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How Does Cloud Data Warehouse Work?

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How Does Cloud Data Warehouse Work?

Published: 2023/12/07

4 min read

Warehousing – a concept that started centuries ago

Around 150 BCE, the ancient Romans found themselves at a crossroads when they recognized that the trade dynamics, coupled with a surge in goods, had reached a tipping point. It was clear: they needed more room to keep up with the ever-growing demand. And so, they built the Horrea Galbae, which is now regarded as the first warehouse complex ever created.

Years later, in the late 1970s, organizations faced a turning point in data management. Overwhelmed by vast and complex data sets, they realized that traditional data handling methods were no longer adequate. Researchers from IBM came up with the concept of data warehousing — a well-organized hub where diverse data could find a home and be thoroughly analyzed to extract meaningful insights.

Then, at some point in the 2010s, companies like Amazon asked themselves: what would happen if you combined a data warehouse with cloud computing? This is when cloud-based data warehousing entered the scene, and experienced dedicated cloud consulting services teams became increasingly needed.

What is a cloud data warehouse?

A cloud data warehouse is basically a type of data warehouse that is built and hosted on cloud platforms. It serves as a centralized repository for storing, managing and analyzing large volumes of data.

You can picture a cloud data warehouse as an expansive virtual library where every book symbolizes a piece of company data. Within this digital realm, text analysts diligently decipher the meaning of each book, uncovering insights as if unraveling messages hidden between the lines.

This metaphor aims to illustrate why cloud data warehousing plays a vital role in enhancing business intelligence and facilitating informed decision-making. It simply empowers organizations to leverage advanced data analytics based on cloud-based machine learning software and unlock valuable insights that can further optimize their operations and open up new, previously unavailable business opportunities.

Read more: Cloud workforce

How does a cloud data warehouse work?

It all starts with collecting raw data from various sources such as databases, logs and external platforms. The data undergoes the Extract, Transform, Load (ETL) process to make sure it’s structured properly and meets quality standards.

Once prepared, data finds its place inside the cloud data warehouse where it is stored and later categorized in a way that makes it easy to retrieve and analyze it.

The subsequent crucial step concerns refining and restructuring data. This process includes meticulously removing errors and discrepancies to guarantee the data’s accuracy and coherence.

Finally, data scientists step in to begin the process of data analysis. They use a specific language, often SQL, to interact with the data warehouse, extracting meaningful insights. To put it differently, they navigate through the organized information to find answers to specific questions and aid organizations in making more informed business decisions.

Notable cloud data warehouse vendors

Among the prominent vendors that provide scalable and flexible cloud data warehouse tools are Amazon, Google and Microsoft. Their respective platforms — Amazon Redshift, Google BigQuery and Microsoft Azure — offer distinctive features and pricing structures, catering to diverse business needs and requirements.

Benefits of a cloud data warehouse

Cloud data warehouse solutions offer several benefits that make them attractive for organizations that want to be able to manage and analyze large volumes of data. Here are the top five:

Scalability — Cloud data warehouses can handle growing data volumes by expanding their resources horizontally. This means that, as data needs increase, the infrastructure seamlessly grows to ensure continued performance and efficiency.

Flexibility — Cloud-based data warehouse solutions can support many different types and structures of data. This enables users to store and analyze diverse data formats, creating a comprehensive view of their information.

Security — Cloud data warehouses use robust measures to protect data integrity and confidentiality. Those include access control, encryption and compliance with the latest industry cloud security standards.

Cost efficiency — Using a cloud data warehouse involves strategically managing expenses by adopting flexible payment models. These models are typically tailored to actual resource usage, enabling organizations to pay only for the services and resources they use, thus avoiding any upfront investments.

Zero maintenance — When using a cloud data warehouse, it is the provider who handles all maintenance tasks, including system updates and infrastructure management. As a result, organizations can focus solely on extracting insights from the data, without the burden of taking care of day-to-day technical responsibilities.

Traditional data warehouse vs cloud data warehouse

Traditional data warehouses are built on-site with fixed infrastructure, which requires significant initial investments and ongoing manual maintenance. In contrast, cloud data warehouses utilize remote computing services, offering scalability, adaptability and cost-effectiveness through flexible payment models.

We can help you set up and manage your own cloud data warehouse

If your curiosity about acquiring and using a cloud data warehouse has been sparked by this article or any other source, it’s important to acknowledge that there isn’t just one universal cloud data warehouse solution. Given that each organization has unique requirements, it is crucial to thoroughly evaluate what aligns with your needs before making any decisions — and then try to identify the cloud warehouse software that best suits your business.

The whole process of finding the right cloud data warehouse can be overwhelming, especially considering all the technical details, changes in how things work and the costs involved. But here’s the good news: you don’t have to figure it out on your own. Our team of experts is available to help you navigate the complexities of choosing the best cloud solutions for your needs. Reach out via the contact form to discuss your company’s requirements and leverage our expertise.

About the authorSoftware Mind

Software Mind provides companies with autonomous development teams who manage software life cycles from ideation to release and beyond. For over 20 years we’ve been enriching organizations with the talent they need to boost scalability, drive dynamic growth and bring disruptive ideas to life. Our top-notch engineering teams combine ownership with leading technologies, including cloud, AI, data science and embedded software to accelerate digital transformations and boost software delivery. A culture that embraces openness, craves more and acts with respect enables our bold and passionate people to create evolutive solutions that support scale-ups, unicorns and enterprise-level companies around the world. 

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