During my keynote at Snowflake Summit in June, I mentioned that relentless innovation is at the core of how we approach product development at Snowflake. This innovation comes in the form of new features and a continuous focus on improving performance and reducing latency. Also, as we innovate, our customers continue to find new uses for our technology. This combination of factors has led to some instances where our billing model is not aligned with our technology. As a result, we have decided that an update is needed to ensure that we are aligned to deliver industry-leading performance along with the right resources to every customer. In this post, I’d like to share what we’ve learned and explain the changes we’re making to our billing model.
Most customers know that Snowflake has a unique architecture that enables unprecedented levels of concurrency with incredible performance in a model where you pay only for what you use. Our architecture has a cloud services layer that acts as the “brain” that orchestrates all of the different components of Snowflake to provide a unified, consistent system. Over the last few years, we have made a number of enhancements that shifted the processing of queries and requests from the compute layer to the cloud services layer, eliminating the cost of a virtual warehouse and resulting in faster response times. For example, we’ve implemented results caching, which enables repeat queries to reuse existing results without spinning up a virtual warehouse. We’ve also made a number of optimizations for several types of aggregate queries where we can process and return results based solely on metadata residing in the cloud services layer. We intend to keep enhancements like this coming.
Our customer usage patterns have also evolved. Snowflake started as the data warehouse built for the cloud. However customers are now using Snowflake in broader contexts: building applications and managing application state, transforming data, and more. Although most of these workloads use a fairly small proportion of cloud services resources as a percentage of compute, others consume cloud services resources almost exclusively. Historically, our credit pricing model assumed some usage of cloud services resources, but shifts in customer behavior mean that our underlying assumptions haven’t held true in all cases.
We are making a change that will affect only the heaviest users of cloud services resources. A significant amount of cloud services resources, measured as up to 10% of consumed daily virtual warehouse compute, will continue to be provided for free. However, we will start charging for cloud services usage above the 10% daily threshold. There are two main reasons why this change is important. First, it enables us to continue to invest in performance and functionality that will best serve our customers, regardless of which layer of our architecture is doing the work. Second, it aligns the cloud services usage with our pay-for-what-you-use model, which is critical for Snowflake to continue to allocate resources properly across customers with different usage patterns.
WHO IS AFFECTED
The large majority of customers will see no billing impact from this change given we are still including significant cloud services usage for free. Starting today, customers will be able to review their usage in Snowflake to determine their individual impact.
WHEN DOES THIS CHANGE GO INTO EFFECT?
The change in cloud services billing will impact new and on-demand customers starting February 1, 2020. Billing for existing customers will reflect this change upon the first renewal after that date.
Over the coming year, you will see us continue to invest in new features as well as make a number of performance enhancements across Snowflake. We expect that an increasingly broad set of queries will be executed with little or no compute needed from virtual warehouses. We will expand the types of data and operations that we support. We will continue to deliver innovative cross-region and cross-cloud capabilities. We also expect response times for queries to be dramatically faster. All of these enhancements will result in cost savings to our customers. Overall, we are committed to delivering the best and most innovative data platform on the market with ever-improving price and performance.
For additional information, please review the detailed FAQ in this Snowflake Community post.