To Build or Buy Data Pipelines: A Comprehensive Guide

Building or buying data pipelines? Boost your business with the correct decision.

May 11, 2023
6 mins read
Last Updated August 11, 2023

To Build or Buy Data Pipelines: A Comprehensive Guide

When it comes to managing data pipelines, organizations often face the dilemma of building vs. buying data pipelines. Both strategies have benefits and drawbacks, so picking the best one takes considerable thought. While constructing a tailor-made solution for your pipeline may provide you with greater control over its architecture and versatility, it may also incur substantial expenses, consume a significant amount of time and demand regular maintenance.

On the other hand, buying a pre-built tool can offer a quicker time to value and reduce maintenance efforts, but it may not fully align with the organization’s unique needs.

In this blog, we will explore the factors that organizations should consider when deciding between building or buying data pipelines and provide insights to clear the dilemma.

Our data engineering services concentrate on developing dependable and effective data pipelines that help organizations collect, process, and analyze massive amounts of data quickly.  With our knowledge of the recent data technologies and frameworks, we can build specialized data pipelines that cater to your specific requirements and provide valuable insights. Trust our proficiency to guide you towards the most suitable decision.

Factors affecting the decision of build vs. buy data pipelines

1. Scalability

The capacity to scale is a pivotal consideration when deciding between buying or building a data pipeline. Building a custom data pipeline allows for greater scalability and flexibility compared to buying a pre-built solution.

Thus, making it more efficient and effective for your particular use case. By building a data pipeline, you will have complete control over the infrastructure and can scale it as your business grows.

Conversely, pre-existing solutions may be inadequate in processing huge amounts of data or complicated data conversions. This may culminate in slower processing speeds.

Consider a big e-commerce establishment that conducts millions of transactions daily. Such an enterprise requires a sturdy and adaptable data pipeline that can manage an immense data influx. Crafting a bespoke pipeline affords the company the opportunity to customize the pipeline to their precise specifications, thereby ensuring it can handle the volume of data and intricate processing requirements.

In addition, building your own data pipeline provides the opportunity for continuous improvement and optimization. As your business needs evolve, you can modify the pipeline accordingly to meet those needs.

Verdict:- Building data pipelines is better from a scalability perspective.

2. Reliability

Reliability is a critical factor in data pipelines because any failure can result in significant business losses. Developing your data pipeline in-house provides you with unrestricted oversight over the system. This empowers you to construct a dependable pipeline that can be personalized to accommodate your distinct business requirements.

On the contrary, buying a data pipeline from a vendor means relying on their system’s reliability, which may not be suitable for your business needs. Moreover, you may lack absolute authority or insight over the system. Thus, making it challenging to discern and rectify any complications that may arise.

Building a data pipeline in-house also allows you to incorporate failover mechanisms, such as automated backups and disaster recovery plans, which can help mitigate any potential issues. This approach also allows for better alignment with your organization’s security and compliance policies.

As an illustration, a business that gathers data from diverse origins, including social media, website clicks, and email promotions, necessitates handling this data promptly and storing it in a centralized database for additional scrutiny.

If they opt to buy a data pipeline solution, they may face reliability issues such as downtime or slow processing times, which could negatively impact their business operations. Moreover, if the vendor’s pipeline is unable to handle the company’s specific data processing requirements, it may result in data loss or inaccurate insights.

In contrast, if the company decides to build their own data pipeline, they can customize it to meet their specific needs and ensure reliability. For example, they can set up monitoring tools to detect any issues and proactively resolve them or build redundancies into the system to prevent data loss. By building their own pipeline, the company can have good control over the reliability of their data processing and avoid any potential issues that may arise from using a third-party solution.

Verdict:- Building data pipelines is better from a reliability perspective.

Want to know how Billion dollar companies make use of data pipelines?

3. Security and data privacy

One of the most crucial factors to consider in the buying vs. building data pipelines decision is security and privacy. This aspect is of particular importance for companies that handle confidential data or operate in industries that are closely monitored, such as healthcare or finance.

Building data pipelines in-house offers organizations complete control over their data and ensures that it remains secure and private. This can be achieved by implementing strict security protocols, access controls, and data encryption techniques. Additionally, building data pipelines from scratch allows companies to customize their data infrastructure to meet their unique needs and requirements.

