Amazon, already a titan in the world of online retail, took a step that seemed to defy conventional business wisdom. Diving headfirst into the complex field of cloud computing with Amazon Web Services (AWS), Amazon was venturing far from its established domain.
Led by Jeff Bezos, this bold move had the potential to reshape the future of Amazon – but at what risk?
Let’s find out!
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The era of rigid dependence on external services
In the early 2000s, the digital world was entrenched in a paradigm of reliance on external IT services. Major players like eBay and Alibaba were tethered to solutions from giants like Oracle and IBM. These essential yet limiting services offered minimal flexibility, hindering scalability and innovation. Amid this scenario, Amazon’s decision to develop its own cloud infrastructure emerged as a puzzling strategy, brimming with uncertainty and risk.
The pivotal advantage of AWS for Amazon was the creation of a system that they owned outright, one that could be perfectly tailored to their specific needs. Under Jeff Bezos’s guidance, Amazon embarked on developing AWS, a solution designed for unparalleled flexibility, scalability, and efficiency. This wasn’t just about moving away from third-party dependencies; it was about gaining the freedom to innovate on an unprecedented scale, turning a significant challenge into a remarkable opportunity.
The introduction of AWS revolutionized Amazon’s e-commerce platform. Before AWS, Amazon’s infrastructure struggled to handle peak traffic during the holiday seasons, with notable outages. Post-AWS implementation, not only did Amazon’s website uptime improve dramatically, but the company also saved an estimated 20% in IT costs. By 2010, Amazon reported a staggering 40% year-over-year growth in its retail business, a testament to the enhanced scalability and efficiency provided by AWS. This success story went beyond just internal benefits; AWS itself became a major profit center, contributing over $45 billion in revenue in 2020.
Beyond the standard: Embracing bold solutions in data tracking
Reflecting on Amazon’s audacious leap into AWS, we are reminded of the power of bold decisions. Amazon’s success was not just about introducing a new product; it was about creating a solution perfectly tailored to their needs, which in turn catalyzed extraordinary growth. This tale of innovation sets the stage for our journey in rethinking how we approach data tracking and analytics.
The world of tracking and analytics is currently dominated by third-party solutions. Platforms like Hyros and Wicked Reports offer tools and insights, but they come with inherent limitations. While these services provide convenience, they often follow a ‘one size fits all’ model, lacking the flexibility to mold perfectly to the unique contours of individual businesses.
The illusion of premium: These platforms use tools that are fundamentally available to all, yet they package and sell them as premium services. This marketing strategy mirrors how ordinary products can be rebranded as exclusive, often at a significantly higher cost.
One size fits none: Due to their broad client base, these platforms adopt a generalized approach. This ‘one size fits all’ philosophy means that the specific needs of your business might not be adequately addressed, leading to a misalignment between the tool’s capabilities and your unique requirements.
Data ownership dilemma: Another significant concern is data ownership. With third-party platforms, businesses often don’t have access to raw data. Instead, they receive aggregated reports, which might not provide the granular insights necessary for informed decision-making.
The allure and the pitfall: These solutions are undoubtedly attractive for they offer ease and convenience. However, they can inadvertently restrict a business’s growth and adaptability due to their inherent rigidity and lack of customization.
Drawing inspiration from Amazon’s example with AWS, we realize the importance of taking bold steps toward creating solutions that fit our unique business model. The significance of data in today’s digital landscape cannot be overstated. As we embark on developing our custom backend tracking system, we are not just choosing a new tool; we are choosing to prioritize flexibility, data ownership, and tailored insights – elements crucial for the real growth and evolution of our business.
Designing our custom backend reporting: A three-part strategy
As we continue our journey towards building a bespoke data tracking and reporting infrastructure, it’s essential to recognize the key components that make up an effective backend system. This process involves a three-part strategy: harnessing powerful event-tracking platforms, integrating robust databases, and utilizing advanced visualization tools. In this part of our series, we focus on the first critical element — event tracking — and how platforms like Rudderstack play a vital role in capturing the data that fuels our entire system.
1) Dive into advanced event tracking tools
Event tracking platforms such as Rudderstack,Segment,Snowplow, and others are the linchpins of our custom backend tracking system. The core purpose of event tracking platforms is to accurately capture and record user activities – clicks, page views, transactions, and more – across our websites and applications. This data is the lifeblood of our custom reporting system, offering the raw insights needed for advanced analysis.
