Amazon’s Redshift: The End Of Warehousing As We Know It?

On February 15 Amazon announced that Redshift—the company’s cloud-based warehousing service—would be implemented and available globally. The product is primarily aimed at startups concerned with economical storage services, but larger companies looking to cut operational costs have begun experimenting with the service as well. As Redshift grows, its impact on warehousing may be dramatic and enduring.

What Redshift Offers and what it Means

Redshift storage is offered at a sliding scale dependent on usage. Prices range from $.85 an hour for a 2TB ongoing demand node, to $.912 for a three year, reserved instance deal and $6.80 per Node for the on-demand option. That equates to a terabyte of data coming in at less than $1,000, which represents a tremendous price reduction for companies using traditional physical data warehouses. When Redshift was first announced, equivalent data warehousing solutions cost around $19,000-$25,000 per TB. The aim of Redshift has always been to use its scale as leverage to lower its data prices for the needs of organizations large and small; beginning in November, this goal may come to fruition.

This isn’t the first time Amazon has used its cloud-based enterprise services to out-bid its competition. At the end of January, the company launched an elastic video transcoding service which reformats videos for multiple devices. Amazon’s product offered huge discounts when compared to existing products like Zencoder. Since its release, Amazon’s presence has consistently increased in the market.

Who has already made “The Shift?”

Early users of Redshift included MicroStrategy and Jaspersoft, but as Redshift grows so has its partners. Amazon recently announced several third parties—SAP, IBM, Cognizant, Tableau, Actate, Attunity, Pentaho, Talend, Birst, Roambi and Pervasive—are integrating Redshift into their existing services by offering additional services such as analytics. These partners are essential in Amazon’s plans to move into “big data”—a move made when businesses are not only amassing and storing larger amounts of data than ever, but are using it as part of their day-to-day business operations. Some analysts are already predicting Amazon will eventually move from basic storage solutions into more intensive types of services like this. Amazon has yet to reveal sales figures pertaining to Redshift—a common practice for the company: no sales figures for the Kindle reader or tablets have ever been released. However, Amazon did note that a number of companies—a number estimated to be in the hundreds—have made the change to Redshift already.

Time will tell how successful Redshift will be and just how far Amazon will saturate the industry, but one thing is clear: All eyes are on Redshift, and be it Amazon or the rest of the industry, more changes are coming.


Haser Amir is currently working for a warehouse consulting company. He enjoys writing blog articles about companies like Amazon because he finds their business model interesting.

Image source: Shanghai Daddy

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