Enterprise alert: PostgreSQL just became the database you can’t ignore for AI applications

The open-source PostgreSQL (sometimes also referred to as Postgres) is apparently a very hot commodity for big enterprise data platform vendors.

Snowflake is acquiring privately-held PostgreSQL provider Crunchy Data, in a deal that is reportedly valued at $250 million. The acquisition comes barely two weeks after Snowflake’s rival Databricks acquired serverless PostgreSQL vendor Neon. The pair of PostgreSQL acquisitions highlights the critical importance of the open-source database to modern enterprise data and AI workflows. 

Unlike Neon, which was only a three-year-old company, Crunchy Data has been around for over a decade, having been founded in 2012. The company’s core platform, Crunchy Postgres, is a managed, automated and fully supported version of PostgreSQL. There is also a specific version of the platform for Kubernetes environments and a newer product called Crunchy Data Warehouse that brings the platform to data lakehouse environments.

According to Snowflake, Crunchy Data’s technology will be the foundation of a new offering known as Snowflake Postgres. It will allow users to combine Crunchy Data’s enterprise-grade and developer-friendly Postgres capabilities within Snowflake’s secure and governed perimeter. The goal is to simplify how developers build, deploy and scale production-ready AI agents and apps.

“In our discussions, it quickly became clear that the same trends that Crunchy Data was seeing from the operational database world were also apparent to Snowflake,” Paul Laurence, co-founder of Crunchy Data wrote in a blog post. “With today’s announcement, we are targeting the large online transactional processing (OLTP) market, leveraging Snowflake’s reach and Crunchy Data’s flexible, scalable solutions for enterprise workloads and developers alike.

What PostgreSQL support brings to Snowflake

Snowflake has its own data cloud platform that provides a cloud data warehouse for its enterprise customers.

While Snowflake has a growing customer base, it’s not the same as the open-source PostgreSQL community. PostgreSQL has emerged to become a very popular database, not just for traditional enterprise applications but also for agentic AI. After all, that’s why Databricks acquired Neon.

It also brings in a solid developer community. Data analyst Sanjeev Mohan told VentureBeat that in his view, this is an excellent acquisition. 

“Unlike Neon, Crunchy is truly enterprise,” Mohan said.

He added that Crunchy Data has a very deep PostgreSQL community of users and it’s also engaged with Kubernetes. Crunchy Data isn’t just focused on PostgreSQL for operational workloads; it’s also able to support analytics as well. PostgreSQL by default was originally just an OLTP (Online Transaction Processing) database, but it has been expanded by Crunchy Data as well as other vendors like Google with its AlloyDB, to also support OLAP (Online Analytics Processing) database workloads. 

Mohan is overall extremely positive on the continued prospect of PostgreSQL for enterprise use cases.

“The community has continuously added exceptional capabilities not only for traditional relational and SQL use cases but also for time-series, JSON and vector search, while boasting some of the best geospatial features available,” he said.

Why PostgreSQL matters to the Snowflake and its enterprise users

PostgreSQL is widely used in the enterprise. But perhaps even more importantly, developers increasingly use it as a foundation for agentic AI. This is another key reason why Databricks acquired Neon and why Snowflake is now acquiring Crunchy Data.

It’s all part of a broader multi-year effort at Snowflake to engage with developers in an open way.

“The popularity of PostgreSQL with developers, coupled with CrunchyData’s support for data warehousing on Iceberg, align well with Snowflake’s core strategy,” Kevin Petrie, vice president of research at BARC told VentureBeat.

Apache Iceberg is an open-source data lake table format that Snowflake supports as part of the company’s growing strategies to embrace more open technologies. Petrie noted that it’s not too hard to imagine how companies would use CrunchyData technology within the Snowflake platform to build AI applications for common use cases such as telemetry, geospatial and advertisement analytics. 

He’s also not too surprised that Crunchy Data is being acquired.

“Crunchy Data’s growth seems to have flattened in the last couple of years, so it’s not surprising to see them opt for this exit,” Petrie said. “The consolidation wave among data tools and platforms continues.”

Why it matters to the enterprise

For enterprise data and AI leaders, Snowflake’s acquisition of Crunchy Data reinforces a key point that may have already been obvious to some: PostgreSQL matters.

PostgreSQL is no longer just an open-source alternative to proprietary relational databases. It’s an open, widely used platform that is rapidly becoming a de facto standard for developers and the enterprises they work for to build agentic AI and enterprise applications at scale.

The big hyperscalers, including Google, Amazon and Microsoft, as well as a long list of smaller vendors including EDB, Aiven and Netapp Instaclustr are all already supporting PostgreSQL.

Now, with Snowflake and Databricks throwing their support and hundreds of millions of dollars at PostgreSQL, it’s clear that enterprises should have it as part of their developer and AI stacks.