Tools for event tracking specialize in collecting detailed data in real time. This comprehensive data collection is invaluable, as it allows us to understand user behavior at a granular level. It’s not just about gathering data but capturing the right data that aligns with our business goals.
While each platform has its unique features, some key aspects make them particularly useful for our purposes:
Versatile data capture: These tools can track a wide range of events, giving us a complete picture of user interactions.
Customization capabilities: They offer the flexibility to tailor event tracking to our specific needs, ensuring relevance and accuracy in the data collected.
Integration with broader systems: Their ability to integrate with other tools and systems is crucial for creating a unified data flow into our backend reporting system.
2) The importance of databases in backend reporting
Having established the significance of event tracking tools in the first part of our custom backend reporting strategy, we now turn to the second crucial component: databases. These are not just storage repositories for the data we collect but also powerful engines that enable sophisticated querying and data processing. Databases like BigQuery, Amazon Redshift, Snowflake, PostgreSQL, and Microsoft Azure SQL Data Warehouse each offer unique features and capabilities that align with different business needs.
Databases serve as the central hub for all the data collected through event tracking tools. Their primary function is to store large volumes of data securely and efficiently, making it accessible for analysis and reporting.
Secure storage and easy access: Databases provide a secure environment to store the vast amounts of data generated by our digital interactions. They ensure data integrity and availability, allowing for easy retrieval and analysis as needed.
Advanced querying capabilities: Beyond storage, databases offer powerful querying capabilities. Whether it’s BigQuery’s ability to handle large-scale analytics or PostgreSQL’s sophisticated administration tools, these platforms enable us to perform complex data analyses and generate insights that drive our business decisions.
Each database platform comes with its strengths and considerations. While BigQuery stands out for its easy scaling and integration with Google products, it requires a technical learning curve. Amazon Redshift is renowned for its cloud-based data warehousing but often necessitates additional tools for data integration. Snowflake differentiates itself with rapid resource allocation and robust security protocols, though it operates on a consumption-based pricing model. PostgreSQL is a powerful open-source option suitable for those with advanced database management skills, while Microsoft Azure SQL Data Warehouse combines big data analytics with enterprise data warehousing, ideal for users familiar with the Microsoft ecosystem.
3) Bringing data to life
Following our exploration of event tracking tools and the integration of robust databases, we arrive at the final, yet equally crucial, stage of our custom backend reporting system: data visualization. This is where complex datasets transform into clear, actionable insights. Utilizing tools like Tableau, Looker, and Power BI, we’re able to distill our collected and processed data into visuals that are not only accessible but also intuitively comprehensible to their end users.
Data visualization plays a pivotal role in our three-part backend tracking system. It’s the process where data ceases to be rows and columns in a database and becomes a narrative. Platforms such as Tableau, Looker, and Power BI excel in this realm, offering a diverse range of features:
Interactive dashboards: These tools enable us to create dynamic dashboards that can be interacted with, allowing users to delve deeper into the metrics that matter most.
Customizable reports: With advanced customization options, we can tailor our visualizations to fit the unique narrative of our data, ensuring that the reports align with our specific business objectives.
Seamless integration: Just as our databases house data from various sources, these visualization tools can pull this data, ensuring a cohesive and comprehensive view.
Within the realm of data visualization, each tool brings its unique strengths: Tableau is acclaimed for its sophisticated charting and exploration capabilities, making it ideal for complex data analysis. Looker excels in offering deep customization and detailed analytics, perfect for creating comprehensive reports. Meanwhile, Power BI is distinguished by its seamless integration with the Microsoft ecosystem and its array of visually appealing features.
Inspired by Amazon’s daring venture into the unknown with AWS, our exploration underlines the immense value and transformative power of custom backend tracking solutions. This journey, though undeniably filled with challenges and risks, is a testament to the pivotal role of data in the heart of every thriving business. By choosing the path of customization – from event tracking and robust databases to insightful data visualization – we’re not just taking a calculated risk; we’re seizing the opportunity to harness the full potential of our data. In a landscape where data is the lifeblood of success, embracing the risk to build a tailor-made tracking system is not just worthwhile; it’s essential for innovation, growth, and maintaining a competitive edge in today’s dynamic market.
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Maksim Miceta, Data Scientist
Hailing from the world of science, Maksim excels at making sense of data. His superpower is extracting valuable insights that allow us to optimize media spend and the effectiveness of ad campaigns.
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