Snowflake Pricing in 2023: A Comprehensive Guide to Optimizing Snowflake Costs

Snowflake Jan 30, 2023

Introduction

The massive growth of the internet has led to an unprecedented amount of data and information being generated and stored, creating a need for efficient and effective ways to manage and analyze this vast amount of information. Amazon introduced S3 as a component of Amazon Web Services (AWS) in 2006; it was a convenient way to store files in the cloud but lacked standard data management capabilities. In the same exact year, the Apache Software Foundation introduced Hadoop. This big data technology became the de facto standard. Still, there was one drawback: Hadoop was very difficult to use and required technical expertise, and it lacked a SQL interface until the year 2010 when Hive was introduced in the market in October of that particular year (2010), which was built completely on top of Hadoop and even then it wasn't well integrated with the entire Hadoop ecosystem. Realizing that scaling big data solutions posed significant challenges, the three data warehousing experts ( Benoit Dashville, Thierry Cruanes, and Marcin Zukowski ) came together in 2012 to build a relational database management system (RDBMS) from the ground up on a cloud architecture. Just like that, there was the birth of Snowflake; they completely rearchitected an RDBMS to work with cloud-based technologies, which has led to major differentiation in speed, scale, ease of use, and flexibility in data sharing [1]. Snowflake's revolutionary technology distinguishes it from traditional analytical RDBMSs, on-premise massively parallel processing (MPP) solutions, and early cloud competitors such as Google BigQuery, AWS RedShift, Microsoft Azure, and Databricks.

Traditional data warehouse architecture has struggled to keep up with modern businesses' and organizations' increasing need to manage diverse data sources and types of data efficiently. The rigid nature of traditional data warehouse architecture, where storage and compute are tightly coupled, leads to slower processing speeds and longer waiting times for data analysis. Snowflake offers a game-changing solution to these problems with its cutting-edge, scalable architecture designed specifically for the cloud. Snowflake, in contrast to typical data warehouse architecture, separates storage and compute resources, resulting in an elastic and nearly limitless pool of resources that can be scaled independently, all under a flexible usage-based pay-as-you-go service model. This innovative approach to data warehousing offers businesses and organizations unparalleled flexibility and scalability, allowing them to easily and quickly adapt to changing data requirements and demands. Snowflake eliminates the need to worry about over-provisioning or under-provisioning resources because the platform is designed to automagically scale and optimize its usage based on the needs. It has established itself as the go-to choice for businesses and organizations seeking the best cloud-based data management. Its innovative consumption-based pricing model for data platforms has proven to be extremely successful and widely adopted. Despite its ease of use, it is essential to note that it can get expensive if it is not managed or used correctly. Nonetheless, Snowflake's cost structure is straightforward and easy to grasp; it varies depending on your requirements. To give a small and brief example, it is comparable to a plan for electricity, gas, or water consumption in which you pay for the amount of energy you consume rather than purchasing a large quantity in advance [5]. In this article, we will delve into the facts and illustrate how Snowflake's pay-per-usage pricing strategy can maximize your cost efficiency. Understanding the consumption-based usage model offered by Snowflake may be difficult at first (for those who are used to purchasing on-premises hardware and software or prepaying for cloud resources), but this article is specifically designed to simplify this concept to comprehend easily.

How much does Snowflake costs (pricing plans editions)?

Snowflake is a top-of-the-chart data solution for the cloud for several reasons. Snowflake eliminates the need for software or hardware purchases, installations, or maintenance. It offers exceptional scalability, minimum to zero latency, analytics capabilities, data management, data security, and a pay-as-you-go pricing model.

The pricing for Snowflake costs is broken down into four distinct editions, each of which offers different features and, thus, varies in cost. Customers/Users can pay for their Snowflake usage monthly with Snowflake On-Demand or Reserve capacity (Storage) in advance through Snowflake Pre-Purchase (pay for usage upfront). In a later section, we will delve deeper into how to reduce snowflake costs, including an in-depth examination of credits and credit costs. But for now, let's take a closer look at the different editions and plans available.

