Hosting and Deployment: On-Premise vs. Cloud-Based

Hosting and deployment in the context of ETL pipelines and data loading refer to the infrastructure and processes involved in making the ETL pipeline and its components available and operational. It entails providing the necessary environment for running the ETL pipeline.

One of the first decisions we need to make is whether to host the repository for the ETL pipeline on-premise or as cloud-based.

On-premise

On-premise refers to a situation where the company owns its hardware and servers. The hardware can be located in a data center near the company or distributed across multiple locations around the globe.

In this case, the company is responsible for the repository's entire maintenance, security, and reliability. It manages upgrades every few years and must ensure that it has enough resources to handle peak demand for its service.

This means that the company has to buy enough hardware to not only supply resources for its ongoing activities but also to carefully analyze its expected load during peak times and account for that without overspending. However, these companies also gain independence and data maturity as they don’t rely on a third-party vendor. This approach offers more control and customization over the infrastructure, better uptime, and a lower total cost of ownership.

Cloud-based

Instead of hosting on-premise hardware, companies today can also rent hardware resources and managed services from established cloud providers (such as AWS, GCP, and Azure). Companies that choose to rent resources have the benefit of scaling up and down as needed to efficiently handle peak loads without overspending.

For example, an online ordering company can choose to immediately increase its CPU and RAM by 10-fold as soon as the sale season arrives and scale down as soon as it ends. Cloud providers allow companies to be more agile and keep up with the demands of their users with a relatively small team and without high technological expertise.

Cloud-based solutions allow for much quicker deployment; we can instantly set up a VM and deploy a service instead of buying and installing the hardware and software.

On the other hand, choosing a cloud solution means that the company is not the owner of its resources and is paying according to a third-party pricing model. Companies need to be aware of how the cloud provider charges and plan their practices to optimize the costs. Enterprises that migrate to the cloud often make major deployment errors by not appropriately adapting their previous practices to their current cloud pricing model.

Most importantly, although requiring a lower upfront investment, choosing cloud-native can be more costly throughout a system’s life cycle than on-premise.

Conclusion

Small companies and startups should start as cloud-based. They should delegate the responsibility of maintaining their hardware and software to specialized cloud vendors and focus on what makes them unique and attractive to clients. On-premise solutions are useful for large companies with enough resources and expertise to maintain their hardware.

Companies that start as cloud-based and scale enough can choose to transfer some of their activities as on-premise over time and become a hybrid between on-premise and cloud-based, therefore enjoying the benefits of both solutions.