Data observability is crucial for managing Snowflake costs in the modern data stack. It provides insights into where businesses are spending, how they can improve spend allocation, and perform overall better cloud cost optimization. Organizations that practice data observability can reduce their Snowflake costs by improving resource performance, optimizing provisioning efficiency and warehouse usage, and enhancing cloud resources usage. Tools like Acceldata help companies follow best practices in using Snowflake's services and provide recommendations for efficient use of resources.