As data collection and activation capabilities continue to proliferate businesses become more reliant on cloud data warehousing solutions to store, process, and analyze vast amounts of data. One popular data warehousing solution is Snowflake Data Cloud. Snowflake offers a powerful and scalable platform that promises to revolutionize how organizations manage and analyze their data.

However, many businesses who’ve migrated to Snowflake, often encounter unexpected cost escalation. This is a significant challenge, especially for organizations with tight budgets.

In this article, we’ll unpack Snowflake’s cost structure, its broken promise of scalability and cost-efficiency, and how to reign in those rising costs.

Components of Snowflake Costs

To effectively manage and optimize Snowflake costs, it is crucial to understand the different components that contribute to your overall expenses. Snowflake costs can be broadly categorized into three main areas: data storage, compute (virtual warehouses), and cloud services like data transfer and serverless capabilities.

Storage

Data storage costs are incurred based on the amount of data stored in Snowflake. Snowflake offers multiple storage tiers, each with different pricing structures. It is essential to analyze your data usage patterns and choose the most cost-effective storage tier for your organization.

Compute

Compute costs are associated with the virtual warehouses in Snowflake. Virtual warehouses provide the processing power to run queries and perform data transformations. The size and number of virtual warehouses directly impact your compute costs. It is crucial to right-size virtual warehouses based on your workload to avoid unnecessary expenses. 

Cloud Services

Cloud services costs include data transfer fees, serverless capabilities, and other services utilized within Snowflake. These costs can vary depending on the volume of data transferred in and out of Snowflake and the extent to which serverless capabilities are utilized. Keeping an eye on these costs and optimizing their usage can lead to significant savings.

The Broken Promise of Scalability and Cost-Efficiency in Snowflake

While Snowflake promises scalability and cost-efficiency, many organizations have experienced unexpected cost escalation. This is attributed to several factors that are often overlooked during the planning and implementation stages.

Inefficient Data Storage Practices

One common cause of cost escalation is inefficient data storage practices. Snowflake offers different storage tiers, each with its own pricing structure. Organizations that fail to optimize their data storage strategy may end up incurring higher costs than necessary. It is essential to analyze data usage patterns and leverage the appropriate storage tier to minimize expenses.

Virtual Warehouse Sizing

Another factor contributing to cost escalation is the improper sizing of virtual warehouses. Snowflake allows organizations to scale their compute resources up or down based on demand. However, if virtual warehouses are not sized correctly, businesses may end up paying for unused or underutilized resources. Even though Snowflake bills on a per-second of usage basis, unoptimized instances are one of the many culprits of unexpected cost overruns. It is crucial to monitor and adjust the size of virtual warehouses to match the workload.

Impact of Data Transfer & Serverless Capabilities

Lastly, organizations may overlook the impact of data transfer and serverless capabilities on their costs. Data transfer fees can add up quickly, especially if large volumes of data are transferred in and out of Snowflake. Similarly, serverless capabilities, while convenient, can result in higher costs if not used judiciously. It is crucial to monitor and optimize these services to avoid unnecessary expenses.

Real-life Example of Cost Escalation in Snowflake Data Cloud

To illustrate the real-world impact of cost escalation in Snowflake Data Cloud, let’s take a look at a case study involving a marketing data services company. This company had recently migrated its data infrastructure to Snowflake, expecting scalability and cost-efficiency. However, they soon realized that their costs were spiraling out of control.

While expecting an annual operating cost of approximately $300,000, their CFO was shocked when their first-year opex came in north of $3,000,000 – over 10X what was budgeted. Upon closer analysis, it was discovered that the organization had not optimized its data storage strategy. They were storing all their data in the most expensive storage tier, resulting in significant expenses. Additionally, their virtual warehouses were oversized, leading to a waste of resources and unnecessary costs. 

Offsetting Snowflake Costs with Pre-Processing

To offset Snowflake costs and gain control over your data infrastructure expenses, organizations can leverage Aqfer for pre-processing their data. Aqfer provides a comprehensive data management platform that helps businesses optimize their data storage, processing, and analysis workflows.

For example, one Aqfer client deals with trillions of records each quarter. Storing all of this volume for analysis in Snowflake is not cost-effective. Each day, they will typically ingest files that are multiple terabytes. Aqfer helps them collate and harmonize these large files to focus only on what is truly important to them – and reduces the output of these files down to less than 10 GBs. From there, they can place these files anywhere across their data ecosystem that they like for downstream uses. 

By leveraging Aqfer’s pre-processing capabilities, organizations can reduce costly compute cycles and the amount of data stored in Snowflake, leading to significant cost savings. Aqfer’s platform enables efficient data transformation and aggregation, ensuring that only relevant and actionable data is ingested into Snowflake.

Stop Sending Your Profits to Snowflake

Navigating unforeseen cost escalation in Snowflake Data Cloud can be daunting for organizations. However, by understanding the different components of Snowflake costs and implementing cost management strategies, businesses can effectively offset their expenses.

By reclaiming control over their data infrastructure costs with Aqfer, organizations can gain predictability and scalability while ensuring cost efficiency.  Schedule a consultation with one of Aqfer’s experts today to get a candid review of your cloud stack and a no-obligation recommendation on how to offset Snowflake Data Cloud costs.