It’s clear that Snowflake Inc. is at a crossroads. Examining why was the focus of the latest edition of the Breaking Analysis series, and was a big subject of conversation for theCUBE Research industry analysts John Furrier and Dave Vellante on the latest episode of the CUBE podcast.

“You saw this firsthand when Databricks announced the Unity Catalog last June, same week as Snowflake Summit,” said Vellante (pixetured, right).

Snowflake ensures all data resides within its platform, which allows the company to guarantee governance, simplicity and highly efficient performance on their compute engine, Vellante added. “The data has to be inside of Snowflake. Databricks never owned the data. What they did with Unity Catalogue changed the game,” he said. “It was brilliant.”

Databricks’ Unity Catalogue, which is essentially a governance engine for open table formats, doesn’t see Databricks owning the data, meaning the company wasn’t concerned if they disrupted it, according to Vellante. However, what it did say is that it would bring considerable value to open data formats.

“[It said], ‘We’re going to have the technical metadata, the operational metadata, all the governance metadata, and we’re going to govern any storage format, irrespective of where it is,’” Vellante said. “It didn’t disrupt their business. They said, ‘We’re going to disrupt Snowflake’s business.’”

Snowflake’s conundrums explained

Why is Databricks’ industry move important? It involves Snowflake announcing two years ago its support for Iceberg tables, because it saw this strategic move coming, according to Vellante.

“Here’s why they’re at a crossroads: Everything’s got to be inside of Snowflake to get that promise of governance,” he said.  “They’re leaning in to open table formats like Iceberg, but their conundrum is, they can take their IP, and they can extend it to Iceberg and say, ‘OK, we’re going to bring all of our governance love to open table formats.’”

But if the company does that, it opens up who can take the Snowflake IP and do whatever they want with it, according to Vellante. That poses big questions around the way forward for the company.

“They have managed Iceberg tables, which are first–class citizens inside of Snowflake. They announced that a while ago, but it goes against the open,” Vellante said. “They have a conundrum. If they give their IP to the open table formats like Databricks just did … they basically disrupt themselves and give up their moat.”

If the company brings it inside Snowflake and makes Iceberg tables a managed first-class citizen, then it is basically a quasi-open Iceberg, Vellante pointed out. It’s important to note that Snowflake created the fifth data platform, which involves separating compute from storage.

It basically brought “all the data into Snowflake so that it could be governed and managed and simple. The sixth data platform that we sometimes talk about, the moat is shifting, thanks to what Databricks did, to the catalogue,” Vellante said. “Now, gen AI changes the way in which you interact with data. There’s a whole new world coming.”

Mixed earnings highlight market uncertainty

Earnings have continued to roll out in recent weeks, and not all of it has been encouraging. UiPath Inc. saw its stock plummet and announced Chief Executive Rob Enslin would resign, effective June 1.

MongoDB Inc. also saw its stock tank on lower guidance. Other companies saw more positive results, but earnings were mixed overall, according to Vellante.

“The only point I wanted to make about Mongo and UiPath, there’s a clear trend happening, which is they’re obviously trying to make gen AI a tailwind,” he said. “We know very well all the action, of course, is around GPUs and hardware right now. There’s that circular reference going on between GPUs and hyperscalers and LLMs. The value of AI hasn’t trickled up the stack yet.”

There’s a real spending halt in the marketplace right now, according to Furrier (left). There’s a lot of excitement around AI and hardware, but there are also layoffs taking place and spending is slowing down.

“You’re starting to see the software players slow down a little bit, Dave. I’m feeling like there’s a real weird vibe around what’s really happening,” Furrier said. “We’ve said this before on the Pod, it feels like the tale of two worlds. The hype world and then the under reality of like, ‘We’re good. Don’t look here; we’re not good,’ type of thing,” Furrier said. “It’s classic under the iceberg. Everything looks great, but underwater, it’s a different view.”

Watch the full podcast below to find out why these industry pros were mentioned:

Elon Musk, CEO of Tesla
Sam Altman, co-founder and CEO of OpenAI
Mark Zuckerberg, CEO of Meta Platforms
Helen Toner, director of strategy and foundational research grants at the Center for Security and Emerging Technology
Satya Nadella, chairman and CEO of Microsoft
Vinod Khosla, founder and managing director at Khosla Ventures
George Gilbert, principal analyst at theCUBE Research
Patrick Joseph McGovern, American businessman
Rob Enslin, CEO of UiPath
Daniel Dines, co-founder and CIO of UiPath
Crawford Del Prete, president of International Data Corporation
Bill McDermott, chairman and CEO of ServiceNow
Pat Gelsinger, CEO of Intel
Phil Jackson, former NBA player and coach
Shaquille O’Neal, former NBA player and sports analyst
Donald Trump, 45th president of the U.S.
Stormy Daniels, director, writer and adult film star
Kobe Bryant, former NBA player
Michael Jordan, businessman and former NBA player
Jay Chaudhry, founder, chairman and CEO of Zscaler
Saket Kalia, equity research analyst at Barclays Investment Bank
Palmer Freeman Luckey, entrepreneur best known as the founder of Oculus VR and designer of the Oculus Rift
David O. Sacks, founder and partner at Craft Ventures
Jean English, global CMO of Juniper Networks
Bob Laliberte, principal analyst at theCUBE Research
Zeus Kerravala, founder and principal analyst at ZK Research
Brian O’Shaughnessy, global communications executive
Sean Garrett, founder and convener at Mixing Board
Larry Yu, community member at Mixing Board
Andy Jassy, president and CEO at Amazon
Norman Vincent Peale, American clergyman and author
Sanjeev Mohan, principal at SanjMo
Doug Henschen, VP and principal analyst at Constellation Research
Rob Strechay, managing director and lead analyst at theCUBE Research
Hamdi Ulukay, founder and CEO of Chobani

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Photo: SiliconANGLE