As more companies embrace the cloud, many wonder what will happen to on-premises data warehouses in the years to come.
Since the inception of data warehousing, the industry has witnessed many changes and advancements in terms of technology and infrastructure. However, to date, one thing remains constant — the need for on-premises IT infrastructure to support the functioning of data warehousing. As cloud technologies continue to evolve and mature, we believe that insight is the end of on-premises data warehousing. This article looks at why this trend is in place and what will happen in the future.
How do on-premises data warehouses work?
A traditional on-premise data warehouse installation requires an initial investment in hardware and a large staff to handle installation and maintenance. It also requires that you commit to the amount of storage and processing power necessary for your organization even before your business grows.
You will be responsible for extracting data from anywhere it exists within the business. Usually, this means getting data from multiple databases depending on their source. Then you’ll need to standardize that data to put all of it into one place.
Data can come from a variety of sources, including databases and spreadsheets, and it can be pushed to a central point. From there, it can be used to create business intelligence. With these insights, companies can make better business-related decisions over time.
How do cloud data warehouses work?
Cloud data warehouses allow businesses to collect, store, and analyze data in a cloud environment — reducing costs and freeing up IT resources. Using cloud data warehouses, companies can collect and store data from every department of their organization without making large upfront investments in hardware or IT teams.
There are two types of cloud warehouses: the traditional data warehouse, which mimics how companies store information offline (i.e., using servers); and the newer NoSQL cloud warehouse, which does not use servers to store or query data. Amazon Redshift is an example of a traditional data warehouse, while Google BigQuery is an example of a NoSQL warehouse.
In short, cloud data warehouses let companies get the latest information to their employees at all times by providing one centralized location where all relevant company data can be harnessed and analyzed. This gives businesses the advantage of up-to-the-minute information, which allows them to make critical business decisions that will increase productivity and efficiency.
On-Premises data warehouses are not ideal for today’s businesses
Data warehousing is a growing field, projected to be worth over $24 billion by 2025. Many companies are using this technology to fuel business decisions with accurate data. The ever-increasing popularity of cloud-based data warehouses is particularly significant, with 73% of businesses choosing this solution over on-premise systems.
The cloud data warehouse has already helped all kinds of businesses — from e-commerce to health care — unearth insights from their growing data sets. It’s also made it possible for businesses to exploit their data for new purposes, such as business intelligence and data science. Cloud data warehouses have made it easier to analyze your company’s data and turn it into actionable insights to help you make better decisions and grow your enterprise.
The demand for data warehouses will steadily increase over the next ten years. The increased adoption of cloud-based solutions will drive the data warehousing market through 2025, as organizations everywhere need to host their data in the cloud. Some companies that sell into the data warehousing market are SAP, Oracle, and IBM. These three businesses have seen that their products are needed in the market time and again.
The Big Tech Takeover
Columnar databases such as AWS Redshift and Google BigQuery represent a breakthrough in the way we access information — they promise to enhance the performance and scalability of regular, row-based databases tenfold. As these databases gain even more popularity amongst enterprises and businesses, they will undoubtedly bury their competition, such as Oracle Data Warehouse and Microsoft Azure.
For some time, businesses had been concerned about the security of public clouds. One significant risk was that cloud computing could make information vulnerable to hackers. However, as public clouds have matured and evolved, those issues have been addressed; today, businesses looking for a secure place to store their data can find it on a public cloud with high levels of encryption and heavy security protocols.
The Rise of Artificial Intelligence (AI)
Artificial intelligence is baked into everything we do — we don’t notice the change, but the change is massive. Cloud-based AI is changing how we manage warehouses and factories, drive cars and cities, and design new products. Yet all of that isn’t what matters most when it comes to using AI; what matters most is that businesses can now cheaply incorporate powerful data analysis into their operations, and they can do so in seconds.
AI and data analytics have been around for a long time, but these technologies were too expensive to be used by most companies until recently. However, the rise of cloud computing has changed that — now, businesses can buy and use AI and data services at a fraction of their previous price, and they can even collocate those services with the company’s own data.
Moreover, businesses still think of cloud data warehouses as expensive, oversimplified solutions. But the truth is, cloud data warehouses are far better than on-premises, local data warehousing solutions. Cloud warehouse solutions allow businesses to take full advantage of the benefits of cloud computing for affordable, cost-effective data warehousing.
Is this a good thing?
Lots of brands are moving to cloud-based data analysis platforms, and they’re not alone. The recent rise of artificial intelligence means that we can now mine data we’ve never been able to before — and this opens up a lot of interesting opportunities for the future.
The cloud is the key to collating data from disparate sources. It also makes that data easier to secure since it’s accessible only by the businesses authorized to use it. This ease of access has made the cloud the preferred option for data storage, with other storage options quickly becoming obsolete.