throwawaysflake

Sorry I wasn't clear, I was saying it's vague what there would be a new purchase min of $1k (now according to the rep it is their internal policy is whatever level you were contracted at is the new min.). Since capacity for Snowflake is sold in very small tranches(we at one time got a bill for less than a dollar for the month during our on-demand time), I assumed the new contract could be issued with very small, essentially token amounts, this point is where the rep more or less waved his hands on and I agree I should have not trusted his portrayal. Honestly he may be working with the constrains of changing policies imposed on him too, so I def take responsibility here. Just as I mentioned, the post is for people who may be looking at similar clauses and coming to the wrong assumption that I did to not repeat the same mistake.

It is the min. additional required, given they calculate capacity usage into very small units (like one of our statements was for $0.20 which is also how they position themselves), I was under the impression from the rep they could re-paper with a token amount(basically roll over without any new significant purchase, for a 10k contract, 1k is to me significant). I of course should have pushed what the new contract min might be so that is on me. But as I mentioned in my reply elsewhere details that their min. purchase policies changes and apply to different people differently, which is their prerogative, but I'm just recommending people not to trust what their sales rep portrays and if you are small, just stay on demand because they may have some huge new min. purchase requirement that is not in your contract.

OP here, for some of the common themes/FAQs, because I am going to hop off but the original post doesn't have enough character space for me to be clear. 1. No, we obviously did not know the min. sales conditions to issue new contract after the year and the rep never mentioned this even though we explicitly discussed that we could not finish the contracted amount even at our pre-covid usage. The rep portrayed the roll-over process as simply issuing new paperwork. Had he said this is done with min. sales conditions, we would not have signed. I looked up what they have written publicly about their own roll over policy and I can only found this on their SEC filing "Customers have the flexibility to consume more than their contracted capacity during the contract term and may have the ability to roll over unused capacity to future periods, generally on the purchase of additional capacity at renewal".

What I want to point out is that the last clause does imply that some people at some point could roll over without purchasing additional capacity, so it may be that the policy of min. new purchase was made after we signed, or the rep didn't disclose the policy, or whatever. All this is to say their whole roll over policy is obviously in flux so you are at their whim even if it sounds great. The rep (I guess to convince me that the min. policy is not that bad) said newer customer are in a different bucket where their roll over can only occur by signing another purchase at the same price or higher (so if we signed later, we would have to pay 10K more to retain the 9k and so on). Hopefully these newer customers were told this or were savvier than me and got it in writing in their contracts. If you are interested in the exact text of the contract where roll over was mentioned, I posted it in a reply somewhere.

2. We signed a contract for a few reasons and the discount wasn't even the main one. We always prefer the flexibility but Snowflake promises engineering support only for those on contract, though we ended up not even needing this as we solved problems that came up ourselves and the product is pretty self explanatory. Again why I say go on demand. The discount offered for contracts is really small, much smaller than AWS for example where it's like 70% off for 3 years etc. AWS is super clear that those expire in 3 years but the discount is huge to make up for it. In Snowflake's case, I don't see the upside since roll-over is really a pain and the discount is tiny. I don't have any experience with the support to say whether having a contract is worth it for this reason, but I suspect you can probably go through generic support or solve your own issues without too many problems.

3. I have no problems so far with Snowflake as a product by itself which is why I still say if you want to use it, I just recommend doing it on demand. Especially because a lot of smaller orgs are probably drawn to their positioning of being more flexible and only pay for what you use computing, they clearly are trying to figure out how to maximize their top line and changing policies around so you are probably better off on demand.

The budget changed due to covid, we definitely anticipated using more than 10% in a year. Even at normal usage, we discussed with the rep that we could not finish in 1 year so what the point of a contract and he said it was easy to roll over and they will just issue new paperwork. That it would be with min. purchase was the condition that I think he should have disclosed but that's my issue for not pushing harder. That said, these new purchase min may be new policy after we signed because there seems to be newer policies that require even bigger purchases, which may or may not be disclosed at sales time/in their contracts.

