Why Traditional Companies Wont Use Your Data Tool: A Reality Check

I love reading the Snowflake but Databricks debates. I think they both are fantastic platform and we work with both of them. The reality is its easy to sit in SF and NY and think that everyone has figured out data and we’re all just moving to AI. SPOILER ALTERT: a massive percentage of traditional businesses don’t even have a basic data platform. Many haven’t heard of Snowflake or Databricks. I’m talking about ‘traditional’ industries — banking, manufacturing, retail, oil & gas, real estate, education, healthcare, government etc

I call these “Traditional” companies because they make up the majority of the global workforce. Unlike tech companies or digital natives, they don’t jump on every new trend. They evaluate everything through an ROI lens. And for these companies, the data space has completely failed them.

Here’s why:

1. Data integration is a nightmare. Most of these companies only started “digitalization” in the last decade. They’re running SAP, Salesforce, Oracle — enterprise systems that don’t make it easy to extract data. Over 50% of their connections are long-tail with the least developer-friendly tools imaginable. SFTP servers are considered bleeding edge for some of these vendors! Don’t believe me? Delta and United, leading global airlines, run passenger management systems written in COBOL, and none of these systems talk to each other.

2. Cloud skepticism is real. Many of the world’s largest businesses are wary of cloud solutions. Private cloud deployments might be acceptable, but they’re not signing up for multiple vendors’ SaaS offerings. That immediately eliminates 90% of all data products on the market.

3. They need implementation services. Fancy platforms mean nothing to these companies. The majority of their workforce consists of blue or grey-collar workers. They’re not hiring data engineers and embedding them across business units. What they need is a simple, cost-effective way to implement end-to-end use cases. And system integrators (SIs) aren’t a great solution either — they’re fundamentally in the business of selling hours and have little incentive to promote efficient technology platforms. Why would they when they’re incentivized to bill more hours? Don’t believe me? Datadog only recently started working more closely with SI’s and now they can because of their scale.

4. Horizontal platforms aren’t practical for traditionals. Snowflake and Databricks apps sound great with their infinite capabilities, but traditional companies can’t build on them. What they actually want is simple: show them the top 3 apps others in their industry are using, the measurable impact those apps deliver, and give them a straightforward implementation path. They need proven solutions, not platforms that require them to build from scratch.

I’m excited about the next 5 years. We’re going to see these large traditional businesses start to first leverage data on the journey to AI. However its not going to happen on the current fragmented ecosystem of tools. They need a new complete solution that addresses these realities head-on.

More on this soon….

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