What is a cloud data warehouse?

In the past, companies relied on physical services and repositories to store all their vital data. Not only did this require a lot of maintenance and a number of specialized and trained professionals to keep these warehouses running smoothly, but it also had many disadvantages, including a lack of convenience and less secure environments. It was obvious that companies needed a different approach.

Enter the cloud data warehouse. This model can transform your business with a state-of-the-art solution to keep your data safe, secure and accessible. There are numerous platforms for this on the market, such as:

• Amazon Redshift
• GoogleBigQuery
• Oracle Autonomous Data Warehouse
• Teradata Advantage
• Microsoft Azure SQL Data Warehouse
• SAP data storage cloud
• IBM Db2 Warehouse
• Snowflake

Cloud data warehouse architecture

Leaving traditional on-premises data warehouses behind doesn't just mean accessing data through the cloud without having to worry about infrastructure. It also means a change in data warehouse architectures. As the data storage needs driving this change are becoming more complex, it is natural that the architecture of modern data warehouses will change as well.

One of the most common approaches to on-premises data warehouse architecture is the three-tier architecture, which includes the bottom, middle, and top tiers. The bottom layer contains the server with the databases, the middle layer has a server for online analytical processing (OLAP) that transforms the data, and the top layer is similar to the user interface layer.

While this model works perfectly for the on-premises data warehouse, it does not reflect what happens with cloud data warehouses. There are different architectural approaches to cloud storage depending on the provider you are considering. However, all major players in the cloud data storage industry use an architecture that leverages massively parallel processing.

This means they use a series of nodes or machines to quickly process even the most complex queries. Therefore, instead of having the limit of one OLAP layer, the architecture relies on multiple nodes that can provide incredible processing power to the point that they can even work with streaming data to obtain real-time results.

Cloud Data Warehouse: A Definition

Simply put, a data warehouse is a repository for all of your organization's data and analytics. The warehouse was created to accommodate large amounts of data. Traditionally speaking, a data warehouse was an on-premises, hardware-based physical resource located in an office or work environment.

Unfortunately, hardware-based physical data warehouses have some serious disadvantages, such as limited storage and high costs. But with cloud data warehouses, many of these drawbacks are resolved.

As you can guess from the name, a cloud data warehouse is a cloud-based storage model. While some companies still use the traditional model, more and more organizations are turning to the cloud-based alternative to meet their needs.

In it, the database is managed in a public cloud. It works in a similar way to the traditional model, except that it is not a physical structure – it is a digital structure that can be handled remotely and can be accessed from practically any location.

One of the main objectives of the cloud-based system is to provide up-to-date data analytics, allowing businesses to gain meaningful insights from it. For this to happen, the warehouse must be integrated with your current software systems. In other words, information must be constantly fed into the repository to keep it fresh and up-to-date. If you do this successfully, you can access data you may not have known existed.

Ultimately, a cloud data warehouse offers several features and modernizations that the traditional data warehouse simply does not have.

Benefits of Cloud Data Warehouses

So why are companies increasingly choosing cloud data warehouses over the older model?
Here are some of the many reasons.

Provides ample amount of storage

A traditional data warehouse is limited in storage capacity by nature. But with a cloud-based solution, you have virtually unlimited space. Do you need even more storage? It's easy to expand your warehouse — without having to buy new repositories or equipment.

You will have time back for your business

Traditional data warehousing requires extensive maintenance and management by experts. But a cloud-based alternative is much easier to manage, giving you time to focus on more pressing matters. Plus, you'll be able to gain meaningful insights from your cloud data warehouse that you can use to better run your business.

You will increase your security

All of your software and technology requires extensive cybersecurity protection. A cloud data warehouse provides this critical security, giving you the peace of mind that your data is well protected in a virtual environment. Additionally, because data warehouses are supported by third-party vendors, you can be assured that they will perform appropriate maintenance and updates to keep systems running with the latest security technologies.

You will have access to real-time analytics

The cloud data warehouse integrates with other software and technological systems, which feed data into the repository. This means it is generating actionable analytics in real time, giving you and your data team a way to use the information and reports provided immediately.

Performance is ideal

How do you get these analytics in real time? It's because of the performance of this repository. Performance is ultra-high, which means you'll get lightning-fast results, especially compared to the more traditional – and considerably slower – model.

Pricing is flexible

There are many different models and ways to pay for your cloud-based warehouse, and you can choose the one that best suits your needs. For example, you can pay for the amount of data you store and the rate will increase if you need more space. Or you can choose a subscription service. Either way, the options are usually cost-effective and you won't have to pay for the hardware involved.

