Snowflake reportedly seeking to acquire observability startup Observe for $1B – News

Snowflake Inc. is reportedly in talks to acquire Observe Inc., a startup with a cloud-based observability platform of the same name.

The Information on Tuesday cited sources as saying that the acquisition will be worth about $1 billion if it materializes. That would make the deal Snowflake’s largest-ever startup purchase.

Companies use Observe’s platform to monitor their infrastructure for latency spikes, server outages and other technical issues. Engineers can investigate incidents by entering prompts into a built-in chatbot. For example, a developer could ask Observe to check whether a database outage was preceded by change to the underlying server’s configuration.

Observability tools usually query the telemetry they collect about a technical issue with SQL. Observe, in contrast, uses a custom query syntax called OPAL. The company says that the technology is better at taking time into account when running analyses. OPAL enables Observe to perform tasks such as retrieving error logs generated in a specific 60-minute interval and comparing them with data from the previous hour.

One of the use cases that the platform supports is monitoring Snowflake environments. Customers can configure Observe to look for malicious data access requests, insecure user accounts and opportunities to reduce infrastructure costs. The software also lends itself to debugging containerized applications deployed atop Snowflake using the cloud data platform’s Snowpark Container Services component.

The companies’ partnership extends to other areas as well. Observe built its platform atop Snowflake, which it uses to store telemetry collected from customer environments. Snowflake, in turn, backed Observe’s most recent funding round through its venture capital arm. The raise was disclosed this past June and netted the company $156 million.

At the time of the round’s announcement, Observe revealed that its revenue had tripled over the preceding year. The company’s enterprise customer count doubled in the same time frame. That rapid growth explains why Snowflake’s acquisition offer is reportedly worth $1 billion, which is more than triple the amount of funding Observe has raised since its 2017 launch.

The deal would put Snowflake into competition with incumbent observability providers such as Splunk. On its website, Observe says that its platform is more cost-efficient than the Cisco Systems Inc. unit’s competing platform. The former company also promises to simplify certain telemetry management tasks.

The report that Snowflake hopes to buy Observe comes a few weeks after its latest startup acquisition. In mid-November, the company bought Datometry Inc. for an undisclosed sum. The startup developed a tool that makes it easier to move applications to Snowflake from competing platforms. 

Photo: Snowflake