Snowflake Pricing Plans - Snowflake Cost Optimization
Snowflake Pricing Plans - Snowflake Cost Optimization

Standard

Standard offerings of Snowflake provide:

Standard Plan - Snowflake Pricing - Snowflake Cost Optimization
Standard Plan - Snowflake Pricing
  • Complete SQL data warehouse, a fully managed cloud-based service that allows users to store, query, and analyze large amounts of data fully using SQL.
  • Secure Data Sharing to securely share data across regions and clouds allows businesses or organizations to collaborate and share data with partners, customers, and other stakeholders.
  • Premier Support 24x365 service with dedicated support and assistance with any issues that may arise.
  • Time Travel for accessing previous versions of data and easy recovery
  • Always on enterprise-grade encryption in transit and at rest to ensure that data is always encrypted when transmitted and stored, providing an added layer of security to protect against any data breaches.
  • Customer-dedicated virtual warehouses for scaling resources and optimizing performance
  • Federated authentication allows users to authenticate to Snowflake using their existing identities, such as single sign-on (SSO) and other encrypted authentications.
  • Database replication for high availability and disaster recovery across different regions and clouds.
  • External functions for running custom code and performing advanced query calculations in the data warehouse.
  • Access to Snowsight is a web-based data visualization and exploration tool allowing users to interact with their data more interactively and intuitively.
  • Creation of a Data Exchange for developing a marketplace for data discovery, sharing, and connection to new sources.
  • Access to the Snowflake Data Marketplace is a curated collection of data from various sources, including public data sets and premium providers.

Enterprise

Snowflake's Enterprise offerings include all of the features and benefits of the standard offering, as well as the following advanced capabilities:

Enterprise plan - Snowflake Pricing Plan - Snowflake Cost Optimization
Enterprise plan - Snowflake Pricing Plan
  • Multi-cluster warehouses for increased flexibility and control over resources, scaling, and performance.
  • Up to 90 days of time travel for more robust data recovery and historical analysis.
  • Annual rekeying of all encrypted data to ensure the use of the most current encryption key.
  • Materialized views for improved performance and reduced workload by creating pre-aggregated or pre-joined versions of data, which can be queried more efficiently, improving performance + reducing the workload on the data warehouse.
  • Search optimization service for efficient indexing and searching of data more efficiently.
  • Dynamic data masking to mask sensitive data.
  • External data tokenization for tokenizing sensitive data for testing, reporting, and analytics without compromising the security of the original data.

Business Critical

Snowflake's Business Critical offerings include all of the features and benefits of the enterprise offering, as well as the following advanced capabilities:

Business Plan- Snowflake Cost Optimization
Business Plan - Snowflake Pricing Plan
  • Compliance with the Health Insurance Portability and Accountability Act (HIPAA), which is a set of rules that protects the privacy and security of personal health information.
  • Compliance with Payment Card Industry Data Security Standards (PCI DSS) for protecting the security of credit and debit card transactions
  • Tri-Secret Secure uses customer-managed keys to allow customers to use their keys to encrypt their data, which in turn provides more control and security over their data and ensures that only authorized parties have access to it.
  • Support for AWS + Azure Private Link and Google Cloud Private Service Connect, enabling private connections between Snowflake and preferred cloud providers
  • Database failover and failback for business continuity, ensuring data remains available in case of failures or outages.
  • External Functions with AWS API Gateway Private Endpoints Support allows users or customers to run custom code and perform advanced query calculations directly in the Snowflake data warehouse.

Virtual Private Snowflake (VPS)

Virtual Private Snowflake (VPS) offerings of Snowflake provide all of the features and benefits of the Business Critical offering, as well as the following advanced capabilities:

Virtual Private Snowflake- Snowflake Cost Optimization
Virtual Private Snowflake
  • Customer-dedicated virtual servers, wherever the encryption key is in memory, allow customers to have dedicated virtual servers only accessible by authorized team members. The encryption key remains only in memory, supplying an added layer of security and control over the data.
  • Customer-dedicated metadata store, enabling customers to have their dedicated metadata store( a database that stores metadata about the data and objects within the DW), providing tight control and security over their metadata and assuring that only authorized team members have access to it. This can benefit customers with strict compliance requirements or may contain very sensitive data.

But, how does the Snowflake pricing model work?

Snowflake's pricing model is usually based on the usage of its three main layers of components:

  • Storage
  • Compute
  • Cloud services
Snowflake usage layer - Storage, Compute & Cloud Service

Snowflake costs are determined based on their utilization of these different layers.

