Cloud Data Warehouses - Mar 27 2020

Data Center vs Data Warehouse for Dummies

What’s a data center vs data warehouse? Easy answer. A data center is a physical place where servers are set up. A data warehouse is a data structure on a server, whether an on-premise data center or cloud-based. Read more.

What’s the difference between a data center and a data warehouse?

The difference between a data center and a data warehouse is easily seen: A data warehouse is a physical room or building where data servers and computers are stored. Whereas a data warehouse can’t technically be seen at all, it’s just a digital database in a server or computer. Per Wikipedia:

“A data center is a building, dedicated space within a building, or a group of buildings used to house computer systems and associated components, such as telecommunications and storage systems.”

“A data warehouse… is a system used for reporting and data analysis, and is considered a core component of business intelligence.”

For a bit of clarity and hierarchy, try this: Data is stored in a database, on a hard drive, in a server/computer, in a data center.

What is an on premise data center?

An on premise data center is data storage servers located on the premises of your company, or data warehouse provider/solution. Yes, it’s that dark, air-conditioned room you might walk by on the way to the office kitchen. In some cases, these can be huge rooms, and huge investments for companies. Plus, as the hardware becomes older, and obsolete, it requires purchasing new on premise data warehouse servers every few years.

What is a data warehouse?

Data warehouses allow businesses to share data within a network of different data sources. Generally, a data warehouse is intended to allow a business to analyze data, to be used for reporting, business insights, and advanced analytics. The intent of the data warehouse is to bring together previously separate data, and discover new insights based on how the connected data sources can now be used together. A properly structured and implemented data warehouse becomes a “single” repository for all data, allowing datasets to “talk to each other”. This connected data allows businesses of any size to discover new data insights that could lead to additional revenue. A data warehouse is designed for analysis, not record keeping.

What is a database?

A database is simply information organized in a certain fashion, commonly tables of columns and rows. These databases can store retail sales information, customer information, and any data you can imagine. Generally, the information in a database is intended to be used to record transactional information on a daily or regular basis. A database is not designed for record keeping, not analysis.

What is a cloud data warehouse?

A cloud data warehouse is a data warehouse in a cloud, not in a local physical room or building. Data warehouse architecture has been moving to the cloud, from on-premise data warehouses, because of several huge advantages:


Cloud data warehouses cost a lot less. Why? Generally, there are no licensing costs, nor long term contracts. Plus, because it’s a cloud, there’s no hardware to buy, nor maintain. And lastly, you pay less when your data storage needs are small — then you pay incrementally more as your data storage needs grow.


Generally, a cloud data warehouse grows with your data needs. As you have more data to store, or as you add new applications, your cloud automatically grows.


A more modern data warehouse architecture allows cloud data warehouses to process complex queries much faster. This is in part due to MPP (Massively Parallel Processing), and other modern data warehouse elements.


A cloud data warehouse can theoretically be implemented in minutes. Whereas, a traditional on-premise data warehouse could take weeks or months to build.

How much does a data center cost? Or a data warehouse cost?

The cost of a data center can be thousands or millions of dollars. The cost of a data warehouse is effectively nothing, as it’s just stored data. However the cost of storage, management, and staff escalates quickly. They’re really apples and oranges, just with similar sounding names.

Data Center Costs

Data center costs are generally large. A data center used by Nike or Facebook might cost $100 million or more. While a startup’s data center might cost $10,000 or more. Generally, we see clients allocating $1 million or more to a data center.

Data Warehouse Costs

Data warehouse costs can start small, and grow quickly. It’s not uncommon for costs to start at $0.20 per hour on a monthly contract. However, most companies don’t have small data warehouse investments. Generally, we see clients dedicating a budget of $25,000-100,000 per year to their data warehouse management.

Why would I implement an on premise data center?

There’s really only one reason we see to implement an on-prem data center: Compliance. If your business requires that you have complete control over and visibility into your data, then an on-prem data center is the only solution. For every other situation, a public cloud is a more cost effective, scalable, modern solution. 

How long does it take to create a cloud data warehouse?

You can create a Snowflake cloud data warehouse in under an hour. However, creating the data warehouse, and implementing it to be useful are different things. We generally schedule about four weeks to evaluate the typical needs of a client for a cloud data warehouse

Top Cloud Data Warehouse Solutions

While there are a huge variety of cloud data warehouse solutions, we generally only recommend three:

  • Snowflake
  • Microsoft Azure
  • Amazon Redshift

When do I need a cloud data warehouse consultant?

Larger companies have the funds to consider hiring a full-time Data Warehouse Engineer. Startups and medium-sized businesses might consider a specialist consultant to help them implement and get rolling.

At, we help all sorts of companies migrate to data warehouses — from global companies to Bay Area seed startups. The common issues we’ve discovered is teaching teams to maintain their virtual data warehouse, and setup new dimension tables. We get a lot of follow up calls and emails asking for tweaks and additions. Our recommendation is to do exactly this way. Get an expert consulting team, like NextPhase, to help you migrate and get everything functioning perfectly. After you discover the power of this new advanced data analytics system, only then should you consider whether the ROI warrants additional investment — whether that be a full-time Data Warehouse Engineer, training an existing engineer, or simply continuing to work with a third-party like NextPhase.

Do I need a data warehouse consultant near me?

Working with a data warehouse consultant near you is an advantage for communication and workflow. Generally, close proximity makes those things more efficient. If your preferred data warehouse consultant is not nearby, make sure you select a data warehouse consultant that has an established virtual workflow, and who clearly communicates expectations and process. At, we work with local and global clients efficiently, and the key is a well-established process and communication plan.

Have questions? Email anytime for a free consultation.


The 5-Minute Guide to Cloud Migration
The Guide to Snowflake Data Warehouses


About is a cloud data management and analytics services provider. For 10 years, we’ve helped global companies harness the power to turn data into insights that drive growth. Whether you’re migrating to the cloud or implementing a cloud data warehouse, contact us to schedule a workshop.

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