Snowflake Chairman Frank Slootman attends the Snowflake Summit 2022 in Las Vegas on June 14, 2022.
Snowflake | Via Reuters
News of Snowflake CEO Frank Slootman’s retirement sparked an 18% plunge within the firm’s inventory value on Thursday, its steepest selloff because the knowledge analytics software program vendor debuted on the New York Stock Exchange in 2020.
Slootman’s departure was introduced late Wednesday as a part of Snowflake’s quarterly earnings report, which included disappointing steering. Analysts at Mizuho Securities wrote in a notice that the inventory is getting hammered “as investors digest the resignation” of Slootman, who joined in 2019 and led the corporate by means of its blockbuster IPO the next 12 months.
While the announcement precipitated consternation on Wall Street, Slootman instructed CNBC that he is not frightened a couple of wave of Snowflake staff following him out the door.
“This is not a personal cult, OK?” Slootman mentioned.
Slootman, 65, is being succeeded by former Google advert chief Sridhar Ramaswamy, who joined Snowflake in June by way of the corporate’s $185 million buy of Neeva, a startup Ramaswamy co-founded in 2019.
Snowflake was the third enterprise expertise firm that Slootman shepherded by means of the IPO course of, following Data Domain in 2007 and ServiceNow in 2012. Snowflake marked his largest monetary windfall. He managed roughly 6% of the corporate’s inventory on the time of the IPO, and owned 10.6 million shares as of Feb. 9, a stake that is at present price about $2 billion.
Additionally, Slootman’s whole compensation in 2023 amounted to $23.7 million, virtually totally from inventory and choice awards.
Before becoming a member of Snowflake, Slootman spent about six years as CEO of ServiceNow. He instructed CNBC that ServiceNow has continued to flourish since his departure. Annualized income has grown from $1.5 billion to virtually $10 billion.
“Some people are still there that I hired — quite a few of them, actually,” Slootman mentioned. “There’s also new ones, obviously.”
ServiceNow’s workforce stood at 23,668 by the tip of 2023, in contrast with 603 in December 2011, months after Slootman had joined, in response to regulatory filings.
“We put ServiceNow on the rails. We’ve done that with Snowflake as well,” mentioned Slootman, who’s sticking round as chairman.
Taking three corporations by means of massive and profitable exits is a uncommon feat in expertise, and has gained Slootman loads of acclaim. But he is additionally attracted consideration for moving into controversy on points just like the tech business’s concentrate on variety. In 2021, as company America was wading by means of the fallout of the George Floyd homicide, Slootman famous that variety should not trump advantage. He later apologized.
In his 2022 e book “Amp It Up,” Slootman provided recommendation leaders on the best way to increase requirements inside corporations, citing Steve Jobs’ insistence on greatness at Apple. “Don’t let malaise set in,” he wrote.
Founded in 2012, Snowflake constructed a cloud-based knowledge warehouse for storing and analyzing company info. Now the corporate needs to assist purchasers construct synthetic intelligence fashions and functions on prime of the info.
Ramaswamy mentioned Snowflake has a transparent imaginative and prescient, with the info cloud on the heart and apps round it.
“Just delivering on that at scale with speed is what I’m going to do,” he mentioned.
The problem will likely be to keep up the corporate’s momentum.
Snowflake generates about $3 billion in annualized income, rising at about 32% a 12 months, in contrast with below $200 million earlier than Slootman changed former Microsoft govt Bob Muglia as CEO in 2019. As it tries to proceed its fast enlargement, Snowflake faces competitors from Databricks, valued at $43 billion final 12 months in an funding spherical that included Capital One, which beforehand backed Snowflake.
After Snowflake purchased Neeva, Slootman mentioned he made an effort to get to know Ramaswamy. The firm put Ramaswamy in probably the most crucial position on the time, main its AI efforts. Slootman had a realization.
“Holy s—, this is the opportunity we’ve been waiting for,” he mentioned.
Ramaswamy mentioned he is been spending loads of time with Slootman. They’ve traveled collectively to London and Berlin, together with home journeys to Arizona and Las Vegas. Ramaswamy mentioned he is held conversations with over 100 purchasers, together with many with Slootman.
Now that he is on the helm, Ramaswamy has to cope with the naysayers.
“It is no doubt concerning to see Mr. Slootman, who has a strong track record and is well regarded by investors, step down after five years in the role,” Deutsche Bank analysts wrote in a notice on Thursday, although they maintained their purchase suggestion on the inventory.
But no one has extra at stake in Ramaswamy’s success than Slootman, who stays one of many firm’s largest buyers.
“Snowflake is in an extremely good place, having Sridhar at the helm,” he mentioned.
WATCH: Part of Snowflake’s downfall is expounded to CEO Slootman’s retirement
Source: www.cnbc.com”