Why Benefits of Data Warehouse Outweigh the Financial Cost and How to Reduce the Cost of Development

Any organization that’s invested in an Analytics tool like Tableau, Power BI, Looker, etc. knows that they’re only as good as the data you feed them. Challenges such as disparate sources, inconsistent data formats, and slow legacy systems are just some of the roadblocks that stand in the way of getting the insights you need from your BI reporting and analytics tool.

A common solution to this challenge is a data warehouse that enables data management, analytics, and advanced data science. The data warehouse helps organizations to facilitate data-driven decision making, find cost savings, improve profitability, and the list goes on. No matter the industry, size of the organization, technology involved, or data savviness, our clients always ask us the same question: how do the benefits of a data warehouse justify the cost?

What are the costs of building a modern data warehouse?

Before diving into the many reasons why the benefits of a data warehouse are worth the costs to build it, let’s spend a bit of time discussing the two main investments.

The first major investment will be either hiring a consulting firm to develop your modern data warehouse or dedicating internal resources to the task. By hiring data consultants, you introduce additional costs in consulting fees, but yield results much quicker and therefore save time. If you choose to create an internal task force for the job, you reduce upfront costs, but altering day-to-day functions and the inevitable learning curve lead to longer development timelines.

data warehouse cost benefit analysis

The second investment is almost always necessary as you will need a tech stack to support your modern data warehouse. This may simply involve expanding or repurposing current tools or it could require selecting new technology. It’s important to note that pricing is different for each technology and varies greatly based on your organization’s needs and goals.

It typically involves paying for storage, computing time, or computing power, in addition to a base fee for using the technology. In total, this can typically incur a yearly starting cost of $25,000 and up. To make it easier, each of the major data warehouse technology stacks (Amazon Redshift, Snowflake, and Microsoft Azure SQL Database) offer cost estimating tools. With a clearer understanding of what your costs will look like, let’s jump into why they are worth it.

Why consultants are worth the additional costs.

While your current IT team likely has an intimate knowledge of your data and the current ecosystem, consultants offer benefits as well. Since consultants are dedicated full time to building out your modern data warehouse, they are able to make progress much quicker than an internal team would. Additionally, since they spend their careers developing a wide variety of analytics solutions, they may be more up to date on relevant technology advancements, have experience with various forms of data modeling to evaluate, and most importantly, they understand how to get business users to actually adopt the new solution.

At 2nd Watch, we have seen the most success by bringing in a small team of consultants to work side by side with your IT team, with a shared goal and vision. This ensures that your IT department will be able to support the modern data warehouse when it is completed and that the solution will address all of the details integral to your organization’s data. Considering the wealth of experience consultants bring to the table, their ability to transfer knowledge to internal employees, and the increased speed of development, the high ROI of hiring consultants is unquestionable.

 

Download Now: A Holistic Approach to Cloud Cost Optimization [eBook]

 

Using a Modern Data Warehouse costs you less than using a traditional data analytics system you may currently have in place.

While this is a considerable amount of money to invest in data analytics, many of your current technology investments will be phased out, or the costs will be reduced using modern technology. These solutions alleviate your IT team from cumbersome maintenance tasks through automatic clustering, self-managed infrastructure, and advanced data security options. This allows your IT team to focus on more important business needs and strategic analytics.

With the volume and variety in data organizations track, it’s easy to find yourself stuck with messy data held in siloed systems. Modern data warehouses automate processes to eliminate duplicate information, reduce unnecessary clutter, and combine various sources of data together which enables you to save money by storing data efficiently. Think of it this way, if your data experts struggle to find key information, so does your technology. The extra compute time and storage costs more than you would expect, implementing a system that stores your data logically and in a streamlined manner greatly reduces these costs.

Advanced analytics unlocks insights, enables you to respond to events quicker, and optimizes key decision-making activities.