Storage

Storage is one of the key layers that customers are charged for, and it is based on the average monthly storage utilization. The storage usage is calculated after the compression, which means that even if a customer uses 1TB of storage, the amount of storage that is actually stored in Snowflake may be less than 1TB because of the compression. Hence, customers are only charged for the average amount of storage consumed per month. To take advantage of and manage the Snowflake cost reduction, users/customers must pay close attention to it. Snowflake Storage costs are an important factor to consider when using it. The monthly Snowflake costs for storing data are based on a flat rate per terabyte (TB) of consumption (after being compressed). The amount charged will depend on the Cloud Platform and the region, whether US-, Asia-, or EU-based, wherever you are located, or your account type (Capacity or On Demand)

  • On-Demand Storage: Snowflake provides an On-Demand service for customers to purchase their services in the easiest and most flexible way, which is exactly similar to Amazon AWS or GCP, on which customers are charged a specific rate for the consumed services they are billed every month. For example, the On-Demand storage rate for AWS – US East (Northern Virginia) customers is $40 per Terabyte per month whereas $45 dollar per Terabyte per month for customers who deployed in European Union: EU region. You can calculate your cost yourself from here.
  • Capacity Storage: Snowflake also provides customers with the option to pre-purchase capacity, which involves a dollar commitment to Snowflake, which offers more service options, lower prices, and a long-term price guarantee. The cost of Snowflake credits for a capacity purchase is determined at the time of order placement and is based on the size of the customer's total commitment. Usage is calculated monthly based on average storage, data transfer cost, and Snowflake credit usage. Customers are notified/alerted whenever they have used up 70% of their capacity usage. The customer's plan will transition to On-Demand pricing once their pre-purchased Capacity storage has been fully utilized. The Capacity storage rate is ~$23 per Terabyte per month for customers located in the United States and ~$24.50 per Terabyte per month for customers located in the European Union region. The cost of Snowflake Credits for capacity purchases is determined upon ordering and is actually based on the size of the total committed customer purchase.

More on Snowflake costs, Snowflake credit costs, and individual Snowflake storage costs will be covered in a later section; for now, let's try to focus on what a Snowflake credit actually is.

So wait, what exactly is Snowflake credit?

Snowflake credit is a measuring unit used to determine a customer's usage of various services, including virtual warehouses, cloud services, and serverless features [4]. All of these services are quantified in the form of Snowflake credit. Snowflake cost optimization is achieved by understanding how these credits are charged based on consumption. Let's dive into how the credits are charged based on consumption. First, let's start with the virtual warehouse.

Note: The pricing rate for credits varies depending on the edition(plans) of Snowflake being used, which can be standard, enterprise, or business-critical. Each edition offers a distinct set of features.

Virtual Warehouse

Snowflake offers a variety of virtual warehouse sizes for users to choose from, which includes such as X-Small (extra small), Small, Medium, Large, X-Large (extra large), 2X-Large (2 times extra large), 3X-Large (3 times extra large), and 4X-Large(4 times extra large), (5XL and 6XL are in preview). The cost of using these warehouses is based on utilization, with different credit rates assigned to each warehouse size.

Snowflake Cloud Data Platform - Snowflake Cost Optimization
Snowflake Cloud Data Platform - Warehouse Sizes and Credit Usage

For example, using an X-Small (extra small) virtual warehouse for 1 hour will cost one Snowflake credit, while using a small virtual warehouse for 1 hour will cost 2 credits. Similarly, using a medium virtual warehouse for 1 hour will cost 4 credits, and using a 4X-Large virtual warehouse for 1 hour will cost 128 credits. This shows the significant Snowflake costs difference between the various different warehouse sizes, with the extra small virtual warehouse costing 127 times fewer credits than the 4X-Large virtual warehouse.

The cost of using a Snowflake virtual warehouse can vary significantly based on its size and the duration of its use. For instance, using an X-Small virtual warehouse for 4 hours will cost 4 credits, while using a 4X-Large virtual warehouse for the same amount of time will cost 512 credits. It's essential to keep in mind that as you increase the compute capacity of your virtual warehouse by increasing its size, credit usage will also increase at a directly proportional rate. The performance improvement of Snowflake with increased warehouse size may not always be linear because it depends on various factors such as the complexity of the query, the distribution of the data, and the available resources. The performance may initially increase as the warehouse size grows, but it may eventually level off and reach a point where further scaling has limited impact.

