Snowflake is Tripling its Market Opportunity Using this Billing Method. Learn how…
Snowflake is Tripling its Market Opportunity Using this Billing Method. Learn how…
Snowflake is a cloud-based data warehousing platform that enables companies to store, process and analyze large volumes of data. Lets see how they unlocked growth with their billing method...
Snowflake is a cloud-based data warehousing platform that enables organizations to store, process, and analyze large volumes of data in real time. Snowflake's architecture separates storage and compute functions, allowing businesses to scale up or down without downtime or performance degradation.
Snowflake employs a usage-based pricing model, meaning customers pay for the amount of storage and computing resources they use, rather than a fixed monthly fee. This model includes charges for data storage, data transfer, and the computing power used to query data. Snowflake's flexibility allows companies to optimize their spending based on current needs.
What does Snowflake’s revenue look like today?
Snowflake's revenue has been on a rapid growth trajectory, driven by the adoption of its cloud-based data warehousing services. The company's performance in the third quarter of 2023, for instance, exceeded investor expectations with product revenue of $698 million, up 34% year-over-year, and adjusted earnings per share of 25 cents, up 127%. The net revenue retention rate stood at 135%, highlighting strong customer loyalty and increased spending. Snowflake's guidance for the fourth quarter revenue was between $716 million and $721 million, indicating continued growth.
Snowflake's strategy of evolving its platform to support applications and providing APIs for developers to build and deploy apps directly on its platform represents a significant expansion of its market opportunity. This move not only increases the utility of its core services but also encourages more extensive use of its platform, further driving revenue growth.
The recipe for Snowflake’s growth is simple and has several factors working in its favor, which are:
Increase spending on Snowflake’s services
High returns on customer investments
New services to cater to customer needs, which in turn will make customers use Snowflake more, getting in more revenue.
Not just that, in Q3 436 companies had more than $1 million in revenue indicating that people were growing by using the platform.
The usage-based pricing model is key to Snowflake's success. It allows for a lower barrier to entry for new customers, making it easier for them to start using Snowflake's services without a significant initial investment. As customers' needs grow, they naturally consume more resources, which translates to increased revenue for Snowflake. This model aligns the cost directly with the value customers receive, leading to higher satisfaction and retention rates. It also accommodates fluctuating demand, providing flexibility that traditional pricing models can't match.
Catch up on this month’s must-reads!
Learn everything about usage-based pricing and also look at Togai’s latest content and product updates. Head over to 8-bits - we’ve curated everything bespoke on usage billing to help you get started!
Are you a CPaaS provider and unsure of how billing can help you unlock revenue? Read this piece on Forbes today, where we dive into how you can make the billing pivot.
What’s brewing with the product?
📜 The all-new visualizer: Togai’s new visualizer option provides a comprehensive view of all price-related configurations. It helps in understanding usage meters, associated price plans, and their connections which involves navigating multiple components. Togai’s visualizers offer an effortless way to visualize the impact of price configurations on customers.
💸 Custom Reports & Dashboards: Togai’s extensive reporting capabilities allow businesses to create reports and templates. These templates can be used to generate ad-hoc extensive and detailed reports, which can be downloaded or pushed to your preferred external data source. Did you know? You can now auto-generate your reports either hourly, daily, or monthly.
⏰ Create Alerts for every Parameter: Alerts are designed to give you control over monitoring usage thresholds and important account metrics. Easily set up alerts to notify you or your customers whenever a defined threshold is met. Whether it's usage limits, entitlement thresholds, or credit/wallet balance notifications. Additionally, Togai has crafted a variety of pre-defined alert templates. These templates are designed to meet common monitoring needs, saving you time and effort in setting up alerts from scratch.