This article was written by Dan Wright and originally appeared on the DataRobot Blog here: https://www.datarobot.com/blog/long-live-the-new-data-stack/
When I joined DataRobot in January, I was convinced that DataRobot was poised to lead the coming AI revolution. At the same time, I didn’t know what 2020 would have in store. During the start of the pandemic, there was uncertainty about the future and the coming quarters — something I know all businesses experienced.
I could not be prouder of the way our team has worked tirelessly with our customers to help them adapt to the changing market with our technology. I have been thrilled to hear first-hand stories of success from our customers and see the value of not just individual use cases, but hundreds or thousands of them. Despite all of the uncertainty, our ability to translate AI adoption into significant value for our customers has made 2020 a great year for us, and we believe it has cemented our position as the leader in our market.
Last month, we announced a Series F financing round led by Altimeter with participation from other world-class public and private investors. Today, I’m excited to share that Snowflake, the cloud data platform, has deepened its commitment to DataRobot with a strategic investment in the round and an expanded partnership. Salesforce and HPE have also joined us as strategic investors. This new capital and our enhanced partnerships will further accelerate our capacity to arm every company with the ability to unlock the power of their data to provide AI-driven insights at scale.
The Era of Experimental AI is Over
It’s no secret that AI has the potential to reshape our future and my daily engagement with our customers constantly reinforces this. PWC estimates AI could contribute up to $15.7 trillion to the global economy in 2030, more than the current output of China and India combined. In 2017, Forrester predicted that AI-driven companies would take $1.2 trillion from competitors by the end of this year. And in Notes from the AI frontier: modeling the impact of AI on the global economy, experts from McKinsey & Company suggest that by 2030, AI technologies could lead to a substantial performance gap between AI front-runners (who fully absorb AI tools across their enterprises) and non or partial adopters.
Let me be clear: AI is no longer a luxury. Companies need reliable systems that deliver valuable business insights about the future that can steer their decision-making and growth. This is critical in order to compete and win in today’s market. With both the amount of data and the rate at which data is changing at an all-time high, AI is now a necessity. Now, more than ever, it presents an unprecedented opportunity for leaders and an existential threat for laggards.
Talking to people in the market when I first joined, I was excited about the opportunity, but surprised to learn many AI applications were failing. Studies show between 50-90% of machine learning models never make it into production. I’ve heard this from countless prospects — they tried other solutions before, whether it was building AI themselves or using another tool, and usually failed. I’ve also heard directly from CEOs who are frustrated that their data science teams still haven’t deployed a single model after many months of development, meaning they’re delivering no value. To make matters worse, even the models they do have in production haven’t been updated as data has drastically changed, with the result that these models are no longer accurate or trustworthy.
We call this phenomenon “Experimental AI,” meaning AI that isn’t based on value, readily operationalized, or trustworthy. Basically AI for the sake of AI. As we’ve developed as a company, we’ve focused on trusted and applied — the opposite of experimental — AI that drives value. Through a lot of successes and some failures over the last several years, we’ve identified the use cases that will drive significant value for our customers and developed the best end-to-end platform in the world to rapidly deliver this value to our customers.
Snowflake + DataRobot = Unprecedented Business Value
As the late Steve Jobs said, “Great things in business are never done by one person. They’re done by a team of people.” I agree with Steve on this one, but I believe this applies to companies too. We know we can’t win by going alone, and we’re proud to have a strong network of world-class partners, including three that deepened their relationship with DataRobot as part of this funding round: Snowflake, Salesforce, and HPE.
You can’t have AI without data. To maximize the velocity in going from data to value with AI, enterprises need a centralized source of data that can be delivered with consistently high performance. Enter Snowflake, the leading cloud data platform, coming off of a record-shattering IPO.
During our AI Experience Worldwide Conference earlier this year, Frank Slootman, Snowflake CEO, called Snowflake and DataRobot “two peas in a pod.” I couldn’t agree more. We believe this combination represents the next generation of analytic stack — Snowflake is where organizations store and process their data, and DataRobot is where enterprises rapidly derive insights from this data and improve the quality of decisions. DataRobot and Snowflake have a shared vision of making data and AI accessible throughout an entire organization and accelerating time-to-value.
We have a large number of joint customers who are addressing the common data management, infrastructure, and governance challenges that limit the impact of many AI initiatives. US Foods, for example, ingests large transactional data sets without bottlenecks into a single Snowflake repository and identifies at-risk customers for proactive outreach using DataRobot’s AI. The enhanced partnership will serve to further accelerate the synergies between the two companies and deliver massive value for customers.
We’re thrilled that Snowflake has furthered their commitment to DataRobot with their investment in our business and we look forward to continuing to build on our unique partnership that’s changing the face of data and analytics. We believe all of our partnerships will accelerate our business and the adoption of AI across the enterprise.
Building on our Success
So what’s next for DataRobot? This additional capital will significantly accelerate our ability to scale our business and serve more customers who are focused on transforming their business with AI so they can thrive in the present and in the coming years. We’ll keep building the best, most innovative enterprise AI platform with cutting-edge features that make a difference for our customers. With seven strategic acquisitions and counting, we’ll also evaluate acquisition opportunities that will allow us to scale our business even faster. Finally, we’ll continue to build out our business operations and a world-class go-to-market team.
Thank you to all of our customers, partners, employees, and investors for believing in our vision. We’re excited to continue building on our success together to create an iconic company and maximize our impact across the world.