While it is more difficult to quantify the ROI here, dashboards and advanced analytics greatly enhance your employee’s ability to perform well in their job and save money. Regardless of your industry, using a modern data warehouse to drive analytics that empowers employees to perform better in several ways:

  • Dashboards dramatically decrease the time employees spend finding and organizing the data. For many of our clients, reports that once took analyst weeks of effort to are now able to automatically aggregate in seconds.
  • Accurate data empowers better decision-making and yields creative problem-solving. You have the right information quicker.
  • Real-time analytics enables you to quickly respond to significant business events. This gives you a competitive edge since you can easily retain customers, spot inefficiencies, and respond to external influences.
  • Predictive analytics save you money by finding opportunities before you would need to act.

Developing a full-scale data warehouse requires time and money that may not be available at the moment. That being said, the benefits of a data warehouse are necessary to remain competitive. To address this discrepancy, Aptitive has found a solution to help you build a modern data warehouse quicker and without the large upfront investment. A modular data warehouse contains key strategic data and ensures that you gain advantages of analytics almost immediately. On top of that, it provides a scalable foundation that you can add data to overtime until you incorporate all the data necessary for your business functions.

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For more details about implementing a modular data warehouse, check out this link or reach out to us directly to get started on your modular data warehouse.

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Managed Cloud Services: Optimize, Reduce Costs, and Efficiently Achieve your Business Goals

Cloud adoption is becoming more popular across all industries, as it has proven to be reliable, efficient, and more secure as a software service. As cloud adoption increases, companies are faced with the issue of managing these new environments and their operations, ultimately impacting day-to-day business operations. Not only are IT professionals faced with the challenge of juggling their everyday work activities with managing their company’s cloud platforms but must do so in an timely, cost-efficient manner. Often, this requires hiring and training additional IT people—resources that are getting more and more difficult to find.

This is where a managed cloud service provider, like 2nd Watch, comes in.

Managed Cloud Service Provider

What is a Managed Cloud Service Provider?

Managing your cloud operations on your own can seem like a daunting, tedious task that distracts from strategic business goals. A cloud managed service provider (MSP) monitors and maintains your cloud environments relieving IT from the day-to-day cloud operations, ensuring your business operates efficiently. This is not to say IT professionals are incapable of performing these responsibilities, but rather, outsourcing allows the IT professionals within your company to concentrate on the strategic operations of the business. In other words, you do what you do best, and the service provider takes care of the rest.

The alternative to an MSP is hiring and developing within your company the expertise necessary to keep up with the rapidly evolving cloud environment and cloud native technologies. Doing it yourself factors in a hiring process, training, and payroll costs.

While possible, maintaining your cloud environments internally might not be the most feasible option in the long run. Additionally, a private cloud environment can be costly and requires your applications are handled internally. Migrating to the public cloud or adopting hybrid cloud model allows companies flexibility, as they allow a service provider either partial or full control of their network infrastructure.

What are Managed Cloud Services?

Managed cloud services are the IT functions you give your service provider to handle, while still allowing you to handle the functions you want. Some examples of the management that service providers offer include:

  • Managed cloud database: A managed database puts some of your company’s most valuable assets and information into the hands of a complete team of experienced Database Administrators (DBAs). DBAs are available 24/7/365 to perform tasks such as database health monitoring, database user management, capacity planning and management, etc.
  • Managed cloud security services: The public cloud has many benefits, but with it also comes security risks. Security management is another important MSP service to consider for your business. A cloud managed service provider can prevent and detect security threats before they occur, while fully optimizing the benefits provided by a cloud environment.
  • Managed cloud optimization: The cloud can be costly, but only as costly as you allow it to be. An MSP can optimize cloud spend through consulting, implementation, tools, reporting services, and remediation.
  • Managed governance & compliance: Without proper governance, your organization can be exposed to security vulnerabilities. Should a disaster occur within your business, such as a cyberattack on a data center, MSPs offer disaster recovery services to minimize recovery downtime and data loss. A managed governance and compliance service with 2nd Watch helps your Chief Security and Compliance Officers maintain visibility and control over your public cloud environment to help achieve on-going, continuous compliance.

At 2nd Watch, our foundational services include a fully managed cloud environment with 24/7/365 support and industry leading SLAs. Our foundational services address the key needs to better manage spend, utilization, and operations.

