How cloud data warehouse vendors can benefit from a price benchmark

Why use a field test / price reference?

In recent years, the requirement for low-cost cloud solutions has increased, with more organizations choosing to work from home since the Covid pandemic. Services that allow organizations to be managed remotely, such as data warehouses in the cloud, have become an integral part of business strategy, but this change has accelerated an already competitive market. A price benchmark helps companies recognize vendors who excel in the field.

Data warehouses in the cloud analyze data at high speed to deliver insights and analytics in real time. Data-driven organizations can use data warehouses and relational analytical databases to perform advanced analytics in various areas of the business, such as marketing, credit risk assessment, and fraud detection. Therefore, it is imperative to integrate a system that operates at the highest level of performance for cost, so that it meets the requirements and budget of the business.

A benchmark provides an overview of an established metric for a service or infrastructure, resulting in demonstrable evidence of the solution’s capabilities. Customers can understand how vendor solutions compare in similar situations. A pricing benchmark establishes how costs relate to specific performance characteristics, such as speed or latency, and can result in verifiable evidence of value for money. Competitive vendors are ranked in terms of most to least expensive against a series of inquiries, to produce an overview of comparable configurations.

Provider services can often appear similar to customers, and when cost versus package marketing collateral is based on provider-generated statistics, customers can lose confidence in the solution. Data warehouse vendors must make a case for how their system compares to and outperforms the competition based on metrics aligned with customer needs. Financial implications and performance are critical areas of concern for customers as they affect total cost of ownership, value, and user satisfaction.

Suppliers can stay ahead of the market and improve profit margins with a reference price. The final report provides an invaluable level of information on the pricing and operations of chosen competitors, allowing vendors to strategize cost based on the scope and scale of the solution design.

Price Vs Yield

Cost is one of the main drivers of business decisions, as solutions must be tailored to financial situations. Customers are often drawn to lower-cost software without understanding how price relates to performance or scalability. Although the written literature establishes the importance of individual metrics, it can be difficult for organizations to understand this in terms of their own business. There is less reliance on internal marketing materials, which is where third-party endorsement of value can have an impact.

The market for cloud data warehouses is large, with continually emerging startups and established vendors developing new services and updating current packages to stay ahead of the game. Frequent changing of services and costs can lead to frustration and confusion, particularly when providers already offer multiple service packages at different prices. This can also make it difficult for customers to compare peer-to-peer solutions.

Benchmarks indicate the level at which systems are operating and can point to key financial metrics such as price per query (regardless of the time required). In turn, the literature can be designed around the market landscape for data warehouses and how the solutions support specific use cases. This can help clients understand the cost breakdown.

Credible test environments

Price performance tests derived from the industry standard TPC Benchmark ™ DS (TPC-DS) can provide a professional and fully established standard for systems. The solutions are configured to optimize your performance, so that results are based on your maximum level of service and cluster sizes are comparable to achieve similar hourly costs. This provides a higher level of insight into how individual vendors value similarities in performance.

Benchmarking attempts to align hardware and software systems for comparable scenarios. As it can be difficult to compare fully managed cloud data storage platforms, hourly pricing can be used as a basis. By delving into the elapsed time of testing (beyond the fastest-executing query) and the cost of the platform, analysts can draw conclusions about the overall price-performance ratio of a platform.

Reports that provide a completely transparent overview of how the tests are performed allow providers to draw their own conclusions from the results, as well as offer confidence and credibility in how the test was conducted. A step-by-step test account helps vendors, or customers, to recreate the assessment themselves, to verify the results, or to rerun the configuration after the changes have been made.

The optimal time for cloud data warehouses

Marketing cloud data storage solutions can be challenging when organizations seek low-cost solutions or do not understand all the capabilities of the systems. Digital transformation accelerated as companies turned to remote work during the pandemic and workers increased the demand for work from home. Now is the optimal time to commercialize data warehouses as companies look to expand their analytics capabilities, but with a full market of vendors, standing out from the crowd is difficult.

Price benchmarks provide evidence of cost performance against chosen competitive vendors, so customers gain a clear understanding of how cost is calculated and why solutions outperform rivals. Benchmark results can be included in the marketing assurance and can be the influencing factor in a customer’s business decision.

Contact the GigaOm sales team today to learn more about test environments for data warehouses.

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