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On-premise and the Cloud

Updated Dec 03, 2021 ·

On-Premise Data Warehouse​

When setting up a data warehouse on-premise, organizations buy and manage all the hardware and software in-house.

Pros:

  • Full control: Organizations have total control over the data and systems.
  • Customization: It’s easier to tailor the system to specific needs.
  • Local network speed: No bandwidth issues as the system is within the organization's own network.

Cons:

  • Upfront costs: Significant initial investment in hardware and software.
  • Maintenance: Requires dedicated staff for upkeep, including security and patches.

Cloud Data Warehouse​

Many organizations are now shifting to cloud-based data warehouses, such as Amazon Redshift, Microsoft Azure Synapse, and Google BigQuery.

Pros:

  • Managed service: Cloud providers handle hardware, infrastructure, and software updates.
  • Scalability: Resources like storage and computing power can be easily adjusted.
  • Lower upfront costs: No need to invest in physical hardware.

Cons:

  • Less control: Limited ability to customize or optimize the system for specific workloads.
  • Usage costs: Billing based on usage can result in unpredictable costs during high demand.

Hybrid Approach​

Some organizations use both on-premise and cloud-based data warehouses for flexibility.

Pros:

  • Backup and disaster recovery: The cloud can serve as a backup to on-premise data systems.