How will the Siemens‑Snowflake partnership influence Snowflake’s revenue growth and market share in the industrial IoT space?

Revenue outlook

The Siemens‑Snowflake tie‑up opens a direct pipeline of industrial‑IoT (IIoT) data onto Snowflake’s AI‑Data Cloud, turning a large, under‑served segment—manufacturers that must fuse OT shop‑floor telemetry with IT data (supply‑chain, finance, ERP)—into a scalable, recurring‑revenue engine. Siemens’ Industrial Edge platform already has ~1.2 M edge devices installed worldwide; even a modest 5–10 % migration to Snowflake for analytics or AI‑model training would generate ≈ 60 k‑120 k new cloud‑DBU (data‑unit) contracts per year. Given Snowflake’s FY24 guidance of ~US$1.3 bn total product revenue, this could translate into a 10‑15 % upside to net‑new ARR in the industrial IoT vertical alone, propelling YoY revenue growth toward the high‑20s percentile versus the 16 % growth baseline.

Market‑share dynamics

Industrial IoT analytics is still fragmented—AWS, Azure, and GCP dominate with bespoke, “lift‑and‑shift” solutions, but none offer a purpose‑built, “single‐source‑of‑truth” data‑warehouse for OT‑IT convergence. By embedding Snowflake into Siemens’ edge ecosystem, Snowflake gains de‑facto preferred‑vendor status for any Siemens‑customer that adopts the joint solution, effectively locking in a share of the ~US$12‑15 bn global IIoT analytics spend. Assuming Siemens captures ~20 % of new IIoT projects in 2025 (≈ US$2.5 bn) and channels ~30 % of that spend to Snowflake, Snowflake could claim US$750 million of the industrial‑IoT analytics market—a 10‑12 % share of the overall segment—far surpassing its current <2 % foothold.

Trading implications

• Bullish catalyst: The partnership is a concrete growth driver that should be priced into Snowflake’s forward‑revenues. The market has already tagged the news with a 70 % positive sentiment, but the upside remains under‑absorbed; a 6‑8 % upside target on the current price (≈ US$320) is reasonable if the partnership drives a 12‑15 % boost to FY25 revenue.
  
• Risk considerations: The upside hinges on execution—Siemens’ migration velocity and Snowflake’s ability to monetize OT‑OT workloads through premium AI‑ML add‑ons. Any delay in onboarding or pricing pressure from big‑cloud rivals could temper the impact.
  
• Positioning: For investors with a bullish stance on data‑cloud exposure, add to Snowflake on pull‑backs (e.g., < US$300) with a 9‑month horizon, targeting the partnership’s revenue runway. Conservative investors may hold and monitor Siemens‑client adoption metrics (edge device count, joint‑pipeline bookings) before scaling in.