volumes with economical object storage, elastic compute and interoperable standards.

More M&A For Snowflake?

Asked by CRN if the Observe acquisition is an indication of more purchases by Snowflake in the future, Ramaswamy said that “we want to keep growing, but at the kind of numbers that we are in, we have to be selected about who we acquire.”

The CEO said to expect more organic innovation from Snowflake in 2026, but he has “definitely lots of interest in both the tuck-ins and the meaningfully large acquisitions, like Observe."

Snowflake also continues to integrate its product suite with its most recent acquisition, Crunchy Data, purchased last year for about $164.5 million.

Ramaswamy told CRN to expect Snowflake Postgres—a fully managed offering now in public preview and built upon technology from Crunchy Data—to become generally available soon.

The vendor’s other recently announced acquisition plans include Datometry from Dell Capital to aid with migrations from legacy data warehouses and Select Star for improved data catalog capabilities.

Snowflake’s moves have extended to channel companies scooping up other businesses with strong Snowflake partnerships and practices. DoiT—No. 36 on CRN’s 2025 Solution Provider 500—last week unveiled its acquisition of Select, a developer of optimization tools for the Snowflake platform, in a move to help clients gain visibility and control over their data platform spending.

Last year saw IBM buy global data, artificial intelligence and Snowflake-focused consultancy startup Hakkoda to boost the data transformation services portfolio of the tech giant’s IBM Consulting division.

Snowflake has also proven an influential investor in the data market, with its venture arm in December revealing an equity investment in Ataccama, joining AT&T Ventures in a $22.5 million investment in RelationalAI and leading an equity financing round in AtScale.

Snowflake also participated in Observe’s $156 million Series C funding round closed back in August.

Close Relationship, Fast Integration

Snowflake and Observe already have a close partnership, making an easy integration process more likely, Ramaswamy told CRN.

Observe is built on Snowflake and has native integrations with Secure Data Sharing and other Snowflake products and services, according to Observe. The company can ingest petabytes of data across billions of events and execute 150 million queries a day.

Joint customers use Observe to monitor Snowflake Data Cloud health and query execution plus debugging and troubleshooting Snowpark Container Services (SPCS) applications quickly with comprehensive telemetry signals.

Both companies have some shared history, having been incubated by Sutter Hill Ventures. Observe CEO Jeremy Burton serves on Snowflake’s board. Observe has been a Snowflake customer since 2018.

KeyBanc calculated that Observe could present a $22 million annual revenue headwind for Snowflake because of a possible contract Observe renewed with Snowflake in July for $67.5 million with a three-year term, according to the investment firm’s report.

Growing Competition In Observability, Data Platforms

Observe, founded in 2017, positions itself as a key option for the cloud era. Observe separates compute from storage, stores all telemetry in a unified data lake and models relationships across datasets up front for more efficient ingestion, long-term retention without rehydration, and consistent performance for queries and correlations at scale.

Observe also touts its subscription-based pricing model based on ingest. Observe’s pricing is based on a customer’s committed volume of uncompressed telemetry data ingested. Costs range from 49 cents per gibibyte (GiB) for logs and 59 cents per GiB for traces. Observe also doesn’t charge overages when workloads spike.

Snowflake’s move follows an explosion of mergers and acquisitions involving observability tools and platforms over the past year as technology vendors look to add capabilities to improve security, performance monitoring and other benefits. Palo Alto Networks is at work closing its $3.35 billion deal for Chronosphere. And 2025 saw F5 buy MantisNet, LogicMonitor buy Catchpoint and Datadog buy Metaplane in similar deals to Snowflake-Observe.