Snowflake wants to help telcos ditch silos with a blizzard of data

  • Effective use of data can help telcos go beyond the current brute force approach to network planning, according to Snowflake.

  • AT&T, Three UK, Singapore operator M1 and satellite operator OneWeb are all Snowflake customers.

  • Snowflake's subscription pricing could prove disadvantageous because that cost could increase, making its services prohibitively expensive for small and medium-sized providers, analyst Ray Mota said. 

So long, silos. Snowflake is working to end the long winter of telcos being unable to share data between business units easily. However, it’s going to require uphill sledding, according to some industry analysts. 

Founded in 2012, the company provides a cloud data platform designed to help enterprises pull insights from the information they generate.  

Snowflake’s Data Cloud service runs entirely in the cloud. It provides a single, unified platform that runs on Amazon Web Services (AWS), Microsoft Azure and Google Cloud, so enterprises can avoid lock-in to a single cloud provider and receive the same capabilities anywhere, in any cloud, in any location. 

Earlier this year, Snowflake launched a Telco Data Cloud business unit to bring communications providers the benefits of its multi-cloud service and help them unite organizational data stored in multiple silos. 

“We see this often, where marketing and sales are disconnected from planning and network engineering,” Phil Kippen, Snowflake’s head of industry, telecommunications, told Silverlinings. Marketing and sales will launch campaigns to increase demand in a particular region without coordinating with network engineering and find out later that the network doesn’t have capacity to meet demand. 

Using the Snowflake Data Cloud, sales, marketing, finance and network engineering can all access the same data at the same time. Sharing data between these departments is currently done in spreadsheets loaded on filesharing services or swapped in email, Kippen said. Breaking down these silos helps telcos deploy network resources more effectively, speed decision-making, and save on capex and opex, Kippen said. 

“Everyone is reading off the same sheet of music,” Kippen said. “We’re trying to make collaboration across these silos easier and ultimately help each group get fresh data in a faster way than they’re currently doing today.” 

Effective use of data can help telcos go beyond the current brute force approach to network planning, where telcos simply add capacity whenever network usage goes beyond 80%, he added. 

Momentum snowballs 

Additionally, Snowflake delivers data and analytics to support generative artificial intelligence (AI). “We can provide service providers with the ability to be better with respect to customer experience and troubleshoot network problems faster,” Kippen said. 

Snowflake recently partnered with NVIDIA and Microsoft on generative AI, and Snowflake launched its own large language model (LLM) to extract insights from documents. 

Snowflake’s big telecom push is still in early days. The company launched its Telecom Data Cloud in February, part of an overall strategy of launching individual business units to focus on specific industries that started two years ago. 

Already, it boasts AT&T, Three UK, Singapore operator M1 and satellite operator OneWeb as customers.  

Uphill sledding 

Snowflake faces a snowball fight between competitors, including AWS Redshift, Google BigQuery, Oracle, MongoDB, SAP, Microsoft, Cloudera, Teradata, IBM and Databricks, analysts said. But most of Snowflake’s competitors are also partners, Kippen noted. That’s particularly true in the case of AWS, Microsoft and Google, on whose cloud infrastructure Snowflake runs. 

But its multi-cloud support allows telcos to spread assets and draw on capacity across different clouds, replicate data between clouds, and use data center capacity from different providers in different countries as needed, Doug Henschen, VP and principal analyst at Constellation Research, said. 

“Snowflake hides the complexities of these cross-cloud connections and portability behind the scenes while giving customers the flexibility to use capacity where needed and move data and workloads where needed,” Henschen said. “Ease of setup, administration and scalability are also strengths.” 

He added, “I see them as an aspiring player in the telecom industry.” The foremost opportunity for Snowflake is in customer interaction data. Network and transactional data is still heavily on-premises, he said. 

Connectivity to third-party apps is a bonus, Ray Mota, CEO and principal analyst, ACG Research, said. “Snowflake supports a variety of data connectors, making it simple to connect to data sources from a wide range of systems,” he said. “This enables telecom companies to combine data from their various systems and applications to gain a more comprehensive view of their customers and operations.” 

Security is another strength for Snowflake, Mota said. “The company provides a variety of data protection measures, including encryption, access control and auditing. This is essential for telecom companies, which must safeguard sensitive client information,” he added. 

However, Snowflake has challenges, “The company’s dearth of expertise in the telecommunications market is one of its biggest obstacles,” Mota said. 

Mota added, “Snowflake is a young company that has not yet had the chance to establish a solid track record in this market. This could make it difficult for the company to gain telecom customers' trust.” 

Also, subscription pricing could prove disadvantageous because that cost could increase, making Snowflake prohibitively expensive for small and medium-sized providers, Mota said. 

And Snowflake faces the challenge of possible cloud backlash, Henschen said. “This year, we’ve seen companies in many industries looking to optimize cloud spending and reduce the pace of cloud migration. In some cases, companies are moving stable, predictable workloads back on-premises to run those workloads more cost-effectively and predictably on premises.” 

Growth prospects 

The company said it will add more than 1,000 employees this fiscal year, after adding 1,900 employees last year, even as IT spending slows and other tech companies lay off employees en masse. Product revenue in fiscal 2023 was $1.9 billion, up 70%. For the most recent quarter, revenue was $623.6 million, up 48% year-over-year, but the company posted a net loss of roughly $226 million. 

Snowflake has forecast product revenue of $620 million to $625 million for the current quarter (its fiscal Q2 2024), which would represent 33% to 34% growth year on year. 

Want to learn more about moving core networks to the cloud? Don’t miss our upcoming Telco Core Strategies Summit on Sept. 18. Learn more and register here.