In a context where data plays a central role in all business strategies, the announcement that Snowflake, leader in cloud data management platforms, is in advanced talks to acquire Observe Inc. for nearly one billion dollars attracts all attention. This potential major deal could represent the largest in Snowflake’s history and fits within a growth logic and strengthening of its technology portfolio. By combining Snowflake’s power with Observe’s expertise in application monitoring, the merger promises to reshape the market for data analytics and application monitoring solutions. The stakes are financial, technological, but also strategic, notably in an era where companies increasingly seek to efficiently leverage their data while controlling the performance of their digital services.
Founded in 2018, Observe Inc. quickly emerged as an essential startup in the field of application observability. Based in San Mateo, California, it attracted major investors such as Sutter Hill Ventures and Madrona Ventures, raising over 470 million dollars in its funding rounds. Its expertise relies on technologies that enable technical teams to monitor application health in real-time, identify failures, and anticipate slowdowns—a skill now indispensable in increasingly complex cloud computing and artificial intelligence environments.
- 1 A historic partnership between Snowflake and Observe: technological alliance and complementarity
- 2 Observe Inc., a technological gem at the heart of modern application monitoring
- 3 Competitive analysis: how Observe’s acquisition could disrupt the technology market
- 4 The strategic stakes of a nearly one billion dollar acquisition for Snowflake
- 5 Snowflake: a growing player with a strategy focused on innovation
- 6 Future perspectives and impact of the operation on the data and AI market
- 7 The main reasons for a strategic investment of nearly 1 billion dollars
A historic partnership between Snowflake and Observe: technological alliance and complementarity
Even before acquisition negotiations became known, Snowflake and Observe already maintained a close relationship. Indeed, Observe uses Snowflake’s database technology to centralize and analyze vast volumes of data from multiple sources, consolidated in data lakes. This technological proximity greatly facilitates the potential integration between the two entities, significantly reducing the usual operational barriers in a major merger.
Moreover, Snowflake’s venture capital subsidiary invested in Observe in 2024, showing early strategic interest in this young Californian startup. Jeremy Burton, CEO of Snowflake, also sits on Observe’s board of directors, directly participating in the company’s directions. This synergy reinforces the belief that the desired acquisition is part of a thoughtful and mature logic developed over several years, a natural step to consolidate Snowflake’s position in the advanced analytics technology market.
This collaboration can also be analyzed through the complementarity of their offerings. Snowflake is recognized for its unified cloud data platform, capable of processing, sharing, and securing massive volumes of information, while Observe excels in observability and application monitoring, two essential pillars for ensuring the performance and reliability of modern applications. Their coming together thus responds to the urgent needs of digital companies that must both manage their strategic data and ensure the quality of their SaaS, AI, and cloud services.
Observe Inc., a technological gem at the heart of modern application monitoring
Since its creation, Observe Inc. has established itself in a rapidly growing sector, that of infrastructure and application observability. This crucial and technical field aims to give IT teams powerful tools to oversee the entire application lifecycle, analyze incidents with precision, and optimize system performance. In a world where even the slightest interruption can be costly in terms of reputation and finances, having sophisticated monitoring tools has become a major requirement for organizations.
Observe develops a software suite that enables engineers to visualize application health in real time, automatically detect anomalies, pinpoint root causes of failures, and anticipate risks. These features are enhanced by intelligent data exploitation stored in data lakes accessed via Snowflake. For example, thanks to advanced data correlation algorithms, Observe can link visible symptoms to underlying problems, thus significantly reducing the time needed to resolve a failure.
The added value of these observability tools today goes beyond simple incident correction. They also enable optimizing application update deployments, improving user experience, and even providing insights into the effectiveness of AI-based solutions implemented. This positioning offers Observe an essential window of opportunity to establish itself in a market as competitive as cloud and AI environment management and monitoring.
The factors that propelled Observe in the market
- Significant investments: a fundraising of more than 470 million dollars in a few years, demonstrating the confidence of financiers and the startup’s ambition.
- Cutting-edge technology: software combining real-time analysis, data correlation, and machine learning for complete observability.
- Diversified clientele: ranging from startups to large companies seeking to master the performance of their digital infrastructures.
- Recognized expertise: highly qualified technical teams with a deep understanding of current operational needs.
Competitive analysis: how Observe’s acquisition could disrupt the technology market
The potential purchase of Observe by Snowflake is not an isolated event but part of a global movement of intensified competition in the application monitoring and data analytics sector. This trend reflects the evolving demands of companies seeking to control both the load of their cloud applications and the increasing complexity of artificial intelligence services.
