Instacart's IPO filing suggests its Snowflake cloud spending will fall 71% YoY in 2023, sparking an online spat between staff of rivals Snowflake and Databricks
- Instacart's long-awaited IPO prospectus last week turned controversial in a way the grocery-delivery company wasn't anticipating.
CNBCAri Levy
Context & Ripple Effects
Instacart’s path to the public markets had already created a visible Snowflake connection: it added Snowflake CEO Frank Slootman to its board while signaling IPO ambitions in an earlier board appointment.
The prospectus arrived after Instacart reported a swing to profitability in 2022 and continued revenue growth in the first half of 2023, making its IPO financial disclosure a closely watched record of how the company is managing operating costs.
First-order effects
Snowflake faces a sharply lower expected contribution from Instacart in 2023, based on the spending figure disclosed in the filing.
The disclosure turns one customer’s cloud-cost trajectory into a public competitive talking point, immediately drawing Snowflake and Databricks employees into a dispute over its meaning.
Second-order effects
Snowflake and Databricks sales teams can use the episode to frame customer conversations around data-platform efficiency, though the filing alone does not establish why Instacart’s spending changed.
Other cloud-software buyers and investors gain a rare public data point for scrutinizing whether vendor growth reflects durable usage or customers’ cost optimization.
Third-order effects
If similar disclosures recur, large data-cloud providers may face more investor focus on net expansion within major accounts rather than headline customer additions.
The episode points to a more transparent contest over cloud data economics, where public-company filings can influence vendor positioning as much as product claims.
The trend: This is one data point in the widening subscription growth gap between cloud vendors’ expansion narratives and customers’ pressure to optimize recurring infrastructure spend.
Never expected to see tech drama between cloud storage providers. It looks like Instacart migrated from Snowflake to Databricks and dropped their spending with Snowflake by 71%. This makes Snowflake look like the expensive choice and unfortunately for everyone involved, Snowfla…
One Reddit user wrote a post a few months ago, titled “Databricks and Snowflake: Stop fighting on social.” A commenter responded, “Is this the pro-wrestling of data engineering?”
@GrainSurgeon The biggest learning here I see is that all of this could have been avoided by Instacart not having the CEO of one of their biggest vendor on their board. Because all this started thanks to having to disclose Snowflake spending thanks to a conflict of interest via S…
Got more details: there is no Snowflake to Databricks migration happening at Instacart. It's Amazon Kinesis Data Firehose to Databricks migration for ETL pipelines; and a separate Snowflake cost optimization (likely not just Snowflake btw) So, business as usual pretty much?
Snowflake's CEO is on the board of directors for Instacart. The thing that blew my mind is how my email addressed only to Instacart's press team ended up at Snowflake (who I never contacted) and why Snowflake makes/can make definite statements on behalf of Instacart.
Interesting: Instacart deleted their Engineering blog post titled How Instacart Ads modularised data pipelines with Lakehouse architecture and Spark. Lakehouse architecture & Spark == Databricks, so they explained this migration. Only a 404 here: https://www.instacart.com/... [im…
@jakozaur In the end my take is: good on Instacart for 1. Optimizing their spend 2. Choosing technologies that work the best for the eng team's needs for features & cost, regardless of who is on the company's board 3. Everyone is optimizing vendor spend, not just Instacart.
Good addition by @jakozaur: Instacart usage of Snowflake might not be down by as much as their annual spend is. They could have eg prepaid in 2022 (hence the large bill) and doing so could have helped the company generate a profit in H1 2023. It is unclear if this happened from..…
According to Snowflake - who seem to have insider knowledge from Instacart, and somehow get my press questions routed to them - “Instacart is not migrating any additional workloads. Snowflake serves as the backbone of Instacart's data system.” Instacart never told me anything.
Dug into this. Instacart cut Snowflake spend by 70% in 2023, while starting to migrate ETL loads to Databricks - then deletes blog post detailing migration. I email Instacart press team with questions but Snowlake press team comes back with a comment on behalf of Instacart 🤯