With the emergence of cloud computing, companies are faced with two options: to store their data on-premises or in a cloud data warehouse. While more and more companies are moving to cloud data warehouses, there still are advantages unique to having all your company data in a local server.

Wondering which option should your business go for? Let’s look into the pros and cons of traditional on-premise data warehouse vs cloud computing before making your call!

On-Premise Data Warehouse

Advantages

• Control: On-premise data warehouses give companies complete control over the hardware and software used, allowing for greater customization and control over the system.

• Cost: While the upfront cost of an on-premise data warehouse can be high, it can be more cost-effective over the long term as compared to paying for a cloud service.

• Performance: As data is stored locally, this type of data warehouse typically offers better performance and faster query speeds than cloud-based data warehouses.

Disadvantages

• Scalability: On-premise data warehouses can be difficult and expensive to scale. This is due to companies having to invest in additional hardware and software to accommodate growth in data volume.

• Maintenance: On-premise data warehouses require dedicated resources to manage and maintain the hardware and software, which can be both time-consuming and expensive.

• Limited accessibility: This type of data warehouse can only be accessed from within the company's network, which can be a disadvantage for companies with remote employees or anyone who need to access data from outside the network.

• Integration: Custom integration systems might need to be developed when integrating on-premise data warehouses with third-party tools and software.

Cloud Data Warehouse

Advantages

• Scalability: Cloud data warehouses can scale easily and quickly to accommodate larger data sets and increasing demands for processing power.

• Cost savings: Cloud data warehouses typically offer pay-as-you-go pricing models, allowing companies to avoid upfront hardware costs and only pay for the resources they use.

• Accessibility: As data is stored in the cloud, it can be accessed from anywhere as long as there is an internet connection, allowing for greater flexibility in accessing and analyzing data.

• Maintenance: Cloud data warehouses are typically managed and maintained by the cloud service provider, eliminating the need for companies to dedicate resources to managing hardware and software.

• Integration: Cloud-based data warehouses often offer integrations with popular data visualization and analytics tools, making it easier to analyze and visualize data.

Disadvantages

• Dependence on internet connectivity: Cloud data warehouses require a reliable internet connection to access and use, which can be a disadvantage in areas with poor connectivity.

• Data transfer costs: Moving large amounts of data to and from this type of data warehouse can be expensive, especially if the company has to pay for data transfer costs.

• Limited control: Companies may have limited control over the hardware and software used in a cloud data warehouse, which can make it harder to customize the system to their specific business needs.

What About Security?

For those on the fence about migrating their data warehouse to the cloud, many often have some doubts concerning security. In fact, cloud data warehouses offer robust security features from elementary to advanced requirements. They also offer tools for access control and audit, as well as services to defend against breaches.

However, it is also important to note that most of these tools may be new and unfamiliar in comparison to an on-premise environment.