What are the Benefits of a Cloud Managed Service Provider?

Using a Cloud Managed Service Provider comes with many benefits if you choose the right one.

Some of these benefits include, but are not limited to: 

  • Cost savings: MSPs have experts that know how to efficiently utilize the cloud, so you get the most out of your resources while reducing cloud computing costs.
  • Increased data security: MSPs ensure proper safeguards are utilized while proactively monitoring and preventing potential threats to your security.
  • Increased employee production: With less time spent managing the cloud, your IT managers can focus on the strategic business operations.
  • 24/7/365 management: Not only do MSPs take care of cloud management for you but do so 100% of the time.
  • Overall business improvement: When your cloud infrastructure is managed by a trusted cloud advisor, they can optimize your environments while simultaneously allowing time for you to focus on core business operations. They can also recommend cloud native solutions to further support the business agility required to compete.

Why Our Cloud Management Platform?

With cloud adoption increasing in popularity, choosing a managed cloud service provider to help with this process can be overwhelming. While there are many options, choosing one you can trust is important to the success of your business. 2nd Watch provides multi-cloud management across AWS, Azure, and GCP, and has a special emphasis of putting our customers before the cloud. Additionally, we use industry standard, cloud native tooling to prevent platform lock in.

The solutions we create at 2nd Watch are tailored to your business needs, creating a large and lasting impact on our clients. For example:

  • On average, 2nd Watch saves customers 41% more than if they managed the cloud themselves (based on customer data)
  • Customers experience increased efficiency in launching applications, adding an average 240 hours of productivity per year for your business
  • On average, we save customers 21% more than our competitors

Next Steps

2nd Watch helps customers at every step in their cloud journey, whether that’s cloud adoption or optimizing your current cloud environment to reduce costs. We can effectively manage your cloud, so you don’t have to. Contact us to get the most out of your cloud environment with a managed cloud service provider you can trust.

-Tessa Foley, Marketing

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Multi Cloud Challenges and Solutions: Cloud Cost Sprawl and Integration

Multi-cloud strategies suggest that enterprises run their applications and workloads in whatever cloud environment makes the most sense from a cost, performance and functionality perspective. That’s the theory anyway. In practice however, a multi-cloud environment requires a fair amount of tooling. Many enterprises grapple with integrating technologies created by competing suppliers in the hopes of achieving the elusive, single pane of glass.

Regardless of the challenges, a multi-cloud strategy has inherent benefits. Understanding problems upfront, and mitigating the consequences, is step one to realizing those benefits.

Multi-Cloud Challenges and Solutions: Cloud Cost Sprawl and Integration

Problem: Cloud cost sprawl

Typically, the first migration in a company is initiated as a cost saving measure. Maybe you’re moving from CAPEX to OPEX, or joining a monthly subscription plan, so there’s a clear strategy and goal. As you move deeper into the cloud, developers see the potential of new applications, and opportunities for innovation. The shiny new tools and enhanced flexibility of the cloud can lead to unexpected and expensive surprises.

All too often, an organization moves to a monthly subscription model and slowly but surely, everybody increases and expands their use of services. Next thing you know, you’re getting huge bills from your cloud provider that nearly equal or exceed the cost of buying equipment. Cloud cost sprawl is the expensive result of unrestricted and unregulated use of cloud resources. It’s so rampant that an estimated 35% of enterprise cloud spend is wasted via cloud cost sprawl.

Solution: Cloud cost optimization

There’s more than one way to wrangle cloud use, achieve your goals, and maintain your budget while cutting out waste. Cloud cost optimization is a complex organizational process that runs parallel to cloud migration and cloud-based service use.

With simplified cloud billing, an understanding of how cloud cost sprawl happens, why cost optimization is important, and an ongoing optimization effort – large enterprises can save up to 70%. Through a combination of software, services and strategy, cost optimization helps businesses immediately achieve significant cost savings.

