Last week at the Amazon Reinvent conference, Amazon announced Redshift – their new cloud database. The premise here is that you can host your data warehouse in the Amazon cloud for $1000 per Terabyte per year. That is a cost of $1,000,000 per year for a Petabyte of data which is quite economical. They have a limited preview and you can get more details at Amazon Redshift.
So, why is this important? It is important because like Amazon has done previously, they are using their scale to lower infrastructure costs. At $1,000 per Terabyte, this is significantly lower cost-wise than Oracle or IBM solutions. However, this is not an Oracle or an IBM or even close to a Teradata, yet. Can Amazon get there? Possibly, but it will take a lot of investment. Look at what SAP is doing with HANA to try to displace the Oracle database. While SAP is getting some good traction, this is a long road and a lot can happen.
An Enterprise Data Warehouse (EDW) is not like a cell phone where people replace the device every year or two. A company that is reliant on their EDW for analytics and running their business optimally, will not shift easily. It will take time. First Amazon has to prove itself.
The good part about new offerings like Amazon Redshift and Google Big Query is these things innovate and stretch the database market. They put pressure on the traditional database vendors to also innovate and drive down costs – this is a good thing. If you look back over the last a decade, companies like Netezza, Vertica, GreenPlum, and Aster all put pressure on the traditional database companies. Today, companies like SAP, Google, and Amazon are applying pressure to Oracle and Teradata. This is a good thing. Oracle and Teradata will respond with innovation and this will be good for all enterprises.