How cloud data storage providers can benefit from a pricing benchmark

Why use a field test/reference price?

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 manage themselves remotely, such as cloud data warehouses, have become an integral part of business strategy, but this change has accelerated an already competitive market. A price benchmark helps companies recognize vendors that stand out in the field.

Cloud data warehouses analyze data at high speed to deliver real-time analysis and actionable insights. Data-driven organizations can use data warehouses and relational analytics 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 performs at the highest level of cost performance to meet business requirements and budget.

A benchmark test provides an overview of an established metric for a service or infrastructure, resulting in demonstrable evidence of the solution’s capability. Customers can understand how vendor solutions compare in similar situations. A pricing benchmark establishes how costs relate to specific performance features, such as speed or latency, and can result in verifiable evidence of value for money. Competing vendors are ranked from highest to lowest cost against a series of queries, to produce an overview of comparable configurations.

Provider services can often appear similar to customers and when cost vs. package marketing material is based on provider-generated statistics, customers can lose confidence in the solution. Data storage vendors must make a case for how their system compares and outperforms competitors 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 benchmark price. The final report provides an invaluable level of information on the prices and operations of the chosen competitors, allowing vendors to strategize the cost versus scope and scale of solution design.

Price Vs Performance

Cost is one of the main drivers of business decisions, as solutions must be tailored to financial situations. Customers are often attracted 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 value endorsements can have an impact.

The market for cloud data warehouses is large, with new companies emerging all the time and established providers developing new services and updating current packages to stay ahead. Frequent switching of services and costs can lead to frustration and confusion, particularly when providers already offer multiple service packages at various prices. This can also make it difficult for customers to compare similar solutions.

Benchmarks indicate the level at which systems are operating and can point to key financial metrics such as price per query (regardless of how long it takes). 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 fully established and professional standard for systems. Solutions are configured to optimize for performance so results are based on your maximum service level and cluster sizes are comparable to achieve similar hourly costs. This provides a higher level of insight into how individual providers value similarities in performance.

Benchmark tests attempt to align hardware and software systems for comparable scenarios. Since it can be difficult to compare fully managed cloud data storage platforms, hourly pricing can be used as a base. By drilling down into the elapsed time of the test (beyond the fastest running query) and the cost of the platform, analysts can draw conclusions about the overall price-performance of a platform.

Reports that provide a fully transparent overview of how tests are performed allow vendors to draw their own conclusions from the results, as well as provide confidence and credibility in how the test was carried out. A step-by-step account of the test helps vendors or customers to recreate the test themselves, to double-check the results, or to re-run the configuration after changes have been made.

The optimal time for cloud data warehouses

Marketing cloud data storage solutions can be challenging when organizations are looking for low-cost solutions or don’t understand the full capabilities of the systems. Digital transformation has accelerated as companies turned to remote work during the pandemic and workers increased demand to work from home. Now is the optimal time to market data warehouses as companies look to expand their analytics capabilities, but with a market full of vendors, it’s hard to stand out from the crowd.

Price comparison tests provide evidence of cost performance compared to chosen competing 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 collateral and can be the deciding factor in a customer’s business decision.

Contact GigaOm’s sales team today to learn more about Data Warehouse Test Environments.

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