Data warehouse pricing

1. xplenty.com
Data Warehouse Pricing & Cost: What
You'll Really Spend
Abe Dearmer
11-14 minutes
Choosing the right data warehouse, together with the right
business intelligence and analytics tools, is essential in order to
get cutting-edge insights from your raw data. But there’s one all-
important question to answer before you start your search: how
much does a data warehouse cost, exactly?
Of course, the hope is that your choice of data warehouse will
deliver a healthy return on investment—but the ROI of any data
warehouse will heavily depend on its features and how well it
meshes with your existing business workflows and processes.
According to the IT research and advisory firm Gartner, “cost
should be a secondary consideration to the achievement of
business benefits” when purchasing BI software. In other words,
focusing on functionality will be more successful in the long run
than focusing primarily on cost.
With all that said, however, the cost is still an important factor in
any data warehouse purchasing decision. In this article, we’ll go
over the various components that play into the cost of a data
warehouse, so that you can make a smarter, more informed
decision for your organization.
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2. Table of Contents
1. What Do You Get From a Data Warehouse?
2. What Affects the Price of a Data Warehouse?
3. The True Cost of a Data Warehouse
4. Using Xplenty with Your Data Warehouse
What Do You Get From a Data Warehouse?
First, it's important to clarify what a data warehouse actually does.
A data warehouse is responsible for storing your enterprise data,
pulled from a diverse array of sources, in an organized, efficient
manner.
This data warehouse is then paired with a business intelligence
tool, helping users identify trends and perform sophisticated
analyses. Your data warehouse ensures the information can easily
be queried by your choice of BI solution. In other words, the data
warehouse doesn’t provide business insights itself, but it’s an
essential part of getting the job done.
A data warehouse is distinct from a database. In fact, ETL
tools such as Xplenty take information from separate locations
—including databases and other sources such as files and
websites—and then store it in a single centralized data
warehouse. The ETL process (extract, transform, and load) can
happen manually or automatically, under scheduled preset
conditions (e.g. at a certain time of day). Once data is in the
warehouse, it can then be configured and analyzed.
Your choice of ETL solution should work seamlessly with the
sources of data that you rely on. E-commerce websites, for
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3. example, need to make sure that their ETL tool is compatible with
Shopify, Magento, Salesforce, or whatever SaaS application you
use for your business.
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What Affects the Price of a Data Warehouse?
There are a few different components that go into determining the
cost of a data warehouse: the storage platform, the transformation
pipeline, and the people who make it all work. Each one of these
factors will affect data warehouse pricing, with a number of
providers competing for your business at each stage.
1) Data Storage
First, of course, you’ll have to choose where to actually house your
data warehouse, i.e. where the data will reside. As with most
enterprise technology, you can opt for on-premises hardware that
you purchase and maintain yourself or a cloud-based solution
that’s provisioned to you over the Internet.
The question of cloud vs. on-premises data warehouses is a hotly
debated one. In the past several years, we’ve seen a greater
movement towards cloud-based solutions. According to a 2019
survey by Unisphere Research, 41 percent of companies with a
data warehouse say that they’re running at least part of the
warehouse in the cloud.
Cloud data warehouses don't require the space, upfront
investment, or ongoing maintenance that their on-site counterparts
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4. do. In addition, they support accessibility regardless of geographic
location, making them optimal for remote work arrangements.
Moving to the cloud practically means that you’re already saving
money. That's because cloud solutions largely don’t require
hardware, on-site IT staffers, space for the machines, or
operational costs like electricity. Cloud solutions can cost $18 to
$84 per terabyte per month, while on-site solutions can cost up to
$1,000 per month ($12,000 per year) by some estimates.
Still, there are some good reasons to choose an on-premises data
warehouse solution. If you care about speed, for example, your
data might move more quickly from on-premises to a client
location than from the cloud, which stores data on servers in
multiple locations worldwide. What’s more, an on-premises
solution gives you complete control over how your data warehouse
connects with other systems.
Some of the most notable cloud warehouse providers include:
Amazon Redshift
Google BigQuery
Snowflake
Microsoft Azure
IBM Db2
If you expect that the data in your warehouse will be frequently
accessed, you'll need a "hot" storage solution, i.e. one that offers
high performance and speed. If you’ll be accessing the data less
frequently, a "cold" storage solution (where you sacrifice a little bit
on speed and performance in exchange for lower prices) may
suffice.
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5. 2) BI and Visualization Software
As discussed above, data warehouses are much more effective
when paired with powerful business intelligence and visualization
tools. Since humans are highly visual creatures, the terms
“business intelligence tool” and “visualization tool” are often used
interchangeably. However, the term “visualization” refers
specifically to visual methods of depicting data (such as
dashboards, charts, graphs, and reports), while BI tools are any
software that helps process and analyze large quantities of data to
extract valuable business insights.
