How a Snowflake announcement explains dbt Labs' licensing change
Snowflake announced it would offer dbt Core as a native Snowflake feature. This prompted dbt Labs to modify dbt Fusion’s licensing to gain more leverage over its IP.
The Core Issue
The partnership between these companies has been symbiotic. Snowflake benefits from tools like dbt because they drive workloads inside Snowflake, while dbt Labs gained customer access and revenue through Snowflake’s ecosystem.
Strategic Positioning
Several factors are behind dbt Labs’ decisions:
- Community as moat: The actual competitive advantage wasn’t the technology itself but the community and the distribution built atop it
- Growth pressure: With $400+ million raised, the company needed to demonstrate value beyond being a weekend project
- Product challenges: Leadership turnover and difficulty establishing dbt Cloud as more than an orchestrator platform created urgency
Product Evolution Timeline
- 2017-2021: Productivity-focused messaging
- 2021-2023: Python expansion and semantic layer pursuit
- 2024-2025: SDF acquisition and AI features like dbt Copilot
Future Considerations
Four areas to monitor:
- Community impact minimization through careful execution
- Upselling dynamics as Snowflake bundles dbt Core
- White-labeling implications for revenue models
- Upcoming product announcements under new CPO Ryan Segar
The analysis suggests dbt Labs strategically bought time to develop defensible products beyond its core orchestration tool.