The Cost of Snowflake vs On-Prem Data Solutions

3 years ago, I was head of data warehouse and BI at a market-leading insurance company, leading the development and operation team. Back then, we used to work with on-prem technology. Now I work with cloud-based platforms, mostly Snowflake, and I am really happy with that because it makes it easier to deliver real value but also because there is transparency about the cost.

When someone asks me to compare the cost of a cloud data platform with on-prem solutions, these are my first thoughts about the latter:

  • difficulties with planning cost and storage;
  • constant optimisation projects;
  • running out of resources;
  • overspending;
  • having to explain the cost;
  • and above all, slow response to business requirements.

Does this sound familiar?

Snowflake provides elegant solutions to all of these issues, many of which influence your budget indirectly but significantly.

Many sources comment on how much Snowflake costs and they will all tell you that the cost equals compute plus storage costs.

cost-compute-storage 

In theory, this is the correct way to calculate the Snowflake billing. However, comparing Snowflake costs this way to the cost of an on-prem data platform is fundamentally wrong. I’m now going to focus on the reasons and show you how to utilise your opportunities to the fullest.

1. Save оn maintenance

Тhe cost of maintaining an on-prem platform

One of the simplest differences between on-prem data analytics platforms and Snowflake is that on-prem data platforms require highly skilled IT professionals. They acquire(buy), install, monitor and upgrade the system, maintain hardware and software components, and take care of security and tuning. If you plan to use our data platform out of regular office hours or you need the data in the morning, you have to have a team to keep this system alive by taking night shifts.

This team could be a minimum of 3-4 full-time employees (or outsourced service) to ensure coverage. Of course, there are additional expenses related to recruitment, training, facilities and more.

Тhe Snowflake solution

Snowflake is a DaaS (Data-as-a-service) platform and its benefits include worldwide, on-demand accessibility, ability to easily move data, and low or zero platform maintenance.

This does not mean that your team will become redundant. Quite the contrary, doing meaningful work will also increase employee satisfaction and retention rate.

Think about how much business value your team could give focusing on solving business challenges. Snowflake will take care of all these tedious maintenance tasks.

You still need to create users, set up permissions and cost monitoring, but the administration of the Snowflake platform is very simple compared to on-prem systems.

cloud data platform-Snowflake
Figure 1: A cloud data platform, such as Snowflake, eliminates manual infrastructure tasks required by traditional cloud or on-premises. Image source: “5 Reasons to Modernize Your Data Warehouse with the Data Cloud”

2. Only pay for what you use

On-prem solutions require you to pay for system resources even if you’re not using them. Then there’s the question about careful planning to ensure that you do not run out of resources but you also need to pay for these in advance.

With Snowflake, you don’t pay for idle time and unused storage, and the cost for resources we use will be calculated on a per-second basis. The compute resource (warehouse) automatically starts, stops, scales up and down based on what you need.

The efficient use of resources is not only good for your wallet but also contributes to reducing your carbon footprint. This way, you are cutting costs and protecting the environment at the same time, which is a natural win-win situation.

3. Accelerate time to market

We know that slow response to changes will cost you a lot or even get you out of the business.

Answer faster with flexibility

Maybe you have got a new idea and would like to try it out. Or you suddenly need more resources because your delivery business is blooming? Or maybe you would like to save up money because your business has become dormant during the pandemic.

On-prem platforms slow down any changes to your infrastructure. This means that you cannot act fast enough in unpredictable situations, which hampers your business flexibility.

You don’t need to predict the unpredictable with cloud-based data platforms. You get near unlimited storage and compute resources, and scale up or down automatically to meet your demand right away.

Changes simplified

Snowflake handles structured and semi-structured data as well. Snowflake works for data lakes, data warehouses or other analytics solutions and there is no need to pay for transformation and transferring the data between different technologies.

Creating development/experiment/test environments is very simple too and can be done in minutes, which makes you forget about maintenance tasks, such as hinting and indexing.

Enable collaboration

One of Snowflake’s greatest benefits is that the same data can be accessed from anywhere in a matter of minutes using a secure connection.

You can set up secure data sharing or just create a clone of our data. Then your data team can play with it using their own resources without interfering with other processes. These solutions help to improve cooperation between business and IT professionals too.

You can clone the data without copying it or share it securely in a matter of minutes. This facilitates collaboration, allowing you to speed up both problem solving and decision making.

Accelerate time

4. Get transparency and full control over the cost

Expenditure control

Have you ever been asked how much has been spent on data analytics or what expenses the system has incurred so far that month? Surely, you have worked on a project on a strict budget and you were asked to prevent overspend.

Snowflake features a built-in resource monitor that gives you control over how much you spend. You can also set up monitoring and alerts, so you never miss important limits.

Let’s say an organisation has a $100 CRM budget and they would like to be notified when they reach it, so that all further processes can be suspended for the specific project. All you have to do is to create a CRM compute warehouse and allocate specific credit to it and set up the alerts.

Snowflake_cost_monitoring

Spotting redundancies

Nobody likes to pay for something that cannot be explained. But it is even worse when you spend your budget on resources you are not even using. Snowflake allows you to eliminate the cost of unused components once and for all.

Switching to this cloud-based solution, you will quickly start recognising opportunities for optimisation that you could not have seen previously. Paired with the perfect control over resources, this empowers you to reallocate the budget you have saved.

5. Additional cost optimisation features

Caching

Don’t pay for the reports, analytics or other queries that you have already run. Take advantage of caching and query results. It saves a lot of time and money.

Zero copy cloning

You can just use your existing environment and create new ones for development, testing and experimenting and you will only pay for storing the changes. Imagine a 1 million-record table; when only 100 records are changing, you will only pay for these 100 records.

Scaling compute resources

You don’t have to run all the use auto start/stop and scale capabilities for your warehouse because you’re not paying for idle time.

Summary

With its recent Record-Busting IPO and strong position on the market of Data Management Solutions, Snowflake is a solid choice even from a non-technical point of view.

Using a Snowflake cloud data platform will give you flexibility and simplicity far superior to on-prem solutions. This will enable you to react much faster and introduce infrastructural  changes, using your resources far more efficiently

It would be safe to say that the cost of on-prem solutions can be calculated as follows:

cost of on-prem solutions

Compared to on-prem solutions, Snowflake empowers you to take full advantage of your opportunities and this can be the most valuable element of this formula when you consider cost.

save-with-snowflake

Visit our blog to see more insightful content.

Infinite Lambda is an official Snowflake partner. We can help you get started by migrating your data and setting up your warehouse.

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