Tech News

Snowflake’s Slootman says he’s not worried about employee exodus: ‘It’s not a personal cult’

[ad_1]

Frank Slootman, President of Snowflake, attends the Snowflake Summit 2022 in Las Vegas on June 14, 2022.

Snowflake | Via Reuters

News from Snowflake CEO Frank Slootman retirement triggered an 18% drop in the company’s stock price on Thursday, its biggest selloff since the data analytics software maker debuted on the New York Stock Exchange in 2020.

Slootman’s departure was announced Wednesday evening as part of Snowflake’s quarterly earnings report, which included disappointing guidance. Analysts at Mizuho Securities wrote in a note that the stock is being hammered “as investors digest the resignation” of Slootman, who joined the company in 2019 and led the company throughout its mandate. successful IPO the next year.

While the announcement caused consternation on Wall Street, Slootman told CNBC that he wasn’t worried about a wave of Snowflake employees following him out the door.

“It’s not personal worship, okay?” » said Slootman.

Slootman, 65, succeeds a former Google advertising chief Sridhar Ramaswamy, who joined Snowflake in June via the company’s $185 million purchase from Neeva, a startup that Ramaswamy co-founded in 2019.

Snowflake is the third enterprise technology company that Slootman directed through the IPO process, after Data Domain in 2007 and ServiceNow in 2012. Snowflake scored its biggest financial windfall. He controlled about 6% of the company’s stock at the time of the IPO and owned 10.6 million shares as of Feb. 9, a stake currently worth about $2 billion.

Additionally, Slootman’s total compensation in 2023 was $23.7 million, almost entirely from stock and option awards.

Before joining Snowflake, Slootman spent approximately six years as CEO of ServiceNow. He told CNBC that ServiceNow has continued to thrive since his departure. Annualized revenues grew from $1.5 billion to almost $10 billion.

“Some of the people I hired are still here — quite a few of them, actually,” Slootman said. “There are new ones too, obviously.”

ServiceNow’s workforce stood at 23,668 people at the end of 2023, up from 603 in December 2011, months after Slootman’s arrival, according to regulatory filings.

“We got ServiceNow up and running. We also did that with Snowflake,” said Slootman, who remains president.

Taking three companies through significant and successful exits is a rare technological feat and has earned Slootman much praise. But he also gained attention for wading into controversy over issues such as the tech industry’s focus on diversity. In 2021, as corporate America suffered the consequences of the murder of George Floyd, Slootman emphasized that diversity should not trump merit. He later apologized.

In his 2022 book “Amp It Up,” Slootman gave advice to executives on how to raise standards within companies, citing Steve Jobs’ insistence on greatness in Apple. “Don’t let evil take hold,” he wrote.

Outgoing and incoming Snowflake CEOs discuss results with Jim Cramer

Founded in 2012, Snowflake built a cloud-based data warehouse to store and analyze business information. The company now wants to help its customers create artificial intelligence models and applications from data.

Ramaswamy said Snowflake had a clear vision, with the data cloud at the center and the applications around it.

“I’m just going to make this happen at scale and quickly,” he said.

The challenge will be to maintain the dynamics of the company.

Snowflake generates about $3 billion in annualized revenue, growing about 32% annually, up from less than $200 million before Slootman replaced the old one. Microsoft Bob Muglia as CEO in 2019. As it attempts to continue its rapid expansion, Snowflake faces competition from Databricks, valued at 43 billion dollars last year as part of an investment round that included Capital One, which previously supported Snowflake.

After Snowflake purchased Neeva, Slootman said he made an effort to get to know Ramaswamy. The company gave Ramaswamy the most critical role at the time, leading its AI efforts. Slootman had a realization.

“Holy shit, this is the opportunity we’ve been waiting for,” he said.

Ramaswamy said he spent a lot of time with Slootman. They traveled together to London and Berlin, as well as domestic trips to Arizona and Las Vegas. Ramaswamy said he has had conversations with more than 100 customers, many with Slootman.

Now that he is at the helm, Ramaswamy must face the naysayers.

“It is undoubtedly worrying to see Mr. Slootman, who has a strong track record and is well-regarded by investors, resign after five years in this role,” Deutsche Bank analysts wrote in a note on Thursday, while maintaining their purchase. recommendation on the stock.

But no one has more of a stake in Ramaswamy’s success than Slootman, who remains one of the company’s biggest investors.

“Snowflake is in a very good position, with Sridhar at the helm,” he said.

WATCH: Part of Snowflake’s downfall has to do with CEO Slootman’s retirement

Part of Snowflake's downfall has to do with CEO Frank Slootman's retirement: Jefferies' Brent Thill

[ad_2]

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button