Snowflake credits are billed for usage by the second, with a near-instant auto-stop and near-instant auto-resume feature that helps you avoid paying for resources you don’t need [3]. Snowflake allows workloads to scale independently with their own dedicated compute resources and eliminates data silos for enhanced usability. All queries run automatically on the virtual warehouse, where launched and unused virtual warehouses can be suspended, halting charges for idle compute time. Suspending, resuming, increasing, or reducing compute resources is nearly instantaneous, allowing users to match their spending with actual usage without unexpected demand or capacity planning. Compared to other Cloud data platforms, the termination of services results in the automatic deletion of data from the warehouse, making it very time-consuming and costly if you happen to have to reload data later on. So, these cloud platforms are typically left on and active 24 hours a day, 7 days a week, resulting in hefty charges even with no usage, but Snowflake is different; it is designed to allow for the seamless restart of a paused virtual warehouse with a completely new query, eliminating the need for manual reprovisioning and avoiding any kind of unnecessary hefty charges.

X-small:

1 hour = 1 Credit

1 minute = 1/60 Credits = 0.02 Credits

1 second = 0.02/60 Credits = 0.003 Credits

Small:

1 hour = 2 Credits

1 minute = 2/60 Credits = 0.033 Credits

1 second = 0.033/60 Credits = 0.00055 Credits

Medium:

1 hour = 4 Credits

1 minute = 4/60 Credits = 0.067 Credits

1 second = 0.067/60 Credits = 0.00111 Credits

Large:

1 hour = 8 Credits

1 minute = 8/60 Credits = 0.133 Credits

1 second = 0.133/60 Credits = 0.00222 Credits


X-Large:

1 hour = 16 Credits

1 minute = 16/60 Credits = 0.267 Credits

1 second = 0.267/60 Credits = 0.00444 Credits

2X-Large:

1 hour = 32 Credits

1 minute = 32/60 Credits = 0.533 Credits

1 second = 0.533/60 Credits = 0.00889 Credits

3X-Large:

1 hour = 64 Credits

1 minute = 64/60 Credits = 1.067 Credits

1 second = 1.067/60 Credits = 0.017783 Credits

4X-Large:

1 hour = 128 Credits

1 minute = 128/60 Credits = 2.133 Credits

1 second = 2.133/60 Credits = 0.03555 Credits


Cloud Services

Cloud service layers offer multiple services like authentication, authorization, query calculation, SQL API, performance tuning, analytics security features—and much more. Because these features are provided by default, Snowflake does not charge customers directly for them. But it will charge based on the specific condition. Snowflake automatically assigns cloud services based on the requirements of the workload. Typical utilization of cloud services, up to 10% of daily compute credits, is included for free, meaning most users and customers won't see incremental charges for cloud service usage. Assume you have a virtual warehouse and have spent “A” credits. Consider cloud service layer credit to be “B” credit; if it is within 10% of the “A”, it will not be charged to the customer; if it exceeds 10% of the daily computing credit, it will be charged to the customer; otherwise, it will be free to use.

Conversion of Snowflake credits to the actual price

So far, we have seen on what basis Snowflake charges its customers, but let's actually see how these Snowflake credits are converted into the dollar (actual price). Assume you have hosted your Snowflake account on GCP in the US-Central region; as we have mentioned earlier, Snowflake offers different editions, so your Snowflake costs or pricing rates depend on the cloud platform you choose, the server region you select, and the edition/plans you have chosen. Snowflake cost optimization can be actually achieved by selecting the right edition and cloud platform that best fits your usage patterns. As you can see in the screenshot below, the standard edition Snowflake is charging $2 dollars per credit, whereas if you choose the enterprise edition, you will be charged $3 dollars per credit, and for business-critical, it is charging $4 dollars per credit. These dollar rates differ from cloud to cloud, server range, and edition to edition, so this is how the compute power will be charged. As for Snowflake storage cost, the On-Demand storage cost is calculated based on the average monthly consumption of the compressed storage, which you can see is around $40 per terabyte per month in the US and $45 per terabyte per month in the EU region. On-Demand Storage Snowflake Credits pricing varies based on the type of service needed, with standard services costing around $2.00 in the US and $2.70 in the EU. Adding Premier Support raises the cost per credit to $2.25 in the US and $3.00 in the EU. Enterprise services pricing is not listed, requiring users to contact Snowflake for a quote. And next to it there, you can see the other option called "Capacity Storage". It is nothing but buying the storage upfront, so if you are fully aware of how much Snowflake storage you are going to consume, then it is definitely okay to buy this option upfront so that you can save a lot of spending as you can see the difference for yourself—it only costs around ~$23 per Terabyte per month for customers located in the United States(US) and ~$24.50 per Terabyte per month for customers located in the European Union(EU) region. The price of Snowflake Credits for "Capacity Storage" purchases is determined upon ordering and is actually based on the size of the total committed customer purchase.

