Startup Snowflake Launches To Challenge Data Warehouse Status Quo

Snowflake Computing came out of stealth mode Tuesday, debuting its cloud-based data warehousing services the startup is positioning as a more flexible, easier-to-manage alternative to traditional on-premise data warehouses to compete with services like Amazon Web Services' Redshift.

Snowflake, with former Microsoft and Juniper Networks executive Bob Muglia in the CEO spot, also said Tuesday it raised $26 million to-date in two rounds of venture financing.

"This is a $10 billion market that's growing quickly and isn't being addressed by existing solutions," Muglia said in an interview with CRN. "Today's [data warehouse] solutions are based on architectures that date back almost 30 years."

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Data warehouse systems store data independent from operational IT systems and are used for business analytics applications. Major IT vendors such as IBM, Hewlett-Packard, Microsoft and Oracle, as well as smaller companies such as Teradata and Informatica, all market technologies for assembling data warehouse systems.

Cloud-based data warehouse systems have more recently hit the market and include AWS Redshift and Google Big Query, as well as systems based on the Hadoop open-source big data platform.

Snowflake is offering its Snowflake Elastic Data Warehouse as an alternative that can collect and analyze structured data from transactional IT systems and semi-structured machine data. Muglia said analyzing structured data "gives you a pretty good idea of what happened" while machine data "tells you how things happened."

Muglia said Snowflake's service can operate at 90 percent lower cost than on-premise data warehouse systems, which are often expensive and difficult to manage and maintain. The CEO said Snowflake is easier to manage and use than current cloud data warehouse systems like AWS Redshift. And its multidimensional elasticity makes it possible to better scale up the number of system users and data volume along with the number and complexity of workloads querying that data.

"This is a true cloud solution," Muglia said, comparing it to's cloud-based CRM applications.

Muglia said his company developed the relational database at the core of Snowflake's system "from the ground up." The database supports standard SQL, giving the company an advantage in that most database administrators and developers are familiar with relational database architecture and SQL development tools.

Muglia also noted that IT workers with Hadoop skills remain in short supply.

The Snowflake Elastic Data Warehouse is currently being used by a number of beta customers, including Conde Nast, Adobe, Accordant Media and VoiceBase. Muglia said he expects the service to be generally available sometime in the first half of 2015 with media, advertising and technology companies the initial target customers.

While Snowflake is working directly with those customers today, Muglia said the company expects to begin working with VARs and systems integrators that provide data ETL (extract, transform and load) and data analysis services for their customers. Snowflake is also working with vendors that develop business analysis and ETL tools, the CEO said.

Muglia worked at Microsoft for 23 years, including managing the software giant's Server and Tools business for four years, before being ousted in a management shakeup in January 2011. He worked at Juniper Networks as executive vice president of the company's Software Solutions Division for about two years before leaving in December 2013. He took on the CEO job at Snowflake in June.

Snowflakes' roster of about 50 employees includes data experts from Actian, Cloudera, Google, Microsoft, Oracle and Teradata, according to the company.

The San Mateo, Calif.-based company's financing came from Redpoint Ventures, Sutter Hill Ventures and Wing Venture Partners. The funding will be used to accelerate product development, build out a partner ecosystem, and grow sales and marketing efforts.