(Editor’s notice: This text by Jiri Kram was initially printed on LinkedIn on Sept. 10. Jiri has printed a number of articles right here at Cloud Wars over the previous six months, and as with all of his different insightful and compelling items, this text displays Jiri’s knowledgeable views and doesn’t essentially replicate the views of Cloud Wars. On this piece, Jiri explores the possible ramifications of the much-anticipated IPO for Snowflake and the components to be performed in that occasion by buyers Salesforce and Warren Buffett. Jiri’s most-recent Cloud Wars article, known as Can Salesforce Become the Next Trillion-Dollar Company?, touches on some associated themes and was printed Sept. 5. An answer architect who studied FinTech at MIT and has a selected emphasis on ML and blockchain, Jiri has labored with Salesforce know-how for a few years.)
There have been numerous milestone years in enterprise IPO historical past: 1986, 2004 and 2012. I consider the 12 months 2020 shall be remembered the identical as these key dates.
The Robin Hood of Omaha?
Did Warren Buffett immediately develop into the Robin Hood of Omaha as a substitute of the Oracle of Omaha? Unlikely! When you are 90 years old, you’ll not make silly bets along with your cash. It may tarnish your repute and your legacy. So why is probably the most well-known investor on this planet, Warren Buffett, taking a $570M stake in a start-up? And why is Salesforce investing an additional $250M in an organization you may by no means have heard about? Right here is my take why Warren Buffet, Marc Benioff and I are all bullish about Snowflake.
Brief historical past lesson
- March 12, 1986 – Oracle $ORCL (IPO value: $0.067, immediately: $55.73)
- March 13, 1986 – Microsoft $MSFT (IPO value: $0.089, immediately: $ 214.25)
- June 23, 2004 – Salesforce $CRM (IPO value: $3.95, immediately: $254.70)
- June 29, 2012 – ServiceNow $NOW (IPO value: $23.70, immediately: $487.41)
Will the 12 months 2020 add one other title in that record?
Play it once more Frank
Do you consider Snowflake would be the smallest of all? I don’t! Right here is why:
Snowflake goes to be one of many greatest tech IPOs in historical past
- Snowflake TAM is way larger than any earlier agency Frank took to IPO
- Snowflake disrupts the market dominated by Oracle, Microsoft, IBM…and so forth.
- Snowflake is designed for the multi-cloud world
- Snowflake is a main acquisition goal for nearly each cloud vendor
- Snowflake can develop into as large as Oracle (if not stopped by acquisition)
- Snowflake enhances SaaS purposes like Salesforce, ServiceNow…and so forth
- Snowflake has a know-how benefit that shall be additional expanded
- Snowflake has a beneficial financial mannequin making it hedge in opposition to vendor lock
- Snowflake works with all main clouds: AWS, Azure, GCP and Salesforce.
- Snowflake integrates to many knowledge platforms Informatica, Tableau, Energy BI, and so forth
And it’s only a begin.
What’s the way forward for Snowflake?
There are solely three most possible choices:
- Snowflake is acquired by Salesforce, Oracle, Microsoft, Google, Amazon or IBM.
- Snowflake will develop into high-flier like ServiceNow, DocuSign, Okta, Veeva…and so forth
- Snowflake will outgrow opponents and can develop into as acquisitive as Salesforce
In 1986, I couldn’t put money into Oracle and Microsoft IPOs; I used to be too younger.
In 2004, I missed the Salesforce IPO as I had no expertise in investing.
In 2012, I didn’t put money into ServiceNow as a result of I didn’t know find out how to consider corporations.
However in 2020, I can’t miss the Snowflake IPO.
(Creator’s disclosure: I’m lengthy in corporations talked about CRM, MSFT, AMZN, ORCL and NOW. I intend to buy SNOW shares when these develop into obtainable. I wrote this text myself, and it expresses my very own opinions. I’m not receiving compensation for it.)
(Further disclosure: The knowledge contained herein is for informational functions solely. Nothing on this article must be taken as a solicitation to buy or promote securities. Earlier than shopping for or promoting any inventory, you need to do your personal analysis and attain your personal conclusion or seek the advice of a monetary advisor. Investing consists of dangers, together with lack of principal.)