Cost per credit - Snowflake Pricing - Snowflake cost optimization
Cost per credit - Snowflake Pricing

Optimizing Snowflake Costs

The On-Demand, pay-as-you-go model is an excellent starting point for new Snowflake users. This model provides a flexible and cost-effective solution for resource allocation management. You only pay for the resources you use with pay-as-you-go, and you can monitor your usage and costs in real-time, giving you a better understanding of your needs, which is crucial in making informed decisions about your resource allocation and ensuring you don't over-provision or under-provision. According to Appvizer, pay-as-you-go provides a tremendous amount of flexibility and cost-effectiveness. The pay-as-you-go model is very beneficial for users because it allows you to get up and running quickly without making any kind of long-term commitment. You can start small and grow as needed, only paying for what you use. Once you've figured out your usage patterns and resource requirements, consider switching to Snowflake Pre-Purchased, which offers more significant savings for longer-term commitments.

To effectively monitor your Snowflake spending + Snowflake costs and achieve Snowflake cost optimization, it's important to use a robust dataops observability platform. Snowflake's resource monitor can be useful, but it may not provide the granular level of detail or comprehensiveness you need. One solution to solve it is by using DataOps observability tools like Chaos Genius, which can provide a deeper understanding of your Snowflake spending and help you break down costs into meaningful insights.

Chaos Genius Homepage
Chaos Genius Homepage
Chaos Genius Dashboard
Chaos Genius Dashboard

With the help of Chaos Genius, you can analyze workloads, optimize Snowflake spending + Snowflake costs, leading to improved Snowflake query performance. It also saves up to 30% on data costs by offering complete visibility into Snowflake workflows. It also provides unmatched speed, flexibility, and cost-effectiveness when monitoring your own Snowflake resources. You can also use Chaos Genius to determine which specific features and products are driving your massive Snowflake spending and analyze it precisely; this allows you to identify where costs are leaking and take steps to cut them down without degrading any performance. Not only that, it provides features like real-time alerts so that you can get alerts and notifications for relevant cost anomalies in real-time, allowing you to take action quickly to address any issues ASAP!!

Tired of feeling in the dark about your Snowflake spending?? Let Chaos Genius shine a light on the situation and help you to make informed decisions about where and how to optimize costs. Schedule a demo with us today and see the difference it can make. Don't wait; click this link to schedule your demo right now!!!

Conclusion

Snowflake has revolutionized the entire cloud data industry with its game-changing, top-of-the-chart technology. With its cloud-based Software-as-a-Service (SaaS) platform and consumption-based pricing model, businesses and organizations are given almost unlimited scale, flexibility, and ease of use. Despite rumors of high costs, Snowflake's pay-per-usage pricing model can help maximize productivity and minimize spending. While understanding the consumption-based usage model may seem daunting initially, this article aims to simplify the concept for easy comprehension. We covered Snowflake's four distinct pricing editions and plans and their features and dove into its pricing model based on usage. We discussed how spending could be optimized in Snowflake using the help of tools like Chaos Genius.

References

[1] Joshi, B. B., Lindstrom, B., Chirumamilla, R., Soni, R., Videkar, S., & Bell, F. (2021). Snowflake Essentials: Getting Started with Big Data in the Cloud. Apress.

[2] WHY A MULTI-CLOUD, CROSS-CLOUD STRATEGY MAKES SENSE FOR GOVERNMENT ORGANIZATIONS. (n.d.). Snowflake. Retrieved January 24, 2023, from https://www.snowflake.com/wp-content/uploads/2021/10/eBook_MultiCloud_CrossCloud_Strategy_Gov_Org_Final-Sep2020.pdf

[3] Reichman, A. (2022, May 5). How Usage-Based Pricing Delivers a Budget-Friendly Data Cloud. Snowflake. Retrieved January 24, 2023, from https://www.snowflake.com/blog/how-usage-based-pricing-delivers-a-budget-friendly-cloud-data-warehouse/

[4] Understanding Compute Cost — Snowflake Documentation. (n.d.). Snowflake Documentation. Retrieved January 24, 2023, from https://docs.snowflake.com/en/user-guide/cost-understanding-compute.html#what-are-credits

[5] Degnan, C. (2021, September 16). Consumption-based Pricing: Ensuring Every Customer's Success | Blog. Snowflake. Retrieved January 24, 2023, from https://www.snowflake.com/blog/consumption-based-pricing-ensuring-every-customers-value-and-success/

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