My post is definitely a lesson learned and shared to others who are small and may be interested in getting better engineering support from Snowflake (a benefit of signing up that was the main reason for us that we ended up not needing) by the contract route to question their sales rep in depth and get it in the contract itself, and honestly, should just stay on demand.

lol, I normally am very empathetic to sales people, I feel like they do a difficult, soul sucking job. But in this case, I agree and wish I just told the rep to bugger off.

Yep same lesson. As I wrote above, we knew we could not finish the min. contract amount based on prior usage which the rep said the roll-over is great for our use case and would be fine for us to continue using them for the next year they would just issue new paperwork (I should have pushed harder on clarifying all the ins and outs of roll-over and get it into the contract). The contract is only 1 page and the only roll over clause is vague and so yes I guess they can basically decide to change what new contract polices they have internally and the customer would be subject to that whim, which from the rep it sounds they have because newer customers than us on a different policy (not sure how/when they decided to create these customer buckets) where contract can only roll-over by paying the same amount each year or more.

"Rollover of Capacity. If Customer purchases additional capacity under a separate order form before the end of the Subscription Term hereunder, any unconsumed Capacity will roll over into the immediately succeeding subscription term of such order form. Otherwise, purchased Capacity expires and becomes void automatically at the end of the Subscription Term."

Only if you stay on demand, which is why I say, use Snowflake if it works for you (not knocking the product), just stay on demand.

Edit to add that for those who don't believe the sales process was as misleading as I portrayed, just look at their investor earnings release from today! They really try to paint a picture that it is trivial to rollover your credits beyond your contract term and you wouldn't be anything you don't want to buy/need/use. I mean gotta laugh considering their newest policy is you have to buy new contracts at the same or greater price point as last year to rollover.

"Product revenue is a key metric for us because we recognize revenue based on platform consumption, which is inherently variable at our customers’ discretion, and not based on the amount and duration of contract terms. Product revenue includes compute, storage, and data transfer resources, which are consumed by customers on our platform as a single, integrated offering. Customers have the flexibility to consume more than their contracted capacity during the contract term and may have the ability to roll over unused capacity to future periods, generally on the purchase of additional capacity at renewal. Our consumption-based business model distinguishes us from subscription-based software companies that generally recognize revenue ratably over the contract term and may not permit rollover. Because customers have flexibility in the timing of their consumption, which can exceed their contracted capacity or extend beyond the original contract term in many cases, the amount of product revenue recognized in a given period is an important indicator of customer satisfaction and the value derived from our platform. Product revenue excludes our professional services and other revenue"

https://investors.snowflake.com/news/news-details/2020/Snowf...

We knew we weren't going to use the entire prepaid amount and said to the sales rep we didn't think it was worth doing it because our usage was low and we would have amounts left over and the rep insisted the roll-over process would be perfect for our use case (he can see our prior months of on demand) and said literally it is just paperwork (I guess that is technically true, paperwork is involved, so lesson learned!). That said, from what he wrote it seems these "policies" may be new to 2020 because he told me that even newer customers have the renew at the original contract amount or more to roll-over so maybe it was easy paperwork any roll-over back in 2019 when we signed and that has since changed. The contract is so vague that it only protects them, not the customer, if they decide on changing their internal policies. Obviously, if they just stated the policy, we wouldn't have signed any contracts.

We purchase because without contract, you can't access their support engineer which we thought we would need but turned out not needed at all (also, I am starting to doubt if the support engineer part is even true, you can probably submit a ticket anyway).15% is not a significant enough saving to sacrifice the flexibility, given AWS can offer like 75% off at reserve. I wrote this post so others who may be considering it should know their rep may not be transparent about everything or might not be able to live up to their promises. I feel like for their long term, this is counter productive for their business strategy, shrug.

We did expect to use more but covid changed that, that said, the problem I am warning others about is the the sales conversation was not accurate, but none of what was promised was in the contract in writing. Definitely my fault though for trusting that the roll over process is as simple as issuing new paperwork as portrayed by a guy who is just looking to close the deal. I have not had such a problem with other companies in the same sector with such sales practices but maybe that's just my experience. Makes no sense to me though coz who would want to sign a contract when you don't know what policies they might decide on mid-way, the discount offered is tiny (unlike AWS reserved where it is super clear when they expire but you also get a huge discount so it's not vague what the trade-offs are) and you are much better off on demand.