The Rational Economics of In-memory Databases (Is memory getting cheaper faster than Data Warehouses are getting bigger?)

I have just written a commercial blog for work refuting some silliness from Teradata here and here. Since some of this refutes an argument that targets in-memory database architecture in general it is worth restating the case here.

The Teradata argument states that since data warehouses are growing 40% per year and the cost of memory is dropping only 20% per year that the economics of in-memory databases (IMDB) is “irrational” and that the whole IMDB idea is “hype”. Let’s have a look at the Teradata argument…

First, let’s imagine a 100TB data warehouse that is built today… and let’s imagine that it is economically reasonable today. There is an explicit argument for this here and an implicit argument here… but since the Teradata argument says that the IMDB economics get worse over time it really doesn’t matter where we start. If Teradata is right then time will tell.

Now lets apply Teradata’s economics for a couple of years…

Next year, according to Teradata, the data warehouse will have grown to 140TB and the cost of memory will have dropped 20%… making IMDB more economic. The following year your data warehouse will have grown to about 200TB and the cost of memory will have dropped another 20% making the IMDB even more cost-effective. The following year the DW will be 280TB  and the cost of memory will have dropped another 20% making it even more cost-effective.

In other words, the Teradata sound bite is silly. It has emotional appeal… but it is nonsense.

But there is more. Moore’s Law does not say that price will fall 2X every 2 years… it suggests that performance (actually transistor density) will improve 2X every two years. The fact is that memory prices are falling AND memory speeds are improving… and the gap between memory speeds and disk speeds is increasing. So the gap in price/performance of an IMDB vs. a disk-based system is increasing exponentially.

These are the economics that matter… and these are the economics that are driving Teradata to put silicon in-between their disks and their processors.

Teradata’s argument is marketing, not architecture.