The salary is way out of proportion to other companies you mention…
To be clear his salary is $375K. Not that big for a CEO at all.
His total compensation has the potential to be huge, but that’s only if the company delivers results and the stock market rewards them. For comparison, I don’t think any Tesla shareholder begrudges Elon Musk’s compensation.
I am still not sure what to think about repeatedly mentioning to investors that it’s not a SaaS company but a “consumption company”. There was even a few analysts asking why they think this is important to point out repeatedly. From what I can tell, they measure net retention rate different, and they focus on reporting RPO contrary to other SaaS vendors. Maybe I am wrong and this is a company like no other company before and therefore needs different metrics to determine performance.
I’m with you on this. I think the distinction he’s drawing is that if you look at a subscription company like Netflix, customers pay a rate no matter how much they watch or don’t watch. A consumption company is like AWS, where customers pay based on usage metrics like CPU consumed or storage occupied, or like DataDog, where customers pay per host monitored.
Here is Snowflakes pricing (https://www.snowflake.com/pricing/pricing-guide/ ):
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All customers are charged a monthly fee for the data they store in Snowflake. Storage cost is measured using the average amount of storage used per month, after compression, for all customer data stored in Snowflake.
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A virtual warehouse is one or more compute clusters that enable customers to load data and perform queries. Customers pay for virtual warehouses using Snowflake credits.
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The cloud services layer provides all permanent state management and overall coordination of Snowflake. Customers pay for cloud services using Snowflake credits.
What are Snowflake Credits?
A Snowflake credit … is consumed only when a customer is using resources, such as when a virtual warehouse is running, the cloud services layer is performing work, or serverless features are used.
For pricing in dollars, visit https://www.snowflake.com/pricing/ and choose a Cloud Provider and Region.
For instance, AWS West is $2/credit for the Standard plan, $3/credit for Enterprise plan, and $4/credit for the Business Critical plan.
Capacity storage is $23/TB per month if you pay up front. On-demand storage is $40/TB per month based on usage.
Finally:
The cost of the Snowflake service is determined by actual usage which varies based on the individual customer application. Most Snowflake customers gain experience using Snowflake On Demand. That allows the application workload to be developed and tested and provides real-world experience to estimate the monthly cost. When the application workload is understood, an appropriately sized Capacity purchase can be made.
I’m inferring that if you pay for “Capacity” instead of “On Demand” you save money ($17/TB per month to be exact). But, they understand you can’t know what you need until your application is complete and running, so they expect people to use On Demand during development and then pivot over when complete.
For a capacity purchase, the price of Snowflake credits is determined at the time the order is placed and is based on the size of the total committed customer purchase.
So, they have volume discounts.
As for not being SaaS, they are correct in that you don’t get billed for months in which you have no data stored and no queries performed and no cloud services utilized. However, anyone with a running application is locked in anyway since moving that application off of Snowflake would require significant work, and besides they have already made a “committed customer purchase.” Seems like a guarantee of future sales for those customers would want to get away from On Demand pricing.