Oracle founder Larry Ellison
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Changing of the guard

Protocol Enterprise

Hello, and welcome to Protocol Enterprise! Today: how new enterprise software upstarts are putting older tech companies out to pasture, Nvidia gets a temporary reprieve on new AI chip export restrictions and this week in enterprise moves.

What a drag it is getting old

In non-Wall Street parlance, Snowflake’s recent quarter was a blowout: sales up 83% to $497 million, with revenue now expected to reach $1.9 billion for 2022. It was a much-needed vibe shift after other enterprise tech companies like Salesforce and ServiceNow witnessed their share prices plummet after issuing muted sales forecasts for the rest of the year.

Snowflake isn’t alone: Databricks just passed $1 billion in annualized revenue and is aggressively recruiting, and earnings at Confluent and MongoDB surpassed Wall Street’s sales estimates. Even private companies like Cockroach Labs and Canva, which serve as alternatives to Oracle, Adobe and other so-called legacy companies, continue to hire, boost sales and fundraise at an impressive clip.

The results are a signal of the seismic shift underway in the world of business software: the arrival of the new IT stack.

  • “Our space is everybody’s else tomorrow,” said Dave McJannet, who, as CEO of infrastructure service provider HashiCorp, depends on the adoption of cloud-based tools like Snowflake.
  • The divergence is stark. As Snowflake, Databricks and others show no signs of slowing down, Salesforce and Microsoft reduced outlooks and are implementing cost-cutting measures like hiring freezes to bolster profitability, while Oracle is laying off workers.

Economic factors are certainly at play. In the face of a potential recession, some customers are forgoing investments in core applications — like HR systems or CRMs — in favor of data management and analytics.

  • But it’s a stark change from the course of the last three decades, when a handful of names — Amazon, Salesforce, Microsoft and Oracle, for example — seemed to dominate the discussion within IT departments.
  • In 2005, if you wanted to buy a database, options were fairly limited.
  • Now the floodgates have opened: Alongside the likes of Amazon and Microsoft — which recently took over Oracle as the largest database vendor, per Gartner — there’s a plethora of new options that customers are turning to.

For some, it’s a missed opportunity.

For others, the current struggles are simply a result of the pivot to the cloud. It’s not uncommon for architectural shifts to bring in new market dynamics.

  • The shift away from mainframes, for example, helped Oracle overtake IBM and solidify its former status as the world’s largest database vendor.
  • In today’s environment, VMware is a prime example: The company, which for 24 years has provided customers a single platform to run multiple applications or operating systems on one server, is now on the defensive in the face of a $61 billion acquisition from Broadcom, a company with a notoriously checkered history with customers.

For the new kids on the block, the future is certainly much brighter.

  • Still, as Snowflake CEO Frank Slootman once said, “Only the government can print money; the rest of us have to take it from somebody else.”

Read the full story here.

— Joe Williams (email | twitter)

A MESSAGE FROM VMWARE

VMware sits at the center of the multi-cloud universe and is focused on providing consistency across clouds, enabling choice of location and delivering best of breed capabilities. Join thousands of peers, hundreds of experts and VMware leaders at VMware Explore on the journey to remake the cloud, together.

Learn more

Enterprise moves

Over the past week, Seismic and SAP added new finance exces, Freshworks named a new president and more.

Evan Goldstein joined Seismic as CFO. Goldstein was formerly senior vice president of investor relations at Salesforce.

Dominik Asam was named CFO at SAP. Asam was formerly CFO at Airbus.

Lloyd Adams was named president of SAP North America. Adams was formerly senior vice president for SAP’s East region.

Dennis Woodside was appointed president of Freshworks. Woodside was formerly the president of Impossible Foods and COO at Dropbox.

Steven Stone joined Rubrik as head of Rubrik Zero Labs, a new data threat research unit. Stone was formerly a VP of adversary operations at Mandiant.

— Aisha Counts (email | twitter)

Around the enterprise

Nvidia will be allowed to complete development of its next-generation AI server chip, following a clarification of new chip export rules revealed Wednesday.

Micron announced plans to build a $15 billion memory chip plant in Boise, Idaho.

A MESSAGE FROM VMWARE

VMware sits at the center of the multi-cloud universe and is focused on providing consistency across clouds, enabling choice of location and delivering best of breed capabilities. Join thousands of peers, hundreds of experts and VMware leaders at VMware Explore on the journey to remake the cloud, together.

Learn more

Thanks for reading — see you tomorrow!

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