Updates: Snowflake & Databricks - Controlling The MDS And GenAI PaaS Future (Pt.1)

Summary

• Thank you for your patience since our last publication. We are currently doing our best to juggle holiday time and our research business.
• We have another series on Snowflake and Databricks following our in-depth scrutiny of their recent annual summits.
• In Part 1 we have a recap on the major players in the Modern Data Stack, discuss the key trends, and outline the evolution of the Cloud Data Warehouse.
• This lays the foundation for a deeper discussion on the open format war between Snowflake and Databricks in Part 2.
• Also in Part 2, we will share our view on AI Platform-as-a-Service and in Part 3 we'll share more specific thoughts on Snowflake and present an updated valuation.

Overview

It has been a month since SNOW and Databricks' respective annual summits. On a high level, we are definitively seeing the maturity of MDS (Modern Data Stack) led by SNOW and Databricks as MDS-focused vendors, followed by hyperscalers like AWS, Azure, and GCP. This maturation also suggests a slowdown in the pace of product evolution, with less dramatic fundamental news emerging each year.

From the annual summits, two main shifts in focus have emerged: 1) Gaining control of the data estate, and 2) Winning the GenAI future. These focus areas have intensified competition among data platform players, leading to numerous strategic initiatives and counter-moves, particularly between SNOW and Databricks.

Currently, the data platform landscape is dominated by five main players: SNOW, Databricks, and the hyperscalers AWS, Azure, and GCP. The hyperscalers have recognized that offering Data Platform-as-a-Service (PaaS) provides greater value to customers, enabling more differentiation, lock-in potential, and higher margins compared to commodity IaaS offerings like VM instances or object storage.

In addition to these established players, we're witnessing the emergence of new contenders in the data platform space. These include Confluent, which approaches from the data streaming angle; Starburst, focusing on the data mesh concept; Salesforce, leveraging its strength in CRM data; and various solutions built upon ClickHouse. This diversification indicates the growing importance and evolving nature of comprehensive data management solutions.

Let's have a brief recap of each player: