How cloud data warehouse vendors can benefit from a price benchmark

Why use a Field Test/Price Benchmark?

Over the past few years, the requirement for low-cost cloud solutions has risen, with more organizations choosing to work from home since the Covid pandemic. Services that allow organizations to be managed remotely, such as Cloud Data Warehouses, have become an integral part of the business strategy, but this shift has accelerated an already competitive market. A price benchmark helps companies recognize vendors that excel in the field.

Cloud Data Warehouses analyze data at speed to deliver analytics and actionable insights in real time. Data-driven organizations can utilize data warehouses and relational analytical databases for advanced analysis on various areas of the business, such as marketing, evaluating credit risks and detecting fraud. It’s therefore imperative to integrate a system that functions with the highest level of performance for cost, so it meets business requirements and budget.

A benchmark test gives an overview of a set metric for a service or infrastructure, resulting in demonstrable evidence of the solution’s ability. Customers can gain an understanding of how vendor solutions compare in like-for-like situations. A price benchmark establishes how costs relate to specific performance features, such as speed or latency, and can result in verifiable evidence of value for money. Competitor vendors are rated in terms of most to least costly against a series of queries, to produce an overview of comparable configurations.

Vendor services can often appear similar to customers and when marketing material for cost vs package is based on vendor-generated statistics, customers can lose trust in the solution. Data warehouse vendors need to present an argument for how their system compares and outperforms competitors based on metrics aligned with customer needs. Financial implications and performance are critical areas of interest for customers as they impact total cost of ownership, value, and user satisfaction.

Vendors can stay ahead of the market and improve profit margins with a price benchmark. The end report gives an invaluable level of insight into the chosen competitors’ pricing and operations, allowing vendors to strategize on the cost against scope and scale of the solution design.

Price Vs Performance

Cost is one of the main drivers for business decisions, as solutions need to suit financial situations. Often customers are drawn to lower-cost software without understanding how the price relates to performance or scalability. Although written literature states the importance of the individual metrics, it can be hard for organizations to comprehend this in terms of their own business. There is less confidence in internal marketing materials, which is where third party endorsement of value can make an impact.

The market for Cloud Data Warehouses is large, with new start-ups continually emerging and established vendors developing new services and upgrading current packages to stay ahead. The frequent change to services and costs can lead to frustration and confusion, particularly when vendors already offer multiple service packages at various prices. This can also make it difficult for customers to compare solutions on a like-for-like basis.

Benchmarks indicate the level at which systems operate and can target key financial metrics, such as price-per-query (regardless of time taken). In turn, literature can be designed around the market landscape for data warehouses and how solutions support specific use-cases. This can help customers understand the breakdown of costs.

Credible Testing Environments

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

Benchmark tests try to align the hardware and software systems for comparable scenarios. As it can be difficult to compare fully managed cloud data warehouse platforms, price-per-hour can be used as the basis. By drilling down into the elapsed time of the test (past the fastest run query) and the cost of the platform, analysts are able to make conclusions on the overall price-performance of a platform.

Reports that offer a fully transparent overview of how the tests are performed allow vendors to draw their own conclusions from results, as well as offering trust and credibility in how the test was carried out. A step-by-step account of the test supports vendors, or customers, in recreating the assessment themselves, to corroborate results or rerun the configuration after changes have been made. 

The Optimal Time for Cloud Data Warehouses

Marketing cloud data warehouse solutions can be challenging when organizations are looking for low-cost solutions or they do not understand the full capabilities of the systems. Digital transformation accelerated as businesses turned to remote working during the pandemic and workers increased demand on working from home. It is now the optimal time to market data warehouses as businesses are looking to expand their analytical capabilities, but with a full market of vendors, standing out from the crowd is difficult.

Price benchmark testing delivers evidence of performance cost against chosen competitor vendors, so customers gain a clear comprehension of how cost is calculated and why solutions outrank their rivals. Results from benchmarks can be included in marketing collateral and can be the swaying factor in a customer’s business decision.

Contact GigaOm’s sales team today to learn more about the testing environments for data warehouses.