Redshift, Amazon's cloud data warehouse, gives AWS the ability to lock customers in to its suite of services. While Amazon clearly benefits from Snowflake's big checks, it has conflicting incentives. Net loss in the quarter narrowed to $77.6 million from $93.4 million. Revenue surged 121% in the second quarter from a year earlier to $133 million, and its gross margin increased to 62% from 53%. Snowflake's bottom line is moving in the right direction. Slootman said in the investor presentation that Microsoft is "our second biggest and also our fastest-growing platform." In addition to its Amazon contract, Snowflake has an agreement with a different unnamed cloud provider to spend at least $550 million over 64 months, which works out to $103 million per year. "Cost of product revenue consists primarily of third-party cloud infrastructure expenses incurred in connection with our customers' use of our platform and the deployment and maintenance of our platform on public clouds," the filing says. In its prospectus, Snowflake said the "cost of product revenue" accounted for 94% of its total cost of sales. To bolster its gross margin, or the percentage of revenue left after subtracting the cost of goods sold, Snowflake's sales have to grow faster than its cloud costs. In the contract's first year, which ends in July, Snowflake is required to spend $115 million on cloud infrastructure, a number that climbs to $350 million by 2025. But we are now trending better with all three." Big payouts to Amazon It can be frustrating, sometimes even bewildering, from one day to the next. "We are becoming large customers and consumers of public cloud capacity, as well as partners and competitors, all at once. "The relationships with the public cloud companies is one of frequent inquiry," Snowflake CEO Frank Slootman said in his videotaped presentation for investors. That could concern investors who have seen Amazon use pricing power in its dominant consumer and enterprise businesses to drive out competition. But AWS is still, by far, Snowflake's biggest vendor. To lessen its reliance on AWS, Snowflake is also using cloud services from Microsoft and Google. At the same time, AWS is making heavy engineering and promotional investments in its own competitor, Redshift. Snowflake sells a database in the cloud that primarily relies on infrastructure from Amazon Web Services and has committed to spending $1.2 billion on technology from AWS over five years. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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