Snowflake

Snowflake Negotiation Insights

When negotiating a contract with Snowflake, there are several key levers and commercial items that can be used to ensure you get the most value. Here's a glimpse into the Vendr platform insights which can be key during your negotiation.

Discount Levers

Snowflake operates on a credit-based system, which makes volume discounts a common discount lever. A higher commitment of credits over a longer contract term can often lead to sizable discounts. However, the pricing can also vary between Snowflake editions and features, so it's recommended to clearly define your usage requirements to avoid overspending.

Commercial Items

One key commercial item to keep in mind during negotiation is Snowflake's data storage costs in addition to its compute costs. Data storage is tiered and can have reduced prices at higher volumes. Given Snowflake's distinct separation between computing and storage, optimizing for long-term data storage can be a strategic cost-saving measure.

To access a full suite of negotiation insights for Snowflake including more discount levers and commercial items, sign up for a free forever Vendr account. Discover the intelligence available to take your negotiation strategies to the next level. Please note, there are dozens of negotiation insights available for Snowflake on the Vendr platform.

Expert Tips on How to Get the Lowest Price on Snowflake

Here are some specific actions you can take to negotiate better terms and secure a favorable price when renewing Snowflake for your growing business.

Step 1: Review and optimize your Snowflake usage.
90 days before your renewal, review your Snowflake usage to determine if there are any areas where you can right-size your warehouse, remove unnecessary jobs, or identify failing queries. It's critical to do this 90+ days out to understand the impact when forecasting your annual spend.

Step 2. Confirm that your organization is committed to Snowflake.
If you’re considering switching to a competitor (due to functionality or to see if you can get better pricing with Snowflake), make sure to start the conversation with Snowflake as early as possible. Remember: The time needed to migrate off Snowflake is significant, so introducing competitors at the last minute will either cause disruption or not be taken seriously from a pricing standpoint.

Step 3. Create a usage forecast.
Review your historical usage of Snowflake and factor in any expected company growth. Typically, Snowflake will offer you a renewal using an annualized version of your trailing three-month average as a starting point. Here’s how you find that figure: Take your last three months of usage, find the average, and annualize that number. Anything above this number is considered growth, and anything below is considered a reduction in scope.

💡Snowflake’s standard terms usually include rollover protection for customers who purchase a contract for greater or equal value (if it’s not in your contract, ask to include it).

Step 4. Negotiate for discounts with any growth.
Snowflake sales reps are compensated and measured by your consumption of their tool and by continued growth and adoption of the platform. Any time you’re growing, you should ask for a larger discount. Explain to Snowflake that you require discounts for continued growth and usage of the platform.

💡Snowflake will typically provide an additional 2% discount for a two-year commitment and 4% for a three-year commitment.

💡 Use multiple cycles increasing the scope on each pass to test the discount floor.

🚨Use growth or the incentive of growth as the main lever to increase your credit discount. “Budget restraints” are often not considered a good reason for price reductions with Snowflake.

🚨If the seller is unwilling to offer the needed concessions, take a step back and introduce the need to evaluate more growth-friendly alternatives.

Step 5. Determine your negotiation “gives.”
Keep a few “gives” — or things you’re willing to offer the seller— in your back pocket during negotiations. “Gives” that often come with good leverage include: built-in growth, multi-year terms, expedited signature, case study/logo use, and annual payment upfront.

Step 6. Future-proof your renewal.
Work with Snowflake to include price protection in your contract so your credit rate will not increase upon renewal. It's critical to lock the actual credit rate here versus the discount rate: By locking the discount rate, Snowflake could raise its underlying pricing.

Step 7. Confirm internal approvals.
Confirm whether legal and/or security teams need to conduct due diligence or reviews.

Step 8. Agree to pricing terms and finalize approvals.