However, buying data pipelines from third-party vendors may come with security and privacy risks. Companies must rely on the vendor’s security measures, which may not align with their own standards. Additionally, using a pre-built solution may not provide the level of customization that a company needs to handle its specific data needs.

Data breaches caused by third-party vulnerabilities can pose a severe threat to the confidentiality and integrity of data. In 2020, PwC, a professional services firm, faced a data breach that exposed the personal information of its employees and clients. The breach occurred due to a vulnerability in third-party data pipeline tool that PwC used to transfer data between its systems and cloud services.

Another major instance of a data breach was that of the Capital One breach in 2019, where a hacker gained access to personal information of over 100 million customers through a misconfigured firewall in a third-party cloud service provider.

The aforementioned incidents serve as a reminder of the significance of implementing strong security measures while collaborating with third-party vendors to prevent data breaches.

While building data pipelines may require more resources and expertise upfront, the long-term benefits may outweigh the initial investment. When building a data pipeline in-house, companies have the advantage of being able to align their data infrastructure with their security and privacy standards. This allows them to implement robust security measures and control access to sensitive information. Furthermore, building in-house provides the flexibility to make changes and updates to the system to ensure it continues to meet the company’s evolving needs and standards.

Verdict:- Building data pipelines is better from a security perspective

4. Flexibility

Flexibility is a crucial factor in determining whether to build or buy data pipelines. Building data pipelines in-house provides organizations with the flexibility to customize their data infrastructure according to their specific needs and requirements. This is especially relevant for companies that have unique data processing workflows or those that require specialized data handling techniques.

When organizations build data pipelines, they can make modifications and updates as required to accommodate new data sources or to improve existing data processing workflows. This degree of flexibility can prove to be a daunting feat when employing pre-built solutions from third-party service providers, for they may lack the essential customization alternatives.

Additionally, building data pipelines in-house enables greater control over the pipeline’s development roadmap. Organizations can prioritize features and functionality that are most important to their business needs and avoid being constrained by the limitations of pre-built solutions.

Companies that allocate resources towards bespoke data and analytics solutions are twice as probable to report elevated revenue growth compared to their industry counterparts, as per a recent survey by McKinsey.

To illustrate, the specialized data pipeline utilized by Netflix facilitates rapid processing and analysis of colossal quantities of data in real-time, thereby enabling customized content recommendations for each individual user. Similarly, Airbnb’s tailor-made pipeline empowers the company to perform complex data workflows and make instantaneous data-driven decisions to enhance the customer experience.

Verdict:- Building data pipelines is better from a flexibility perspective.

5. Visibility

The capacity to observe and trace the flow of data is known as visibility. It is a pivotal component of data pipelines, as it grants businesses the capability to perceive and pinpoint potential impediments, and make informed decisions based on discernment. Crafting your data pipeline within your organization equips you with unmitigated visibility over the entire system, enabling you to monitor and track the data flow in real-time and promptly detect any shortcomings or inefficiencies.

In contrast, buying a data pipeline from a vendor may limit your visibility, making it hard to identify and fix issues. This can result in data flow disruptions, ultimately impacting the business’s decision-making process.

Building your own data pipeline allows for greater customization, which can provide more detailed visibility and collaboration between teams. For example, by involving data scientists and analysts in the pipeline building process, you can ensure that the pipeline meets their specific requirements and provides the necessary visibility into the data flow.

Let’s consider a retail business that uses a third-party data pipeline to collect and analyze customer data. However, the pipeline lacks the necessary visibility tools, making it challenging for the business to monitor the data flow and identify bottlenecks. This leads to lost opportunities and decreased revenue.

If the business had built their own data pipeline in-house, they could have included monitoring tools and real-time alerts, which would have provided complete visibility into the data flow. This would have allowed them to quickly identify any bottlenecks and make informed decisions based on the insights gained, resulting in increased revenue and improved business performance.

Therefore, building your own pipeline can ensure that you have complete visibility into the data flow, identify and resolve any issues quickly, and make informed decisions based on the insights gained from the data analysis.

Verdict:- Building data pipelines is better from a visibility perspective.

6. Cost

When it comes to building or buying data pipelines, one of the factors that businesses often consider is cost. While buying a pre-built data pipeline might seem cost-effective at first, building a custom pipeline tailored to organizations’ specific needs can save money in the long run.

