Icebergs floating in a Delta Lake

Welcome to Runtime! Today: how the rapid adoption of open-source storage formats is upending the Databricks/Snowflake rivalry, Salesforce warns that enterprise software is in for a slow summer, and the latest enterprise moves.

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A Datapalooza preview

Every modern enterprise company will tell you they employ a data-driven approach toward making business decisions, but an increasing number of those same companies are no longer willing to let someone else drive their data. Open storage formats are here to stay, and they have leveled the playing field for one of tech's best rivalries: Snowflake and Databricks, who will outline competing visions for the future of data over the next two weeks at back-to-back user conferences.

Enterprises are bringing open-source table formats into the mainstream this year, faced with rising costs and new opportunities to use their corporate data across a variety of tools. Data stored in those formats can sit in a low-cost storage service like AWS's S3 and be processed by a wide variety of different services, which allows a lot more flexibility and control over how companies put their data to work.

• "As data becomes more important within an organization, putting it into a centralized location where any query engine or any workflow can touch it is an advantage, as opposed to having a cloud data warehouse for marketing and a cloud data warehouse for product," said Tomasz Tunguz, general partner at Theory Ventures.
• This trend has been building for several years, but the AI boom has forced enterprises who had been sitting on the sidelines to modernize their data architectures, and most of those enterprises already work with either Databricks or Snowflake as a central part of their data strategy.
• Databricks was ahead of the open-format trend with Delta Lake, but the two companies have been converging on each other's turf for several years.
• In the years since, Iceberg has emerged as the leading format choice thanks to its reputation as the more vendor-neutral format, according to buyers and sellers of data services interviewed by Runtime.

"We are 100% behind Iceberg as the specification for open table formats," said Christian Kleinerman, executive vice president for product at Snowflake, which won't surprise anyone if it announces comprehensive support for Iceberg next week.

• Databricks also supports Iceberg, but is far more closely identified with Delta Lake and is still its biggest champion, said Jonathan Keller, vice president of product management at the company.
• "We obviously think it's the best format, [that] it provides the best range of capabilities from streaming to core data engineering to [business intelligence]," Keller said.
• But companies like Microsoft and Google are betting that in the future, customers will want data services that work with whichever format they prefer.
• If those services take off, it could calm a budding standards war before it gets out of hand and force Databricks and Snowflake to compete on the strength of their data-processing engines, as well as the security and governance features that every enterprise customer needs.

Until recently, betting on a format was a consequential decision that could lock you into a particular set of vendor tools for quite some time. But efforts like the OneTable project backed by Google and Microsoft are trying to make it easier for end users to work across formats, and last week at Build Microsoft announced a partnership with Snowflake that added support for Iceberg to Fabric, its data-analytics platform that previously only supported Delta Lake.

• "We don't really think we need to pick a horse in the race," said Arun Ulagaratchagan, corporate vice president for Azure data at Microsoft. "Why should we argue about these things? If eventually it goes one way or another, we're fine."
• Borgman agreed. As customers adopt open formats, "what happens is that we instead compete at a higher level, which I think for a while will be really the query-engine level," he said.

But there have been two main obstacles to the adoption of open formats: security and governance concerns. After all, when all corporate data is stored in a single pile, making sure that certain people have access to only certain parts of that pile gets trickier.

• Even when using mature storage technology, "it's very hard for your average enterprise to answer a question like, 'who has access to a piece of data?'" Keller said.
• Given the number of competing projects, it's likely they could head in different directions when building out those features.
• However, "we're slowly seeing the industry agree on some governance and security constructs to have representations that different entities can share," Kleinerman said.
• As Snowflake, Databricks, and their various partners compete for data business in the AI era, security and governance tools could become a much bigger selling point than support for one open format or another.

Read the rest of the full story on Runtime here.

Shaky enterprise software summer

Just when it seemed like demand for enterprise tech services was coming out of the doldrums — at least as judged by the Big Three cloud provider earnings reports — their SaaS counterparts threw some water on the fire this week with disappointing outlooks for the next few months. The generative AI boom does not appear to be lifting all of the boats.

Salesforce led the way on Wednesday, missing revenue guidance for the previous quarter and slashing guidance for the upcoming quarter, which led to the worst day for its stock in decades on Thursday. Revenue growth has slowed dramatically at Salesforce, which for some reason doesn't seem to have figured out a coherent product strategy for the AI era after showing its best product executive the door in late 2022.

But it wasn't just Salesforce: MongoDB stock fell 23% in after-hours trading Thursday after it lowered guidance for the upcoming quarter and full year. If tech budgets are being reallocated towards AI, we're starting to see which vendors are missing out.

Enterprise moves

Jan Leike is the new, uh, superalignment person at Anthropic, after leaving OpenAI in a huff over concerns it was prioritizing product development over AI safety.

Daniel Dines is once again the CEO of UiPath, taking over for former co-CEO Rob Enslin, who stepped down abruptly Wednesday causing a 30% after-hours decline in the stock of the RPA company.

The Runtime roundup

Dell doubled its sales of AI servers during its first quarter, but its stock sank on concerns about its margins.

Nutanix stock also lost ground despite beating estimates for its third quarter, after warning that it would not meet its previous guidance for fourth-quarter and full-year revenue.

A consortium of well-known enterprise tech companies announced plans to develop a competing interconnect standard to Nvidia's NVLink technology.

CoreWeave intends to go public in the first half of next year, according to The Information, hoping to cash in on the AI chip boom before it peaks.

Thanks for reading — see you Tuesday in San Francisco for Snowflake Summit!