Learn more in the links below and schedule your free, 2-hour, Cloud Cost Optimization Discovery Session with 2nd Watch cloud experts to discover how best to get started.

Problem: Environment integration

With various types of environments coming together in multi-cloud, it can be hard to integrate, interoperate, and move data across the infrastructure for performance and use. Each environment has its own managing and monitoring systems that require certain expertise.

Infrastructure as a service (IaaS), including cloud providers like AWS, GCP and Azure, are one layer of the environment – and higher level services, or platform as a service (PaaS), is another layer. Platforms like Salesforce and NetSuite offer additional tools to build within specific domains, but the challenge is bringing everything together.

Solution: Expertise and tools

If you don’t have the in-house knowledge for a multi-cloud environment, outsourcing cloud management to an expert who also provides guidance and direction for cloud growth is a cost-effective solution. Regardless of who is in charge of integration, cloud providers offer tools and services to help monitor and manage the infrastructure as a whole. Recently, services have been introduced to directly address integration with other environments in a multi-cloud infrastructure.

For example, Google’s latest service, BigQuery Omni, lets you connect, combine, and query data from outside GCP without having to learn a new language. AWS is taking a more multi-cloud approach with ECS and EKS Anywhere. There’s also Anthos on GCP, and Arc on Azure – all services that allow organizations to run containers in the environments of their choosing.

See how cloud providers are embracing the movement toward multi-cloud to make multi-cloud integration easier.

Managed Cloud Services

Accelerate the delivery of innovative solutions and gain competitive advantage, without impacting current operations, using 2nd Watch Managed Cloud Services. Your dedicated cloud experts provide a simple, flexible set of Day 2 operational services to support cost optimization, management, monitoring, and integration within a multi-cloud infrastructure. Contact Us to make multi-cloud a success at your organization.

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Steps to Continuous Cloud Optimization

Cloud optimization is an ongoing task for any organization driven by data. If you don’t believe you need to optimize, or you’re already optimized, you may not have the data necessary to see where you’re over-provisioned and losing spend. Revisit the optimization pillars frequently to best evolve with and take advantage of everything the cloud has to offer.

Begin with the end in mind

The big question is, where are you trying to go? This question should constantly be revisited with internal stakeholders and business leaders. Define the process that will get you there and follow the order of operations identified to reach your optimization goal. Losing sight of the purpose, getting caught up in shiny new tools, or failing to incorporate the right teams could lead you off path.

Empower someone to drive the process

This is pivotal because without this appointed person, cloud optimization will not happen. Give someone the power to drive optimization policies throughout the organization. Companies most successful in achieving optimization have a good internal mandate to make it a priority. When messages come from the top, and are enforced through a project champion, people tend to pay attention and management is much more effective.

Fill the data gaps

Cloud optimization is a data driven exercise, so you need all the data you can get to make it valuable. Your tools will be much more compelling when they have the data necessary to make smart recommendations. Understand where to get the data in your organization, and figure out how to get any data you don’t have. Verify your data regularly to confirm accuracy for intelligent decision making geared toward optimization.

Implement tagging practices

The practice of not only implementing, but also actively enforcing your tagging policies, drives optimization. Be it an environment tag, owner tag, or application tag, tags help you understand your data and what or who is driving spend.

Enforce accountability

While lack of tagging and data gaps prevent visibility, overprovisioning is also an accountability issue. Just look at the hundred plus AWS services alone that show up on a bill for an organization that’s a long-time user. It’s not uncommon for 20-30% of the total to be attributed to services they never even knew existed at the time they migrated to the cloud.

Hold your app teams accountable with an internal mechanism that lets the data speak for itself. It can be as simple as a dashboard with tagging grading, because everybody understands those results.

Rearchitect and refactor

Migrating to the cloud via a lift and shift can be a valuable strategy for certain organizations. However, after a few months in the cloud, you need to intentionally move forward with the next steps. Reevaluating, refactoring and rearchitecting will occur multiple times along the way. Without them, you end up spending more money than necessary.

