April 4, 2023

What Makes Multicloud Data Warehouse Solutions So Expensive

Before committing to multicloud data warehouse solutions, organizations should weigh all the options and determine which one is the best for them.


Before committing to multicloud data warehouse solutions, organizations should weigh all the options and determine which one is the best for them.

At the end of the day, it is about return on investment. Multicloud warehousing enables the usage of multiple cloud platforms simultaneously to cover as much ground as possible. 

Different cloud providers offer different benefits. Some excel in certain areas while lacking in others. It makes sense to opt for the very best and benefit from improved:

  • Flexibility
  • Scalability
  • Performance
  • Security

The benefits are appealing, and it is up to the organizations to go with solutions that mesh well with other business processes. 

Some argue that costs should not be the first consideration if one is thinking long-term pursuing success. 

Having said that, disregarding the money that goes into the venture is hardly a sound strategy. 

Let’s take a look at what makes up the lion’s share of multicloud data warehouse solution expenses and how to approach them to come up with the best solution.

On-Site Storage and Cloud Storage Solutions

The first item on the list is determining the data location. There are two notable options enterprises consider—cloud-based solutions that are hosted online or on-premise hardware.

The current trend is in favor of utilizing clouds at least partially. If the data warehouse is in place, there is no need to run everything with on-premise solutions, especially if it reduces costs associated with electricity, property taxes, and rent, for example.

Cloud data warehouses like Redshift, Snowflake, and BigQuery are the go-to options for organizations that care about speed. Not to mention that you are in complete control and do not have to rely on a third-party location. 

Data warehouses are also known as a “hot” storage solution. The name stems from the performance and speed. When the warehouse is used to access the data often and from multiple people, the solution has to be optimized.

It is not as simple as learning how to upload photos to iCloud for personal reasons from your laptop or smartphone. 

How large the enterprise is, whether you build everything from scratch, maintenance, and other elements make it difficult to figure out an accurate estimate.

Here’s a breakdown of the components that determine cloud data warehouse costs.

Labor Costs

Labor costs often add up to become one of the largest expense sources for maintaining everything in check. 

Because the data warehouse is complicated, it is up to the organization to assemble the right personnel.

Safety nets that are in place can only offer so much. It is still possible for an entire system to go down, and reviving it without expert knowledge could prove too difficult.

IT personnel in charge of managing data warehouses consists. but are not limited to:

  • Analysts
  • Developers
  • System managers
  • Database architects

Finding someone who understands the craft well and is flexible enough to adapt to different circumstances is a challenge in itself. 

Organizations spend thousands of dollars every month on salaries. The salaries also increase depending on factors like work hours, market rate trends, and cost of living in the area.

It is possible to outsource some tasks, but if the data warehouse is crucial for the organization, the people in charge of it should be on premise and easily accessible when necessary.

Visualization Tools

Data warehouse solutions are often paired with business intelligence and visualization tools. Data storage is intricate, and it helps a lot when you have visual aids to depict the information.

It is much easier to read the situation with charts, graphs, and various reports in front of you. 

BI does wonders for processing vast amounts of data. Going through everything manually is a fool’s errand these days. It makes sense to automate the process with the help of smart software that is often equipped with artificial intelligence. 

According to Better Buys, business intelligence software prices can range from as little as a monthly $10 fee per user up to hundreds of thousands of dollars. And the costs come not just from the tools themselves. 

Organizations also have to be wary of expenses from implementing the services as well as providing basic training and support. 

ETL Tools

Enterprises need ETL software to move data from the source location to the warehouse. ETL stands for Extract, Transform, and Load. 

Different platforms have different price models, and it is crucial to confirm that your choice also supports the database of your choice. Incompatibility will pose obstacles when trying to sync the data.

The tricky thing about ETL pricing is that there are four different models:

  • Step Costs
  • Mixed costs
  • Variable costs
  • Fixed costs

The most common is the variable one. The package starts with a great offer (a free trial, for instance) to get you hooked, but it scales depending on how much you are doing with the service.

As you continue to expand, your initial expenses will increase exponentially, so do not be surprised to overpay if you do not take all the variables into account.

For consistency, it is much better to go with either the stepped or fixed model. You know what to expect, and the expenses will remain consistent. 

The visual below illustrates how the ETL pricing models are:

Opportunity Costs

Opportunity costs are easy to overlook when the people in charge of managing everything focus entirely on developing the data warehouse.

Let’s say that your original projection of finishing everything in three months turns out to be a year-long project. It means months of time spent dedicating resources and falling behind the competition in other areas.

Money dedicated to overcoming the unforeseen challenges could also set the launch of your new product or service.

Next, manpower that has to shift attention to working on the data warehouse has to abandon other areas. And it is not necessarily just the IT department. Others involved also have their hands full.

Imagine what it would mean for an engineering team to work on the data warehouse and not pay enough attention to a critical IT infrastructure within an organization. 

Missing the signs that there is something because you are too focused on developing the cloud data warehouse could lead to serious problems.


All in all, even if multicloud data warehouse solutions are expensive, they still bring a plethora of benefits to organizations. Being in complete control and making the most out of smarter and more accurate insights on your operations with the help of the data sets up ventures for success.

It is a significant investment, but one worth it nonetheless. It is up to you to research the available options and create a plan to find the best possible solution that fits your budget.


What is multicloud data warehousing?

Multicloud data warehousing refers to a strategy that lets organizations leverage different cloud platforms simultaneously to store and analyze data.

What are the benefits of multicloud data warehousing?

The main benefits are flexibility, security, scalability, and improved performance.

What are the main expenses associated with multicloud data warehousing?

Opportunity costs, business intelligence solutions, labor costs, and ETL tools are the main expenses.

Who maintains the data warehouse?

The IT personnel in charge of maintaining everything usually consists of analysts, backend developers, database architects, and system managers.

Why is it important to get visualization tools?

Visualization tools offer a better understanding of how to approach and read the available data. 

What is the best FTL pricing model?

Out of the four pricing models, stepped or fixed are the go-to options for the sake of consistency in your budget.

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Aryan Vaksh

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