Snowflake Reportedly Plans $1 Billion Acquisition of Startup Observe

According to reports, Snowflake is in talks to acquire Observe, a startup offering a cloud-based observability platform.

A report from The Information on Tuesday stated that, based on sources, the deal could be valued at around $1 billion if finalized. This would mark Snowflake's largest acquisition of a startup to date.

Companies use Observe’s platform to monitor infrastructure issues such as latency spikes, server outages, and other technical disruptions. Engineers can investigate incidents using a built-in chatbot by entering natural language prompts. For instance, a developer might ask Observe to determine whether a database failure was triggered by changes in underlying server configurations.

Observability tools typically rely on SQL queries to analyze telemetry data collected from systems. In contrast, Observe employs a proprietary query language called OPAL. The company claims this technology is particularly effective at incorporating time-based context into analysis. With OPAL, Observe can retrieve error logs generated during a specific 60-minute window and compare them with data from the previous hour.

One of the supported use cases involves monitoring Snowflake environments. Customers can configure Observe to detect suspicious data access attempts, insecure user accounts, and opportunities to reduce infrastructure costs. The software also supports debugging containerized applications deployed on Snowflake via its Snowpark Container Services.

Collaboration between the two companies is already underway. Observe has built its platform on top of Snowflake to store telemetry data collected from customer environments. Conversely, Snowflake participated in Observe’s latest funding round through its venture arm. That round, announced in June, raised $156 million for Observe. At the time of the announcement, the company revealed its revenue had tripled year-over-year, while its number of enterprise customers doubled. This rapid growth helps explain why Snowflake’s reported $1 billion offer exceeds the total capital Observe has raised since its founding in 2017 by more than threefold.

The potential acquisition would position Snowflake as a competitor to established observability providers like Splunk. On its website, Observe states its solution offers greater cost efficiency compared to rival platforms, including those owned by Cisco Systems. It also promises to streamline certain telemetry management workflows.

News of Snowflake’s interest in acquiring Observe comes shortly after its most recent startup purchase. In mid-November, the company acquired Datometry, a startup whose tool simplifies migrating applications from competing platforms to Snowflake, though financial terms were not disclosed.