Continuous optimization is a must

Optimization is not a one and done project because the possibilities are constantly evolving. Almost every day, a new technology is introduced. Maybe it’s a new instance family or tool. A couple years ago it was containers, and before that it was serverless. Being aware of these new and improved technologies is key to maintaining continuous optimization.

Engage with an experienced partner

There are a lot of factors to consider, evaluate, and complete as part of your cloud optimization practice. To maximize your optimization efforts, you want someone experienced to guide your strategy.

One benefit to partnering with an optimization expert, like 2nd Watch, is that an external partner can diffuse the internal conflicts typically associated with optimization. So much of the process is navigating internal politics and red tape. A partner helps meld the multiple layers of your business with a holistic approach that ensures your cloud is running as efficiently as possible.

-Willy Sennott, Optimization Practice Manager

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Cloud Optimization: Top 5 Challenges and Why Tools Can’t Solve Them

Optimizing your cloud is essential for maximizing budgets, centralizing business units, making informed decisions, and driving performance. Regardless of whether you’re already in the cloud or you’re just beginning to consider migrating, you need to be aware of the challenges to optimization in order to avoid or overcome them and reach your optimization goals.

1. Complexity

The most pervasive challenge of optimization in the cloud is the complexity of the task. Regardless of the cloud platform – AWS, Azure, Google Cloud, or a hybrid cloud strategy – the intricacies are constantly evolving and changing. Trying to stay on top of that as an individual business requires a good amount of time, resources, and effort. Adding new tools and processes to your cloud requires integration, stakeholder agreement, data mining, analysis, and maintenance. While the potential outcomes from optimization are business-changing, it’s an ongoing process with many moving parts.

2. Governance

Standardized governance frameworks bring decentralized business units and disparate stakeholders together to accomplish business-wide objectives. Shared responsibility, from central IT to individual app teams, prevents the costly consequences of overprovisioning.  While many organizations are knowingly overprovisioned, they can’t seem to solve the problem. Part of the issue is simply a lack of overall governance.

3. Data

Cloud optimization is a data driven exercise. If it’s not data driven, it’s not scalable. You need to maximize your data by knowing what data you have, where it is, and how to access it. Also important is knowing what data is missing. Many organizations believe they have complete metrics, but they’re not capturing and monitoring memory, which is a huge piece of the puzzle. In fact, memory is one of the most constrained points of data across organizations.

4. Visibility

Incredibly important within data discovery and data mapping is gaining visibility through tagging. Without an enforced and uniform tagging strategy as part of your governance structure, spend can increase without accounting for it. Tags provide insight into your cloud economics, letting you know who is spending what, what are they spending it on, and how much are they spending. It’s not uncommon to see larger organizations with a number of individual linked accounts and no one knows who they belong to. We’ve even found, after some digging, that the owners of those accounts haven’t been with the company for months! To get the cost saving benefits from cloud optimization, you need visibility throughout the process.

5. Technical expertise

You need a certain level of technical expertise and intuition to take advantage of all the ways you can optimize your cloud. Too often, techs aren’t necessarily thinking about optimization, but rather make decisions based on other performance or technical aspects. Without optimization at the forefront of these deterministic behaviors, the business drivers may not perform as expected. Partner with data scientists and architects to map connections between data, workloads, resources, financial mechanisms, and your cloud optimization goals.

Tools are part of the solution, but not the entire solution.

While tools can help with your cloud optimization process, they can’t solve these common challenges alone. Tools just don’t have the capability to solve your data gaps. In fact, one foundational issue with tools is the specific algorithms used to generate recommendations. Regardless of whether or not the tool has complete data, it will still make the same recommendations, thereby creating confusion and introducing new risks.

It takes work to get the best results. Someone has to first be able to deduce the information provided by your tools, then put it into context for the various decision makers and stakeholders, and finally, your application owners and businesses teams have to architect the optimization correctly to be able to take advantage of the savings.

In choosing the right tools to aid your optimization, be aware of ‘tool champions’ who create internal noise around decision making. New tools are launched almost daily, and different stakeholders are going to champion different tools.

