Are cloud data warehouses commodities?

Today: Fivetran CEO George Fraser's bet that data connectivity is more important than data residency, Microsoft joins the cloud breakup-fee party, and the latest enterprise moves.

Are cloud data warehouses commodities?
Photo by Adrian Sulyok / Unsplash

Welcome to Runtime! Today: Fivetran CEO George Fraser's bet that data connectivity is more important than data residency, Microsoft joins the cloud breakup-fee party, and the latest enterprise moves.

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Connecting the dots

George Fraser, co-founder and CEO of Fivetran, holds a PhD in neuroscience from the University of Pittsburgh but has spent the last 12 years building links between the original sources of corporate data and the storage facilities that help companies to extract meaning from that data. Fivetran calls them "connectors," and last week the company unveiled its 500th connector that can pull data from a variety of household-name enterprise tech products and move it to the data warehouse of your choice.

In a recent interview, Fraser also pronounced the death of Hadoop, compared Fivetran to Stripe, and pledged to remain an independent company through an eventual IPO.

On the evolution of the data stack:

Fraser: If you look at Snowflake, Databricks, BigQuery, you name it, they all really work the same way under the hood when they're executing queries against relational data, which is a lot of the workload. If you're doing data frame stuff, it's a different creature. But for that core use case, there's been a lot of convergence around the same idea in the last few years.

The more significant decision is, "what is your strategy for centralizing the data?" Because these data platforms do not do that; they are the place that it gets centralized to, but they do not centralize anything. And how you do that is incredibly consequential.

If you do that badly, you will generate so much downstream work from the teams working on these datasets chasing data integrity, bugs, and incomplete datasets. But the problem that actually caused it all is upstream, it's creating a single view of the world. If your connectivity is not good, then everything else suffers.

On generative AI's effects on Fivetran:

We have some customers who are big players in that agency, they have grown a lot. [But] we don't always know what people are doing with the data, which is a funny position. We're the ones who move the data, we don't really know what workloads are running on top of it.

Undoubtedly, lots of people are doing generative AI workloads on top of data that Fivetran delivers. For example, we have a Slack connector that will replicate all of the entire Slack message history for your organization into your data warehouse. I'm sure someone is using it for [generative AI], but they don't feel the need to tell us, we're the ones who centralize the data. 

People embed us; there's a whole category of companies that use Fivetran for data movement under the hood. You see companies building tools or AI-based products that have data connectivity as part of their needs will use Fivetran internally to solve that problem. And sometimes you can't even tell; you'll sign up for a product — there's lots of things that work like this — it says, "okay, connect to your Salesforce to ingest that data," and when you click through, and you're actually clicking through Fivetran. It's sort of like Stripe.

On a future IPO:

The goal is to build a long standing independent company, and that means going public when the time is right. We think there's a lot of value to the world in having a data movement vendor that is not tied to any one of the platforms and hyperscalers, because real large companies have lots of data platforms

I think the number one thing we're trying to do right now is get people to focus on this decision: Think hard not just about where does your data go, or where do you analyze it, but think about your data pipeline, think about data movement. That's actually the most consequential decision you're going to make in your data stack, because if you do it well or badly, the benefit or cost of that will ripple down to all the other layers multiplied by 1000.

Read the rest of the full interview here on Runtime.

Breaking up, now easy

Microsoft joined Google Cloud and AWS this week by eliminating fees that customers paid to remove all their data from Microsoft Azure. That inevitable move, which comes mostly in response to the European Data Act, applies to "customers leaving Azure when taking their data out of the Azure infrastructure via the internet to switch to another cloud provider or an on-premises data center," the company said in a blog post Wednesday.

As with Google and AWS, Microsoft customers who wish to take advantage of this free offer must meet some terms and conditions, such as only becoming eligible for the credit after "all Azure subscriptions associated to the account have been canceled," according to the blog post. Like its rivals, Microsoft also left unaddressed the costs that otherwise happy Azure customers incur for moving data between Azure and other destinations on the internet, which is the real pain point for enterprises with more than one cloud provider relationship or on-premises data centers.

I'm not sure how many people who cover enterprise tech read this newsletter, but please, I'm begging you: Stop describing these moves as a decision to end "egress fees," which remain alive and well across all major cloud providers. What we are talking about here are "breakup fees," and while it's somewhat noble to make it easier for a customer to nuke its relationship with a vendor, it's not anything that changes the day-to-day reality of cloud computing.

Enterprise moves

Adaire Fox-Martin is the new CEO of Equinix, joining the data-center provider from her most recent stint as president of Google Cloud's go-to-market team.

Thomas Wyatt and Inbal Shani are the new president of Twilio's Segment and chief product officer of Twilio Communications, respectively.

Phil Coady is the new chief revenue officer at Dataiku, joining the company from Bionic, which was recently acquired by Crowdstrike.

Joan Jenkins is the new chief marketing officer at Mindtickle, after serving as CMO at Blueshift.

Mike Haas and Leo Zheng are the new chief revenue officer and chief marketing officer, respectively, at Astronomer.

Pravjit Tiwana is the new general manager and senior vice president of storage at NetApp, joining the company after serving as CTO at Gemini.

The Runtime roundup

Microsoft customers that want to use its Copilot for Security will pay by "security compute unit," rather than the per-seat pricing that it has rolled out for most of its other generative AI tools.

Wiz acquired Gem Security for $350 million, adding a fellow Israeli startup known for cloud security to its portfolio.

Zscaler also snapped up an Israeli security startup, also paying $350 million for Avalor, which manages security data.

Databricks announced plans to invest in Mistral and integrate several of its large-language models into its data platform.

West African internet users reported widespread outages after several undersea cables were damaged, with no immediate cause identified.

Thanks for reading — see you Saturday!

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