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The rise of cloud computing has fueled the creation of data silos -- collections of information not easily accessible by every department within an organization. Snowflake (SNOW -2.04%) helps break down those silos, allowing clients to harness the power of big data. And that value proposition has the company growing like wildfire.

In this Backstage Pass video, recorded on Nov. 29, 2021, Motley Fool contributor Trevor Jennewine discusses Snowflake and why the stock looks like a smart long-term investment. 

Trevor Jennewine: Snowflake, this company they specialize in big data and analytics. That's important because businesses are generating a lot of different data. Today, the IT ecosystem has become more complex, so you have applications and private cloud, public cloud, creating all this valuable information. Then it's often stored in separate systems, which makes it difficult to extract value. That's the problem that Snowflake solves. It makes it easier to manage and make sense of all of that information, and it does that with the Data Cloud.

Snowflake's Data Cloud allows businesses to integrate, analyze, and securely share their data. I threw up an image on the right hand side of the slide. The Data Cloud unifies a few different workflows or a few different use cases that used to require different solutions. Functions as a data lake for storage and to govern access to data, it functions as the data warehouse for analytics and reporting. The data science and engineering tools, data application tools, and then data sharing. The sharing point is particularly important. So, it allows businesses to share data internally with employees or externally with partners. You can also buy and sell datasets through the Snowflake Data Marketplace. That creates one of the company's competitive edges.

It creates a network effect, or a flywheel effect, that gets stronger as Snowflake continues to add customers. More customers join the platform, there's more data to be exchanged between those customers and it makes Snowflake more valuable for everybody. There was a question on Slido about Snowflake's competition. The way that Snowflake works, it's cloud agnostic, so it works across [Alphabet's] Google Cloud, Amazon Web Services, and Microsoft Azure. That quality being cloud agnostic, I think, gives it an edge over those three cloud titans. If you are a Snowflake customer, you don't have to pick which cloud vendor you're going to use. You can stick with the cloud vendor or vendors of your choice. It's definitely good to keep an eye on that competition. All three of those companies have had a lot of clout in the cloud space. But I think Snowflake has a little bit of an edge there.

Then the other thing that's worth mentioning is that like I said, the platform unifies these different workloads, and it really makes it easier for clients to manage all of their data and to perform all of those different use cases with a single platform. That is one reason why the company's expansion or the retention rate is rising so quickly, so I'll try and speed through these last few points here.

Snowflake puts its addressable market at $90 billion, and the company really continues to execute on a strong growth strategy. It's releasing tailored versions of its Data Cloud for specific industries. It provides all the normal features, but there's a few especially tailored tools and relevant datasets.

For example, in September, they launched the Financial Services Data Cloud, which is tailored to the businesses and the financial industry. Square and Mastercard are two examples of companies using Snowflake to personalize the customer experience, operate more efficiently, mitigate financial risk. In October they launched the media DataCloud, and this is tailored to businesses in advertising, media, entertainment, and Pinterest and The Trade Desk are two examples of companies that use Snowflake's tools here to target ads and personalize content recommendations.

They also have something called Powered by Snowflake, which is a platform, or a program that helps companies build and operate these data-driven applications. So, they're growing the business in a lot of different ways. I like the way that management is approaching that. And the financial performance has been incredible.

Over the past year, revenue reached $851 million; that's up 111%. But they are free cash flow negative over the past 12 months. But if you look at the first half of this year, they've generated free cash flow through the first half of fiscal 2022 -- so Snowflake is in fiscal 2022 right now. Then one other metric besides revenue is remaining performance obligation. This is future contracted revenue that has not yet been recognized. That grew a 122% in the most recent quarter. It's growing even faster than the revenue which really bodes well for sales growth in the future.

The company has almost 5,000 customers now, at 4,990, that was up 60% in the most recent quarter, 116 of those customers spend over $1 million each year. That was up 107%. And then the retention rate is mind-boggling 169%. That is one of the higher retention rates I've ever seen, and that indicates that over the past 12 months, the average customer has spent 69% more than they did in the prior year which really indicates that Snowflake has a sticky platform. I like this company a lot.