Once you find a tool, stick with it. Give it a chance to fully integrate with your cloud, provide training, and encourage adoption for best results. The longer it’s a part of your infrastructure, the more it will be able to aid in optimization.

2nd Watch takes a holistic approach to cloud optimization from strategy and planning, to cost optimization, forecasting, modeling and analytics. Download our eBook to learn more about adopting a holistic approach to cloud cost optimization.

-Willy Sennott, Optimization Practice Manager

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5 Best Practices for Managing the Complexities of a Hybrid Cloud Strategy

Hybrid cloud strategies require a fair amount of effort and knowledge to construct, including for infrastructure, orchestration, application, data migration, IT management, and potential issues related to silos. There are a number of complexities to consider to enable seamless integration of a well-constructed hybrid cloud strategy. We recommend employing these 5 best practices as you move toward a multi-cloud or hybrid cloud architecture to ensure a successful transition.

Utilize cloud management tools.

Cloud management providers have responded to the complexities of a hybrid strategy with an explosion of cloud management tools. These tools can look at your automation and governance, lifecycle management, usability, access and more, and perform many tasks with more visibility.

Unique tooling for each cloud provider is especially important. Some partners may recommend a single pane of glass for simplicity, but that can be too simple for service catalogues and when launching new resources. The risk with going too simplistic is missing the opportunity to take advantage of the best aspects of each cloud.

Complete a full assessment of applications and dependencies first.

Before you jump into a hybrid cloud strategy, you need to start with a full assessment of your applications and dependencies. A common misstep is moving applications to the public cloud, while keeping your database in your private cloud or on-prem datacenter. The result is net latency drag, leading to problems like slow page loads and videos that won’t play.

Mapping applications and dependencies to the right cloud resource prior to migration gives you the insight necessary for a complete migration with uninterrupted performance. Based on the mapping, you know what to migrate when, with full visibility into what will be impacted by each. This initial step will also help with cloud implementation and hybrid connect down the line.

Put things in the right place.

This might sound obvious, but it can be challenging to rationalize where to put all your data in a hybrid environment. Start by using the analysis of your applications and dependencies discussed above. The mapping provides insight into traffic flows, networking information, and the different types of data you’re dealing with.

A multi-cloud environment is even more complex with cost implications and networking components. On-prem skills related to wide area network (WAN) connectivity are still necessary as you consider how to monitor the traffic – ingress, egress, east, and west.

Overcome silos.

Silos can be found in all shapes and sizes in an organization, but one major area for silos is in your data. Data is one of the biggest obstacles to moving to the cloud because of the cost of moving it in and out and accessing it. The amount of data you have impacts your migration strategy significantly, so it’s critical to have a clear understanding of where data may be siloed.

Every department has their own data, and all of it must be accounted for prior to migrating. Some data silo issues can be resolved with data lakes and data platforms, but once you realize silos exist, there’s an opportunity to break them down throughout the organization.

An effective method to breaking down silos is by getting buy-in from organizational leaders to break the cultural patterns creating silos in the first place. Create a Cloud Center of Excellence (CCoE) during your cloud transformation to understand and address challenges within the context of the hybrid strategy across the organization.

Partner with proven experts.

Many companies have been successful in their hybrid cloud implementation by leveraging a partner for some of the migration, while their own experts manage their internal resources. With a partner by your side, you don’t have to invest in the initial training of your staff all at once. Instead, your teams can integrate those new capabilities and skills as they start to work with the cloud services, which typically increases retention, reduces training time, and increases productivity.

Partners will also have the knowledge necessary to make sure you not only plan but implement and manage the hybrid architecture for overall efficiency. When choosing a partner, make sure they’ve proven the value they can bring. For instance, 2nd Watch is one of only five VMware Cloud on AWS Master Services Competency holders in the United States. That means we have the verified experience to understand the complexities of running a hybrid VMware Cloud implementation.

If you’re interested in learning more about the hybrid cloud consulting and management solutions provided by 2nd Watch, Contact Us to take the next step in your cloud journey.

-Dusty Simoni, Sr Product Manager, Hybrid Cloud

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