Community Insights for Snowflake

Gathering insights from the community can be incredibly valuable when considering a SaaS product like Snowflake. Here are the two most recent insights shared by our community members:

1. "We weren't able to get a better capacity discount because we didn't have growth or were interested in a multi-year. We have a 6% capacity discount." - Community Insight was posted recently.
2. "Snowflake is now providing storage discount for contracts > 1.2M ACV." - Community Insight was posted 1 month ago.

For those looking to dive deeper into the world of Snowflake, we encourage you to sign up for a free forever Vendr account. By joining, you'll unlock a treasure trove of insights, including the estimated time to implement Snowflake, what to expect for your renewal, and other discount levers that can be implemented if you're stuck during the negotiation process. Currently, there are numerous community insights available for Snowflake, each offering a unique perspective and valuable information. Don't miss out on this opportunity to enhance your procurement strategy with Vendr!

Snowflake Overview

Snowflake is a cloud-based data platform primarily used for data warehousing. It's robust nature lends itself well to organizations of any size, scaling with the needs of your business. This innovative platform reduces complexities typically seen in data warehousing infrastructure, giving your business the resources needed for easy, efficient data analysis (see our article on the top Snowflake competitors & alternatives for more info on how other solutions in this space measure up).

Compliance and Security

Snowflake places a high priority on data security and compliance. As a part of its commitment to secure data handling, it is compliant with General Data Protection Regulation (GDPR) and Service Organization Control (SOC2). This means it has implemented systems and practices designed to safeguard your data.

Multifactor Authentication (MFA) and Single Sign-On (SSO) capabilities are in place to provide an additional layer of security, preventing unauthorized access and ensuring only those with the proper credentials are allowed access to sensitive data.

Snowflake also adheres to Personally Identifiable Information (PII) and Data Protection Act (DPA) regulations, assuring that your personal data is stored and handled in a legal and ethical manner.

FAQs About Snowflake Pricing and Plans

How can I estimate my Snowflake costs?

Estimating your Snowflake cost involves considering your expected usage volume, the tier of service you select, and the number of Snowflake credits you will consume. Utilize the Consumption Table on Snowflake's website to plan and estimate costs based on storage and computing needs. Remember, optimizing queries and considering a hybrid approach can also impact your overall cost.

What are Snowflake credits and how do they affect my billing?

Snowflake credits are the currency used within the Snowflake platform to measure the consumption of computing resources. Your billing is directly related to the number of credits consumed, which varies by the service tier you choose (e.g., Standard, Enterprise, or Virtual Private Snowflake). Managing your credit usage efficiently is key to optimizing your Snowflake cost.

How does Snowflake integrate with other cloud services?

Snowflake seamlessly integrates with a wide range of cloud services and platforms, enhancing its functionality and allowing users to leverage the best of cloud technology. This includes data sharing and interoperability with AWS, Google Cloud, and Microsoft Azure, offering a flexible and scalable ecosystem for your data warehousing and analytics needs.

What unique functionality does Snowflake offer compared to other data warehousing solutions?

Snowflake stands out with its ability to separate computing and storage, enabling users to scale each independently and pay only for what they use. This unique architecture supports a wide range of data workloads, including data engineering, data lakes, data applications, and data sharing, all within a single, managed platform. Additionally, Snowflake's support for multi-cloud environments enhances its functionality, allowing businesses to operate across different cloud services seamlessly.

Can Snowflake handle real-time data processing?

Absolutely. Snowflake's platform is designed to handle real-time data processing efficiently, enabling businesses to make timely decisions based on the latest information. Its robust architecture and scalable computing resources ensure that users can process and analyze data streams in real-time, enhancing operational insights and responsiveness.

How does Snowflake ensure data security and compliance?

Snowflake prioritizes data security and compliance with industry-leading practices, including support for GDPR and SOC2 regulations. It employs advanced security measures such as multifactor authentication (MFA) and single sign-on (SSO), alongside adhering to PII and DPA standards, ensuring that your data is secure and managed responsibly within the cloud.