Snowflake, Databricks, MongoDB are disrupting old enterprise tech

What a drag it is to grow old

In non-Wall Street parlance, Snowflake’s recent quarter was a blowout: sales rose 83% to $497 million, with revenue now projected to reach $1.9 billion for 2022. It’s a much-needed vibe shift after other enterprise tech companies like Salesforce and ServiceNow saw their share prices fall after issuing muted sales forecasts for the rest of the year.

The snowflake is not alone: Databricks just passed $1 billion in annual revenue and is aggressively recruiting, and earnings at Confluent and MongoDB exceeded Wall Street sales estimates. Even private companies like Cockroach Labs and Canva, which serve as alternatives to Oracle, Adobe and other so-called legacy companies, continue to take off, boosting sales and fundraising at an impressive clip.

The results are a sign of a seismic shift is taking place in the world of business software: the advent of the new IT stack.

• “Our space is for everyone tomorrow,” said Dave McJannet, who, as CEO of infrastructure services provider HashiCorp, depends on using cloud-based tools like Snowflake.
• The divergence is stark. With Snowflake, Databricks and others showing no signs of slowing down, Salesforce and Microsoft have scaled back outlooks and are implementing cost-cutting measures like a hiring freeze to boost profitability, as Oracle lays off workers.

Economic factors are certainly at play. In the face of a potential recession, some customers have stopped investing in core applications — such as HR systems or CRM — in favor of data management and analytics.

• But this is a drastic change from the course of the last three decades, when a few names – for example, Amazon, Salesforce, Microsoft and Oracle – seemed to dominate the discussion within IT departments.
• In 2005, if you wanted to buy a database, the options were pretty limited.
• Now the floodgates have opened: Alongside the likes of Amazon and Microsoft — which recently supplanted Oracle as the largest database vendor, per Gartner — there are a slew of new options customers are flocking to.

For some, it’s a missed opportunity.

For others, the current struggles are simply the result of the pivot in the cloud. It is not uncommon for architectural changes to bring new market dynamics.

• The move away from mainframes, for example, helped Oracle overtake IBM and solidify its previous status as the world’s largest database vendor.
• In today’s environment, VMware is a prime example: The company, which for 24 years has provided customers with a single platform to run multiple applications or operating systems on a server, is now on the defensive in front of a $61 billion acquisition from Broadcom, a company with a notoriously checkered history with customers.

For the new kids on the block, the future is definitely brighter.

• However, as Snowflake CEO Frank Slootman once said, “Only the government can print money; the rest of us have to take it from others.”

Read the full story here.

— Joe Williams (email | nervous)

A MESSAGE FROM VMWARE

VMware sits at the center of the multi-cloud universe and focuses on providing consistency in the clouds, enabling location selection and delivering best-of-breed capabilities. Join thousands of peers, hundreds of experts and VMware leaders at VMware Explore on the journey to reinvent the cloud, together.

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Business moves

In the past week, Seismic and SAP added new finance chiefs, Freshworks named a new president and more.

Evan Goldstein joined Seismic as CFO. Goldstein was previously senior vice president of investor relations at Salesforce.

Dominic Asam was named CFO at SAP. Asam was previously CFO at Airbus.

Lloyd Adams has been named president of SAP North America. Adams was previously senior vice president for SAP’s East region.

Dennis Woodside was appointed president of Freshworks. Woodside is the former president of Impossible Foods and COO at Dropbox.

Steven Stone joins Rubrik as head of Zero Labs, a new data threat research unit. Stone was previously VP of adversarial operations at Mandiant.

— Aisha is counting (email | nervous)

A MESSAGE FROM VMWARE

VMware sits at the center of the multi-cloud universe and focuses on providing consistency in the clouds, enabling location selection and delivering best-of-breed capabilities. Join thousands of peers, hundreds of experts and VMware leaders at VMware Explore on the journey to reinvent the cloud, together.

Learn more