Updates occur automatically

There is no need for specialized intervention to institute upgrades and updates to your cloud data warehouse. Instead, updates happen automatically, adding a much-needed layer of convenience to your busy life.

You can grant access to people in multiple locations

The main reason why a cloud data warehouse is so beneficial to users is the fact that it is accessible to people in locations around the world as they only need an internet connection and access credentials. This is a far cry from the traditional data warehouse, which is only accessible from its central on-premises location.

Cloud data warehouses accommodate many different types of data

Different types of data experts, like data scientists and data analysts, have varying needs for their data. Fortunately, you can accommodate these many needs with a cloud data warehouse. This is because the warehouse provides a series of information in different formats and structures.

Cloud data warehousing is an innovation that is transforming the nature of data analysis and actionable business insights in the modern era. Can your company afford to fall behind?

Pros and Cons of Cloud Data Storage

Moving your data warehouse to the cloud has significant benefits, but it doesn't exempt you from some drawbacks. Knowing both will allow you to make a better decision about whether cloud data warehouses are right for you or not.

Cloud Data Storage Pros

• Flexibility: Cloud-based data warehouses let you scale computing power and storage quickly, easily, and according to your needs.
• Support for diverse data: Cloud warehouses can store unstructured, semi-structured, and structured data in one place without sacrificing performance while simplifying access.
• Increased security: Cloud warehouses are often tested through penetration testing to ensure there are no exploitable vulnerabilities. Additionally, these platforms use role-based access control and multi-factor authentication combined with encryption to provide greater security across the board.
• Cost efficiency: Given that you don't need to maintain, update and manage your own data warehouse, moving to the cloud can help you save a considerable amount of money without losing access to crucial resources.

Cons of Cloud Data Storage

• Bandwidth limits: Many cloud providers set strict limits on bandwidth, which forces you to be very careful about your data usage – or risk being charged additional fees for exceeding those limits.
• Possible accessibility issues: Cloud data warehouses need an active internet connection at all times to ensure access to data. This can pose a problem when your Internet connection bottlenecks or encounters problems.
• Privacy at risk: Even with all the work cloud providers do to protect their customers' data, there is always the possibility of data leaks or accidental access by other users on the same servers.

Cloud Data Storage Companies

Providing stable, robust, secure and high-quality cloud data storage services is not exactly easy. Providers need a well-developed infrastructure with an elite architecture that guarantees performance, availability and security at all times. This is why most companies that need cloud data storage choose one of the four major cloud data storage companies:

• Amazon Redshift: Runs highly complex queries against large amounts of structured data.
• Google BigQuery: RESTful service that manages and queries data and works with any language built with the REST API.
• Microsoft Azure: Solution that leverages Microsoft's vast network of nodes and data centers to build, test, deploy, and manage applications and services.
• SnowflakeDB: SQL data warehouse that supports all data types and seamlessly integrates ETL and BI tools.

Who Shouldn't Use Cloud Warehouses?

As cloud data storage becomes more common and its capabilities continue to increase, many people are saying that everyone should use it. The reasoning behind this is simple: why spend a lot of money, time and effort on building and maintaining a local warehouse when you can access a superior option at a competitive price?

While this logic contains some truth, the reality is that cloud warehouses are not without their problems. There are some disadvantages when using cloud warehouses, namely:

• Vendor lock-in risk: Relying entirely on a single vendor can quickly turn into a headache if you decide to change companies in the future. There may be technical and financial barriers that could make the transition difficult. Additionally, you concentrate all your data in a single point, which can suffer outages or attacks that trigger massive disruptions to your operations.
• Lack of control: Data breaches are always a possibility and cloud warehouses are not exempt from them. Naturally, cloud storage providers have robust systems and constantly monitor for threats, but the possibilities of losing control over your data when sending it over the Internet are always present.
• Unreliable connections: Working with cloud providers means you will need access to stable internet connections to secure your operations. Although outages are becoming rare, they do happen and can completely disrupt your business when they do.

Business leaders who are uncomfortable with these risks should consider an alternative to total reliance on cloud warehouses.

Does that mean they should forget about them? No.

Cloud warehouses are a strategic asset right now, so leaving them aside could be more harmful than anything else. In this case, it is always best to consider using a hybrid cloud storage approach that combines in-house and cloud-based resources.

Bairesdev Cloud Data Warehouse Consulting

Our cloud data storage experts can help you understand the current cloud storage landscape, identify your specific needs, develop a strategic plan around them, and assist you with onboarding whichever provider you choose. We're backed by years of experience in cloud data storage consulting as we've helped countless businesses make the most of this powerful technology.