What is a cloud data warehouse and how does it work?

An organization’s ability to effectively manage data—whether outgoing or incoming—is vital.

If you’re looking to improve your organization’s capacity to analyze data, you’ve likely come across the term “cloud data warehouse.” But what exactly is a data warehouse? How does it work? And does your organization need one?

To answer these critical questions, let’s unpack the concept of a data warehouse from its origins.

What is a data warehouse?

A data warehouse is a system through which data is collected and managed. It enables an organization to analyze information from various sources, thereby enhancing business intelligence.

Data warehouses have existed since as far back as the late 1980s. They emerged from a need for information to flow from operational systems to decision-making support systems.

What is a cloud data warehouse?

Since their inception, data warehouses have continued to evolve with the shifts and emerging needs of the business landscape. With increased global digitization, organizations have immense amounts of data to analyze round the clock.

A cloud data warehouse (cloud DWH) system makes it possible to collect, store, retrieve, and analyze data on the cloud. This has a myriad of benefits. For one, it does away with the need for hardware, server rooms, and dedicated IT teams to maintain these physical systems within an organization. In addition, businesses could unlock as much as $1 trillion in value by adopting the cloud, according to McKinsey research.

How does a cloud-based data warehouse work?

Traditional data warehouses have a three-level architecture consisting of the bottom, middle, and top tiers. Respectively, these refer to the server where data is stored, the analytics engine that facilitates data analysis, and the front end, which serves as an interface through which users can carry out different functions.

Over time, as the amount of data that organizations work with has increased significantly and become more complex, classic data warehouse systems have proven limiting. They have drawbacks such as a lack of customization and restrictive reporting logic.

Cloud data warehouses, therefore, emerged as a way to address the drawbacks of their traditional counterparts. Hosted online, they create virtual environments through which different teams within an organization can access and work with data sets. For instance, a cloud data warehouse can collate data on customers, following which the marketing team can build consumer profiles for targeted marketing campaigns, the customer relations team can keep records of customer queries, and the IT team can manage how the data is stored or visualized.

Here’s an overview of cloud data warehouse architecture by different providers:

SAP cloud data warehouse

SAP’s data warehouse cloud combines data management and data analytics into a single service. Users can create virtual spaces where data can be added from different SAP and non-SAP sources. The data can then be modeled, queried, and analyzed.

Microsoft Azure cloud data warehouse

Microsoft Azure combines the capabilities of a search query language (SQL) data warehouse with a cloud-based computing platform. Azure enables users to migrate data from an on-premise data warehouse or other sources. It can then process the data in large quantities and facilitate storage, querying, and retrieval.

Snowflake cloud data warehouse

Snowflake works as a purely cloud-based SQL data warehouse. It can separate components such as service, storage, and user management, but also link them if needed. Moreover, it handles different aspects of data management such as optimization and data protection, so users can utilize data without having to manage it directly.

Organizations have varying needs when it comes to data, hence the different options and attributes of each cloud-based data warehouse.

Drive value with Lytics

Businesses that receive, process, and send out a lot of data frequently should consider using a data warehouse to manage all that information effectively. Yet, even with a data warehouse in place, many organizations still face a significant challenge: How to turn their immense amounts of data into actionable insights.

That’s where Lytics comes in. At Lytics, we believe in helping companies transform how they connect with people. We offer a range of business solutions that offer integration with leading cloud-based data warehouses.

For instance, with Lytics Cloud Connect, you can take customer data from your cloud data warehouse and create specific segments. That way, you can personalize digital marketing campaigns and optimize how much you spend on them. Research shows that personalized communication is a key driver of success.

Cloud Connect can sync with the top cloud data warehouse providers including Google BigQuery, Snowflake, Amazon Redshift & Microsoft Azure. And the best part? It also works with over 40 social media platforms and digital content management tools such as MailChimp, Google Ads, and Contentful.

To learn more about how Lytics can drive value for your business, talk to one of our experts or get started with a free trial.