Even though buying a data pipeline may seem expensive at first, it is important to consider the long-term benefits. By building a custom pipeline, businesses can avoid ongoing licensing fees and expensive support contracts.

In contrast, buying a pre-built data pipeline may seem like a more pocket-friendly option, but it can become expensive quickly if the organization’s needs outgrow the capabilities of the purchased solution. This may force businesses to buy more licenses or pay for costly software upgrades.

For instance, the business may initially require a pipeline that can handle customer data from a single source, such as its website. But, as the business grows, it may need to collect data from multiple sources, such as social media platforms and mobile apps, and the pre-built solution may not manage the increased workload. For instance, if you want to conduct social media analytics from the data generated on your social media handles and channels, then buying a data pipeline might not be the best option.

Building a custom pipeline from the start allows you to handle multiple data sources easily and make it scalable.

If your organization handles sensitive data, it’s important to consider the potential cost of a data leak. Although buying a pre-built data pipeline may seem like a quick and easy solution, it comes with certain risks. In the case where the security measures of a third-party conduit are inadequate, there is a potential for a breach of confidential information. Such an eventuality may result in substantial financial losses and harm the reputation of the organization.

Building a custom data pipeline can be expensive upfront, but it offers better control and security over sensitive data.

In the grand scheme of things, developing a customized pipeline could prove to be more economical than the financial impact of a data breach originating from a third-party pipeline.

Verdict:- Depends on your use case.

7. Time

If businesses need to process a lot of data quickly, buying a pre-built data pipeline solution may be a better option. These pipelines are ready to use, so companies don’t need to spend time and resources building their own. In certain instances, a small business establishment may lack the requisite means to construct an in-house data pipeline. In such cases, procuring a pre-built data pipeline solution is the fastest means to establish and initiate the system’s functionality.

Buying a data pipeline solution can also save time on maintenance and updates because vendors are responsible for them. Plus, vendors often provide technical support, which can save businesses time troubleshooting issues. Nevertheless, it is crucial to meticulously assess the proposals provided by potential suppliers to ascertain that their data pipeline solution aligns with your individual business necessities and prerequisites.

However, building a custom data pipeline can also be a viable option for businesses that require a more tailored solution or need to integrate the pipeline with existing systems. While building a custom pipeline may take longer to develop, it can provide more control over the pipeline’s design and functionality. Ultimately, the decision to build or buy a data pipeline should be based on a careful evaluation of a company’s specific needs, resources, and timeline.

Verdict:- Buying data pipelines is often better if you want to set up your data pipelines quickly.

8. Customization

When it comes to data pipelines, businesses need to consider customization before deciding whether to build or buy a solution. While pre-built data pipelines may work for many organizations, they may not meet the unique needs of others.

Customization is particularly crucial for companies that deal with unique data sources or have complex data transformation requirements. In such scenarios, a pre-existing resolution may require alterations, which could prove to be expensive and time-consuming. On the other hand, building a custom data pipeline enables businesses to create a solution that is tailored to their specific needs, ensuring scalability for future growth.

Another aspect of customization to consider is the ability to add new features and functionalities to the data pipeline as needed. A pre-built solution may have limited features but with a custom data pipeline, businesses can continuously evolve and add new features and functionalities to meet their changing needs.

Customizing data pipeline offers businesses significant advantage of building over buying. It enables them to create a unique solution that can adapt and grow as their needs change over time.

Verdict:- Building data pipelines is better as it offers more customization options.

Choose Simform to build data pipelines

After evaluating the various factors that affect the decision of whether to build or buy a data pipeline, if you decide that building a custom solution is the best option for your specific needs, then Simform should be your partner of choice.

At Simform, we have a team of experienced and skilled professionals who specialize in building data pipelines from scratch. We collaborate closely with our clients to comprehend their specific data demands and provide solutions that are tailored to their requirements. The members of our team are proficient in a wide range of data engineering technologies and techniques.

Our staff stays current on the most recent developments and trends in data engineering, and we’re always learning more to better serve our clients. To guarantee that the data pipelines continue to be effective and dependable over time, we not only construct them but also offer continuous support and maintenance services.

At Simform, we are committed to helping our clients manage their data more efficiently. Contact us, to learn more about our custom data pipeline development and support services.

Hiren is CTO at Simform with an extensive experience in helping enterprises and startups streamline their business performance through data-driven innovation.

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