A data warehouse collects and consolidates data from a variety of sources within your organization. It’s used as a centralized data repository for analytics and business intelligence.
Traditionally, data warehouses are located on-premises. You purchase the hardware, the server rooms, and specialized staff to run it. While this grants your business full control, there are obvious setbacks in terms of cost, scalability, and performance.
We are now in a new wave of data warehousing innovation. Businesses of all sizes are migrating to the cloud. A cloud data warehouse is delivered in a public cloud as a managed service. This means that you can now access almost unlimited computing power and storage space from your laptop.
With traditional on-prem data warehouses, scaling the size of your data warehouse or improving the performance would mean purchasing new, more powerful hardware. This is often expensive and time-consuming.
Running your own on-prem data warehouse also requires hiring database managers to deal with outages, upgrades, and data access requests.
As companies become more data-driven, reliable access to centralized data is increasingly important. There is a strong demand for data warehouses that are fast, accessible and have the ability to scale elastically with business needs.
Cloud data warehouses address these needs while eliminating the cost and risk of purchasing new hardware.
Scalability and Elasticity
The cloud allows companies to increase the size of their data warehouse without needing to purchase additional hardware, server rooms or staff.
Most cloud data warehouses are elastic meaning they allow you to add or remove computing resources depending on your needs.
This is especially valuable for businesses with cyclical demand. When demand is high, over the holidays for example, businesses can add more capacity. When demand drops, it’s easy to reduce storage and computing power to save money.
This is impossible with an on-prem data warehouse where you are limited by the server and storage resources that you own.
Speed and Performance
Analytical queries often analyze many rows in a database at one time. Running too many queries simultaneously can quickly reach computing capacity on an on-prem data warehouse.
Typically, cloud data warehouses have several servers that can handle large numbers of transactions simultaneously.
This means your analytics teams can connect with ERP, CRM, support, and marketing data simultaneously without sacrificing speed or performance.
Reduced Database Management
If your on-prem data warehouse fails, it is your responsibility to fix it. When servers go down it can cause a lot of work for your database admin or engineering team.
Cloud data providers manage failures and updates for you. Most providers like AWS guarantee a high level of reliability and uptime in their SLAs.
Disaster Recovery
When it comes to disaster recovery, businesses traditionally needed to invest in “backup” data centers, which come with their own set of added costs.
Cloud data warehouses offer automatic backups, snapshots, and duplicates, making disaster recovery simpler and cheaper. Cloud providers operate on massive distributed systems around the world, making it faster and easier to recover from a failure or natural disaster in one location.
Cost Efficiency
With most cloud data warehouses you pay only for what you use without needing to commit to hardware investments.
The ability to scale your computing and storage usage up or down with the needs of your business eliminates wasted spend on unused hardware.
With an on-prem data warehouse, procuring new hardware, server rooms and staff is often an expensive and time-consuming process that requires businesses to plan years in advance. This practice doesn’t align with today’s fast-paced and agile business environment.
The ability to manage growing volumes of data more efficiently has made cloud data warehousing the new standard.
Businesses making the switch are using the cost-savings to invest in more critical business intelligence projects, while empowering teams across the organization with self-service access to data.
The final piece of the puzzle is loading and transforming data into your cloud data warehouse for analysts to use. Managed ETL/ELT tools like Etleap ingest data from a multitude of data sources, automatically and securely.
Learn how to build scalable, analyst-friendly data pipelines today with Etleap.