Snowflake acquires Crunchy Data for enterprise-grade PostgreSQL to counter Databricks’ Neon buy

Snowflake (Nasdaq:SNOW) has announced its intent to acquire US-based cloud-based PostgreSQL database provider Crunchy Data for an undisclosed sum, in an effort to offer developers an easier way to build AI-based applications by offering a PostgreSQL database, to be dubbed Snowflake Postgres, in its AI Data Cloud.

The timing of the deal, according to Ishi Thakur, analyst at Everest Group, makes it abundantly clear that this is Snowflake’s answer to rival Databricks’ acquisition of open source serverless Postgres company Neon to integrate PostgreSQL architecture into its Data Intelligence Platform.

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Historically, both of the data warehouse providers have been embroiled in stiff competition for a larger share of the data analytics and AI market, and this has led to the vendors announcing new and similar offerings in close proximity.

The biggest example of the rivalry is the companies’ adoption of different open-source table formats for managing large-scale data in data lakes and lakehouses, Snowflake choosing Apache Iceberg tables and Databricks’ adoption of Delta Live tables. The two vendors had also raced to open source their closed-sourced unified governance catalogs, Polaris and Unity.

However, Constellation Research’s principal analyst Michael Ni pointed out that the Crunchy Data and Neon acquisitions are just another round in the Snowflake-Databricks chess match that has transcended the big data and analytics space.

“This isn’t about big data analytics anymore — it’s about becoming the AI-native data foundation unifying analytics, operational storage, and machine learning,” Ni said.

However, Moor Insights and Strategy principal analyst Robert Kramer pointed out, though both are trying to add PostgreSQL to their stacks, their strategies differ.

“Snowflake’s focus is on enterprise readiness, integration, and governance targeting large enterprises, and Databricks is prioritizing a serverless, cloud-native PostgreSQL optimized for AI agent development and low-latency transactions, appealing to developers and startups,” Kramer said.

Creating a data intelligence platform

Snowflake’s decision to offer PostgreSQL inside the AI Data Cloud, according to Bradley Shimmin, lead of the data and analytics practice at The Futurum Group, is about further blending operational and analytical workloads within the same platform, something that most data vendors are trying to do, and are calling a data intelligence platform.

These kinds of acquisition open the broader data and application development tech landscape and market segment to vendors, Shimmin said.

They are being driven by the trend in enterprises to increasingly rethink their application development practices to incorporate not just generative AI, but to also bring in data more freely to support AI-driven use cases, Shimmin added.

The decision to offer its own version of Postgres, despite the popularity of the open source version among developers for its flexibility, lower cost, and AI features, according to Kramer, is rooted in Snowflake’s strategy to alleviate issues such as lack of security, compliance, and scalability in the open source version.

Snowflake Postgres will help enterprises build AI applications while keeping their data safe and reliable, he added.

Constellation Research’s Ni expects Snowflake Postgres to “go down well” with the Postgres community, as it does not seek to create a fork of PostgreSQL, but instead carry on the work already done by Crunchy.

Why did Snowflake choose Crunchy Data?

Snowflake, which had a choice of companies to acquire to integrate PostgreSQL into its offerings, choose Crunchy Data mainly because of the community’s trust in the company and its offerings, analysts said.

“Crunchy Data wasn’t just a tech buy—it was a trust buy. Snowflake wanted battle-tested Postgres, not a startup experiment,” said Ni.

Moor Insights and Strategy’s Kramer seconded Ni, and said that Crunchy Data is known for its strong security, scalability, and compliance features, essential for mission-critical applications in regulated industries.

“The company has a proven track record with large enterprises and government agencies, offers developer-friendly tools, and provides performance metrics and connection pooling right out of the box. These strengths align with Snowflake’s goal of providing a PostgreSQL solution that meets enterprise customer needs,” Kramer added.

Crunchy Data’s experience and success with regulated industries also aligns with Snowflake’s path to increase its focus on vertical AI offerings, and should help it win workloads in government, finance, and healthcare industries, Ni said.

Snowflake Postgres, the offering planned after the close of the Crunchy Data acquisition, is expected to be in private preview soon, Snowflake said. It did not offer any timeline for its general availability.

The cloud-based data warehouse vendor has said it will support existing Crunchy Data customers, as well as make what it called “strong commitments” to the Postgres community.