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SA data warehouses move to cloud for cost savings, analytics, scale

Johannesburg, 03 Jul 2023

South African data warehouses are being moved to the cloud en masse, largely owing to the cost and complexity of managing them on-premises. 

So says Rudi Nieuwenhuizen, Senior Manager: Services, Data Practice at Altron Systems Integration – a partner of Digicloud Africa, Google's chosen reseller enablement partner in Africa.

Nieuwenhuizen, who has worked in the sector for over 30 years, says he sees a major shift to the cloud as customers look to cut data warehousing costs and boost revenues with advanced analytics.

When decision-makers can access the right information at the right time, organisations transform. However, when legacy data infrastructures can’t scale, organisations stay stuck.

Nieuwenhuizen says: “A lot of the conversations we have with customers now are around cutting costs. Those with existing data centres on-premises are looking to the cloud for cost efficiencies, flexibility and scalability. They don’t have an appetite for the upfront investment and resources needed for on-premises data centres anymore. It’s not just the hardware and maintenance involved – data centres also require a lot of space and electricity, and load-shedding is making them a lot more expensive to run.”

Nieuwenhuizen says customers are under no illusions about the costs of moving to the cloud, however: “When the cloud frenzy first started, everyone thought it would be significantly cheaper. But the South African market has matured, they understand the need for cost optimisation and careful management.”

He adds: “Running a traditional data centre used to be quite painful, with all the maintenance, upgrades and patching required. In on-premises data centres, customers are reluctant to allow updates and upgrades for fear of business disruption. In the cloud, everything is so much simpler. Updates happen regularly, with no disruptions, so the environment is more secure and compliant.”

These benefits are among the many reasons most local organisations are moving their data centres to the cloud. “Some companies are sweating assets in anticipation of moving to the cloud. The others are either already in the cloud and optimising it, actively moving to the cloud or in serious talks about moving in future. Big corporates are making the call – saying everything must go to the cloud. Nobody is talking about going back,” he says.

Optimising the value of data with Google Cloud

A key advantage of moving databases to the cloud is access to the latest technologies, he notes. “We have a lot of extract, transform and load (ETL) partnerships, and from a tech drive perspective, we also see ETL providers are moving to cloud. It helps them manage versions and integrate more easily.”

Nieuwenhuizen says the Google cloud environment is delivering significant value to customers, particularly where they have particular analytics needs.

“On-premises, you don’t have the capabilities Google can offer, such as BigQuery with ML/AI, and the Google Maps API. There are a lot of powerful tools available to enrich enterprise data and deliver real value to the organisation,” he says.

Nieuwenhuizen cites examples of enterprise customers that have improved efficiencies, increased the value of their data and boosted revenues by moving their data centres and harnessing Google Cloud tools.

“One used BigQuery and maps data to improve the quality of customer address data for better data governance and naming conventions. They also gained a better understanding of where customers are and how they should approach their marketing,” he says.

“Another customer, a major non-profit organisation operational across 10 countries in Africa, uses the Google Cloud to standardise and cleanse data for more reliable, accessible and faster reporting. This solution improved processing and reporting, which ultimately can improve funding and benefits for the communities they support.”

Nieuwenhuizen also highlights a major retail chain that was struggling to understand irregular sales patterns in some regions. “Using Google Cloud tools such as Dataflow and BigQuery, we created predictive models to identify patterns and flag alerts around stock management and sales patterns. This not only improved their stock management and helped them identify regional trends, it also improved their human resource deployment and gave them visibility into their sales.”

Gregory MacLennan, Digicloud CEO, says: "Data is only as valuable as the predictions and insights it can drive. When decision-makers can access the right information at the right time, organisations transform. Many organisations have partnered with Google Cloud to remove the limitations of an on-premises data warehouse."