Data Warehousing Grows Massively, Fueled by Cloud-Only and Hybrid Start-ups

Many large corporations are getting buried under an avalanche of data, much of it from new sources including click-streams, social media and internet-connected devices.

A common response by the companies has been to create so-called “data lakes”Opens a new window to store the stuff. It’s the equivalent to the “File 13” of yesteryear that holds anything and everything.

These days, though, the data must be properly categorized, analyzed and utilized to provide enterprises a competitive edge. Indeed, curated data is essential for companies to act on fast-breaking opportunities to grow their business, attract customers, boost productivity, maintain devices and make informed decisions.

The market for companies managing data lakes is booming. A recent report by researchers at Mordor Intelligence predicts they will see compound annual growthOpens a new window exceeding 29% from now until 2024.

Another study by Denodo found that 56% of organizations are deploying data warehouse technology in the cloudOpens a new window .

Additionally, there’s room for a hybrid solution. A company called Yellowbrick Data offers data warehousing technology that can be deployed through on-premises data centers and public and private clouds. The Palo Alto-based company is betting on a need for some data and applications to remain on-premises.

Another leading company in the market is Snowflake of San Mateo, California, which is placing its chips exclusively on the cloud market. Since its founding in 2012, Snowflake has sold a cloud data warehouse service that’s essentially a specialized database for handling analytics queriesOpens a new window .

While providing a  store-and-search service similar to traditional database providers like Oracle, Snowflake was built for the cloud rather than adapting from the old model of storage in customers’ data centers. And although it counts big public cloud providers including Amazon Web Services, Microsoft Azure and Google Cloud as its chief competitors, it’s also a customer of the Big Three, paying them to store its clients’ data on their clouds.

By acting as a virtual data lake – an easily-searchable layer between cloud providersOpens a new window and a company’s own programs and apps – Snowflake lets its customers store and use their data across cloud providers, which can be a big concern for the enterprise as more companies adopt a multiple cloud-vendor strategy.

It’s been highly successful at raising capital too, reaching a lofty valuation of $12.4 billion following a recent $479 million fundraising round led by the venture capital arm of Salesforce, a leader in the automated customer relationship management market. Snowflake’s chief executive, Frank Slootman, insisted that the company wasn’t looking for extra cash but entered the fundraising drive to forge a new partnership with Salesforce.

“We would not have raised a round if it hadn’t been for the partnership,” Slootman told CrunchbaseOpens a new window . “At a high level, the partnership is about allowing Salesforce data to very easily, seamlessly be shared on the Snowflake platform.”

“We wanted to advance our content strategy,” he said. “We need core data assets, or content, put onto the Snowflake platform and that is why we are doing this.”

Salesforce houses its clients’ data on customers, and the information can be combined with data stored inside SnowflakeOpens a new window and then sent to a service like Salesforce’s Tableau for visualization.Opens a new window

Despite Slootman’s claims, the fresh capital is still likely to be useful as the company takes on Microsoft’s SQL Data Warehouse, Google’s BigQuery and AWS’s Redshift – the big cloud infrastructure providers and their data warehouse offerings.

Snowflake has already drawn about 2,500 customers away from AWS’s Redshift data warehousing service, including Adobe, Instacart, Deliveroo and Strava. Others among its more than 3,400 customers include Brex, ConAgra Foods, Domino’s, JetBlue and Nationwide.