Complete Guide to Snowflake’s Data Warehouse + Contract Negotiations

In 2023, Snowflake reported a revenue of $734.2 million in the third fiscal quarter alone—a 33.6% increase from the previous year. This growth has helped Snowflake secure a 19.73% market share—solidifying its position as a key provider of data warehousing solutions.

As more businesses adopt cloud-based solutions to manage their data, it's important to understand what Snowflake offers and how to make the most of its pricing and contracts. Properly leveraging Snowflake’s capabilities ensures you can optimize their data infrastructure, manage costs effectively, and gain a competitive edge.

This article will walk you through what Snowflake is, how it works, and how you can get a low price with Vendr expertise. 

What is Snowflake?

Snowflake is a cloud-based data warehouse that helps businesses store, manage, and analyze large amounts of data. With 10,249 global customers, organizations worldwide trust Snowflake to bring together data from different sources, share it securely, and handle various tasks efficiently.

Core features of Snowflake’s data warehouse

Snowflake’s unique design separates storage from computing, making it easier to scale resources as needed. This setup offers businesses the flexibility and scalability to manage changing workloads, which is essential for companies running large-scale operations. For example, Snowflake customers perform more than 5.3 billion queries on the Snowflake Data Cloud. 

Why should you consider adopting Snowflake?

Snowflake is a go-to option for efficiently analyzing and managing large data assets. This makes it ideal for organizations handling large data volumes, offering real-time data processing and minimal management overhead. Currently, almost 57% of Fortune 500 financial services firms use Snowflake. Due to its versatility, the platform lets you keep data in check while growing with company needs.

Below, we take a closer look at how Snowflake operates.

How does Snowflake work? Complete architecture breakdown

Snowflake is designed to be powerful and flexible, ensuring secure and efficient data management. It verifies secure data storage, which complies with various industry regulations such as GDPR, HIPAA, and SOC Type II, besides using end-to-end encryption. 

The architecture is structured into three main layers: 

• Database storage 
• Query processing
• Cloud services 

All three layers have a significant role in how Snowflake provides its services. Here's how: 

Database storage

In Snowflake, data is stored in the cloud using optimized, compressed formats. This approach saves space and reduces costs since you only pay for the storage you use. Data is organized into micro-partitions and automatically managed by Snowflake, ensuring fast and efficient retrieval.

Query processing

Snowflake uses virtual warehouses to execute queries. These virtual warehouses are independent compute clusters that can be scaled up or down according to your needs. The platform uses a Massively Parallel Processing (MPP) environment, so it can handle multiple queries at once. 

Cloud services

The cloud services layer manages Snowflake’s infrastructure, security, and query optimization. It handles tasks such as authentication, metadata management, and the automated optimization of queries. Snowflake's design ensures these services operate smoothly, minimizing the need for manual intervention.

Use cases for Snowflake

Snowflake is widely used across different industries to handle data management and analytics tasks. Even with such wide usage, various businesses report significant cost savings. Here are some key applications and success stories that illustrate Snowflake’s versatility:

• Data ingestion: Easily handle real-time data by connecting to sources like Amazon S3 and Azure Blob Storage. Vendr helped Certn save over $366K by managing their software purchases and negotiating better deals with companies like HubSpot and Atlassian. 

• Business intelligence: Using Snowflake with tools like Tableau and Power BI helps businesses make better decisions, fast. Plot.ly saved $986K by finding low deals on software with Vendr, ensuring they had the right tools for valuable insights.

• Machine learning: Companies using machine learning workflows benefit from Snowflake’s compatibility with frameworks like TensorFlow and Apache Spark. Orum, for example, saved $160K in software costs by optimizing their machine learning processes with Vendr’s help.

• Data sharing: Through the Snowflake Marketplace, businesses can collaborate and share data across organizations. This lets them enrich analyses with external data sources, leading to better-informed decisions. This is especially valuable in industries where data sharing and collaboration are key.

Navigating Snowflake’s cost and pricing models

Snowflake uses a pay-as-you-go model, meaning you only pay for what you use. This flexible approach has helped some companies cut their data warehousing costs by up to 60%. On average, a Snowflake contract is worth around $503,453, but with smart management, you can cut costs.

Consumption-based pricing

Snowflake’s pricing is based on how much you actually use, with costs divided into three main categories: 

• Compute,
• Storage, and 
• Cloud services

This makes it easy to adjust spending by scaling resources up or down as needed. Snowflake offers different pricing tiers to suit various needs. 

For example, a contract for a company with 200 employees might range from $23,300 to $85,600, while a larger company with over 1,000 employees could see costs between $193,400 and $534,700. Snowflake uses credits as the basic unit of billing, and the cost per credit depends on the tier:

• Virtual Private Snowflake (VPS): $6 to $9.30 per credit
• Enterprise tier: $2.20 to $4.30 per credit
• Standard tier: Set at $276
• Business critical range: $4 to $6.20 per credit

Compute costs

Compute costs are based on the use of virtual warehouses, which are groups of compute resources. The size and how long you use these warehouses will affect your costs. Smaller warehouses are cheaper and slower, while larger ones are faster but more expensive. 

Choosing the right size for your workload is important to avoid extra costs. Snowflake’s auto-suspend and auto-resume features can help save money by turning off warehouses when not in use.

Storage costs

Snowflake charges storage costs per terabyte per month, where data is automatically compressed to save space and reduce costs. However, extra features like Time Travel (to access older data) and Fail-Safe (for extra data protection) can increase storage costs. 

To keep expenses low, regularly review stored data and delete unnecessary files. 

Snowflake offers a Consumption Table that shows storage pricing by region, helping you plan and control costs better. You can also save money by using third-party partners to optimize your queries, while reserving  Snowflake for high-demand tasks.

Cloud services costs

Cloud services costs cover data transfer, query processing, and other essential tasks managed by Snowflake. These costs can add up, especially with frequent data transfers or complex queries. Keeping an eye on these services and optimizing their use can help manage expenses. 

For example, Vendr helped companies save approximately 8% on Snowflake contracts by negotiating lower deals and optimizing usage.

For more details on Snowflake's pricing and how to manage it, you can check out Vendr's Snowflake Buyer Guide and purchase Snowflake directly in the Vendr Marketplace.

Get the most from your Snowflake investment with Vendr

Making the most of your Snowflake investment doesn’t have to be complicated. Vendr is here to help you manage costs and get the best products at low prices. With Vendr, you’re not just saving money—you’re getting smarter about how you buy and use software.

Vendr has processed over $1.5 billion in software purchases and helped companies save more than $240M. Whether negotiating better deals or avoiding duplicate purchases, Vendr makes sure you’re keeping prices low.

If you’re looking to get a low price on your Snowflake investment, Vendr has the tools and expertise to make it happen.

Snowflake data warehouse FAQs

Is Snowflake an ETL tool?

Not exactly! Snowflake is a cloud-based data warehouse, but it works great with ETL tools to help you manage and analyze large amounts of data.

What is the Snowflake data cloud?

The Snowflake Data Cloud is like a big, secure hub where you can store, share, and analyze data from different sources all in one place, across multiple clouds.

Can Snowflake be used for real-time analytics?

Absolutely! Snowflake is designed to handle real-time analytics by easily integrating with real-time data streams and offering scalable performance.

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