A few years ago, Snowflake and Databricks were up-and-coming cloud software startups that were so friendly, their sales teams regularly passed customer leads to each other.
Both companies made unglamorous but critical components for businesses—from Shell Oil to DoorDash—that helped them boost sales or reduce costs by making better and faster use of the large amounts of digital information they generated. Then Snowflake, led by legendary software CEO Frank Slootman since 2019, proved its core database product could beat rival offerings of cloud incumbents such as Amazon Web Services. Snowflake parlayed its blistering growth into the biggest initial public offering in software history, in 2020.
The days of sharing sales leads are long gone. Databricks—itself a hotly anticipated IPO candidate—is now directly competing with Snowflake’s core product, driven by a sense that Snowflake was invading its turf. And Databricks has since sold the new product to a few bold-faced Snowflake customers like AT&T and Instacart. Snowflake, meanwhile, has accused Databricks of employing underhanded marketing tactics to win attention. At stake are tens of billions of dollars in potential future revenue.
