Follow the data

Databricks’ milestone

At a time of global instability and economic concerns, here’s one thing you can take to the bank: We’re going to generate more data next year than we did this year.

That means it’s a good time to be in the data-management business, as Ali Ghodsi knows. The CEO of Databricks announced Friday that his company has surpassed $1 billion in annualized revenue, more than double the $350 million in annualized revenue it reported just two years ago .

• Databricks sells what it calls a data lakehouse service, an update on the old concept of data warehouses that were designed to store lots of infrequently accessed but still important information.
• Those services were designed for the cloud era, which requires more flexibility and customization than older data warehouses could handle.
• The company also helps other businesses manage machine-learning and data-science activities, which nearly every business at least says they want to do, even if they’re just getting started.

But Databricks is not alone in this market.

• Snowflake, which two years ago pulled off the most lucrative IPO in software history , has lost a little of its luster with Wall Street but generated almost $400 million in revenue during its first quarter, a 84% jump compared to the previous year.
• Confluent has also enjoyed success helping customers process real-time data, which both Databricks and Snowflake are also pursuing.
• And, of course, there can be no discussion of cloud-based data services without mentioning AWS, Microsoft and Google Cloud, all of which offer similar services to help modern businesses manage their data.

Databricks spent much of 2021 fielding questions about an IPO , which have understandably faded this year given the correction in enterprise tech stocks over the first half of the year.

• But there’s no question Databricks is headed down that path eventually, which will give it the funds and status needed to make bigger and bigger bets on the future of data.
• Ghodsi told The Wall Street Journal that Databricks is also thinking about making a few acquisitions, given that it still has a lot of cash in the bank from previous funding rounds.

As companies wade further into data-intensive practices like machine learning and observability, they’ll generate more data than they know what to do with.

• The long-term question concerning Databricks and its cohorts is how much of that opportunity the cloud providers will let them have.

— Tom Krazit ( email | twitter )

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Alibaba’s slow growth

China’s Alibaba Group yesterday reported its cloud revenue climbed 10% year-over-year to the U.S. equivalent of about $2.64 billion for the quarter that ended June 30. That includes revenue from Alibaba Cloud, the world’s fourth-largest cloud provider with a 5% share of the infrastructure services market, and DingTalk, Alibaba’s digital collaboration workplace and application development platform. The cloud division’s net loss from operations narrowed to $193 million, from about $243 million in the prior-year period.

The cloud division’s revenue reflected recovering growth from customers in non-internet-related industries, primarily financial services, the public sector and telecommunications, according to a regulatory filing . Cloud growth was offset by a decline in revenue from Alibaba’s top internet-related customer, an unnamed company that’s gradually stopped using its overseas cloud services for its international business due to “non-product-related requirements,” a drop in business from online education customers and softening demand from other customers in China’s internet industry, the company said. Non-internet-related industries accounted for 53% of Alibaba’s cloud revenue, an increase of five-plus percentage points compared to the same period last year.

Alibaba Cloud in June introduced a new cloud infrastructure system to power its data centers. The Cloud Infrastructure Processing Unit is expected to lead to performance improvements in networking, storage, security and computing power by offloading virtualization functions from servers to dedicated hardware, the company said.

Around the enterprise

It’s not just Intel: Chip sales are slowing around the world, according to Bloomberg .

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