The business software review website Capterra estimates that a
business intelligence solution costs $3,000 per year on average,
with a low end of $600, and a high end of $6,000. If you’re really
strapped for cash, you can even opt for an open-source data
visualization solution such as D3.js, a JavaScript library for
building web-based visualizations. Of course, open-source BI tools
are often more technically complex, requiring you to hire an in-
house developer for an additional cost (see below).
However, like the data warehouse itself, cost shouldn’t be the only
factor that plays into your buying decision for a BI tool. The goals
of your BI workflow should determine which solution you
purchase—you can focus on regulatory compliance, revenue
optimization, or cost reduction, among other objectives.
3) ETL Software
Moving the data from source locations to the target data
warehouse typically happens through an ETL (extract, transform,
load) solution. The cost of this solution will depend on which
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6. platform you choose and the pricing model. Each ETL tool typically
supports a different suite of databases, so you want to be certain
that your solution will sync with the data you want to store in your
warehouse.
Xplenty, for example, has a full suite of integrations for both source
databases and target data warehouses. The databases we
support include MySQL, Oracle, MongoDB, IBM
Db2, PostgreSQL, MariaDB, and Microsoft Azure SQL Database,
among many others. Meanwhile, the data warehouses we support
include Snowflake, Amazon Redshift, and Google BigQuery.
When it comes to ETL tool pricing, the most important thing to note
is the cost pattern used by your choice of partner:
Many ETL solutions use the variable pricing model (Diagram B).
These packages start off free or at a low introductory price, but
scale up exponentially based on the number of jobs you run. This
means that, while your initial monthly bill may start low, you are
pretty much guaranteed to see your costs rise over time. If you
have a particularly heavy usage one month, you might be stuck
paying massive (and unexpected) overages. This kind of
unpredictability can make it difficult to stick to a consistent budget.
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7. To make sure your costs stay consistent month to month, you’ll
likely want to opt for an ETL solution that employs a fixed or
stepped pricing model (Diagrams A or D). The fixed-rate model
starts at one price and stays there regardless of workload, while
the stepped model increases at set amounts based on predictable
factors.
Xplenty, for example, charges a single monthly rate per connector,
so that you pay only for the data sources you actually use. Even
when adding more connectors, you’ll know exactly how much
those connections will cost, and you can budget accordingly. You
can send an unlimited amount of data through an integration
without increasing your monthly bill, while still having the ability to
scale up when you need to.
4) IT Personnel
Finding the right people is crucial when buying a data warehouse
(especially if you’ve gone with an on-premises solution when the
entire system could go down with no warning). Some of the roles
you may have to fill include:
Information systems manager ($12,000/month)
Backend developer ($8,800/month)
Database architect ($9,400/month)
Data analyst ($7,500/month)
Of course, these salaries are only an average and may depend on
the market rate and cost of living in your area. In addition, the
amount you spend depends on the strain you put on each of these
members of the team. That pressure depends on the work you ask
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8. them to do, which in turn depends on the usability of your
component solutions.
Xplenty, for example, is a simple, drag-and-drop ETL solution with
a user-friendly visual interface and managed services options.
Working with Xplenty could potentially save you a lot of developer
costs, which as we discuss above could run you about $8,800 per
month per person.
The True Cost of a Data Warehouse
As we’ve seen, the true cost of a data warehouse is much more
than the cost of storing the data itself. So what’s the total price of a
data warehouse solution?
Here are some rough figures, taking into account all of the above
components. Based on these numbers, you should be able to
estimate your own organization’s data warehouse pricing:
Cloud storage solution: $18 to $82 per terabyte per month
On-site storage solution: $1,000 per month
Visualization software: $600 to $6,000 per year
ETL software: $800 to $8,000+ per month (either fixed or
variable)
Personnel: $37,700 per month
In short, a data warehouse can be a significant investment.
However, the returns that you’ll reap in terms of business
intelligence will be invaluable. Data warehouses give you smarter,
more accurate insights into your internal operations and the
business landscape around you, letting you make better decisions
and lower your overall risk.
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9. Using Xplenty with Your Data Warehouse
ETL software is a critical yet often overlooked component of any
data warehouse. When it comes to your options for ETL tools, you
can’t go wrong by choosing Xplenty.
The Xplenty platform has been custom-built to be intuitive and
user-friendly, so you don’t have to pay the costs of hiring,
onboarding, and training new developers. What’s more, Xplenty’s
stepped-rate pricing structure is transparent, affordable, and
predictable. You pay only for the connectors that you use, giving
you the ability to accurately anticipate monthly costs.
But the pricing is just one benefit: Xplenty is also a powerful ETL
platform to work with. Using Xplenty's simple drag-and-drop
interface, you can create high-speed connections between your
databases and your data warehouse, giving you real-time
availability without sacrificing data integrity or data quality.
Ready to give Xplenty a try? Get in touch with us today to
schedule a chat about your business needs and objectives, or to
sign up for a free trial of the Xplenty platform.
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