Snowflake thus positions itself as a direct competitor to heavyweights such as Datadog and Splunk, major players already well established in this market. These companies offer comprehensive application monitoring platforms, blending performance analysis, security, and advanced reporting. Integrating Observe’s capabilities could allow Snowflake to offer a more integrated solution closely linked to its cloud data platform, thereby strengthening its strategic position.
Recent valuations in this sector also illustrate the economic interest in observability. Last November, Palo Alto Networks completed the acquisition of Chronosphere for 3.35 billion dollars, showing large tech companies’ willingness to invest heavily in this promising field. For its part, Snowflake invested in 2025 in TruEra AI, demonstrating its interest in strengthening its expertise in AI-based application monitoring.
The planned merger is also a means to capitalize on market growth, estimated at several billion dollars annually, driven by massive cloud migration and increased automation linked to artificial intelligence. By combining the complementary technologies of Snowflake and Observe, the goal is to offer a more complete solution capable of meeting complex client expectations in a digitalized and hyperconnected context.
Comparative table of the main players in the application monitoring market in 2026
| Company | Specialty | Recent acquisition price | Positioning | Key technology |
|---|---|---|---|---|
| Snowflake (with Observe) | Cloud data platform & application monitoring | ~1 billion dollars | Consolidation and integration | Unified storage, real-time analysis |
| Palo Alto Networks (Chronosphere) | Large-scale observability | 3.35 billion dollars | Leader in network security & monitoring | Big data, AI |
| Datadog | Multicloud cloud monitoring | Not applicable | Market leader | API integration, advanced alerts |
| Splunk (Cisco) | Log management and analysis | Not applicable | Major player | Machine Learning, security |
The strategic stakes of a nearly one billion dollar acquisition for Snowflake
Beyond the simple financial aspect, this acquisition fits a clear strategic ambition for Snowflake. In a booming market, strengthening its portfolio with observability technologies significantly improves the attractiveness of its platform. Mastering data end-to-end, from collection to interpretation through adapted monitoring tools, today constitutes a major competitive advantage.
This operation should enable Snowflake to expand its capabilities to detect, prevent, and solve application-related issues while offering new features to its clients, notably in cloud service management and artificial intelligence environments. It is a long-term investment aimed at ensuring a sustainable positioning in solutions dedicated to business and technical teams.
Furthermore, this rapprochement reinforces Snowflake’s presence in the highly monitored data market, a sector for which quality, reliability, and security have become undeniable criteria. This integration will also optimize synergies between teams, accelerating innovation around cloud-native technologies and intelligent data management.
Snowflake: a growing player with a strategy focused on innovation
For several years, Snowflake has established itself as a key company in the global market for cloud data management and processing. In 2026, its economic performance attests to sustained growth with a market capitalization nearing 77 billion dollars and a 29% increase in quarterly revenue, reaching 1.21 billion dollars. These figures illustrate a very favorable market dynamic and massive adoption of its technologies by companies.
Snowflake’s stock has gained 43% since the beginning of the year, further strengthening its position against historical competitors. This trajectory reflects a dual strategy of investment in innovative technologies and expansion through targeted acquisitions, like the potential takeover of Observe.
At the same time, Snowflake has also launched an artificial intelligence-based solution aimed at automating business tasks such as IT ticket creation and dashboard generation. These products, already generating over 100 million dollars in annual revenue, confirm the group’s ambition to fully integrate AI into its offers for enterprises, thus multiplying use cases for its clients.
Future perspectives and impact of the operation on the data and AI market
Completing the acquisition of Observe would mark another major step in the evolution of the technological landscape. By combining advanced data management and application monitoring, Snowflake will be able to offer an integrated and complete solution, perfectly suited to current challenges, notably in environments where artificial intelligence plays a colossal role.
This merger could drive accelerated innovation in the sector thanks to better exploitation of data from distributed applications and cloud services. For clients, this will translate into better control of their operations, shorter response times in case of incidents, and cost optimization related to maintenance and the evolution of technical infrastructures.
The observability market, already fast-growing, could see the emergence of an even stronger player capable of leveraging an immense volume of combined data with highly sophisticated analytics and monitoring tools. Competition promises to be intense, but the operation clearly strengthens Snowflake’s capabilities in a global strategic context of data mastery and technological innovation.
The main reasons for a strategic investment of nearly 1 billion dollars
- Consolidation of Snowflake’s position as leader in cloud and data platforms.
- Strengthening of the technological offering through integration of advanced observability tools.
- Access to a growing market: application monitoring and cloud infrastructure management.
- Improvement of technological synergies between database and application monitoring.
- Accelerated innovation capacity through the convergence of talents and technologies.
