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Decoding databases: Navigating the choice between proprietary and third-party solutions



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April 2, 2024 | 5 min read

This article explores the choice between proprietary and third-party databases, weighing control, customization, and support against flexibility and innovation.

The question of using a proprietary vs. third-party database is not a “sugar cookie vs. chocolate chip” type of debate. Not only is it difficult to match budget, flexibility, support, and project needs to one specific type of database – the answer may change every time. There’s also a lot riding on your choice of database – we're talking operational efficiency, cost-effectiveness, and future scalability.

We’re not going to tell you what to choose (sorry!), but this article will give you something better: a complete rundown of strengths, weaknesses, and applications - all backed by industry trends and expert opinions. There’s no right answer in the ether, but there is a right application for your specific needs.

Let’s help you find it.

What is a proprietary database?

Proprietary databases, as the name suggests, belong to a specific company that develop and manage them. They’re usually fine-tuned, meticulously crafted, licensed and copyrighted. Though harder to obtain easily with restrictions on their modification and distribution – the advantages of using a prop database revolve around full support and ease of use. 

Harness, control, and customize

One of the key benefits of proprietary databases is the level of control and customization they provide. Unlike third-party solutions, proprietary databases allow businesses to design and manage their data collection processes with precision - this is mission critical for companies that deal with specialized data or have unique operational needs.

For industries dedicated to safeguarding privacy and managing sensitive data, navigating compliance is diving through a minefield. These industries (looking at you, healthcare) need customizable options for toggling, hiding, triggering, or caching specific information – something that a third-party database just can't offer.

Higher startup costs, near-zero to maintain

While many custom designs tend to cost more, that’s not necessarily true for proprietary databases. To be blunt, they do usually require a large initial investment or a recurring pricing model. But this often is more cost-effective in the long run since proprietary databases usually come with dedicated support.

If you have a low level IT team, need a lot of customization, or data management issues – you'll likely save money using a proprietary database that offers a package price + virtual support. Going further into the future, customizing the data coming into your org means optimizing their data management processes, leading to efficiency gains and cost savings over time.

Navigating the advantages of third-party databases

Third-party databases are created and maintained by external parties unrelated to the org compiling or using the data. These databases thrive on collaboration and are usually the brainchild of many contributors at once. Inherently, they require a bit more IT mastery and innovation, but the flexibility and speed of use then soars.

Step up your innovation level

Open-source databases offer a high degree of flexibility. Differing from customizability above, this flexibility hinges on software modifications and a lot of on-site work. If you have a team of IT or database pros who can lightly code their way – third-party is the way to go. Companies can experiment with different data management strategies and quickly implement changes for hyper-speed innovation.

For instance, a tech startup might want to use a new machine learning algorithm for data analysis. With an open-source database, they can easily integrate this algorithm into their data management process overnight without any restrictions or permissions issues.

Gain a paid IT sidekick instead of product investment

While it's true that open-source databases allow for greater flexibility – you're not completely alone on your journey. By nature, open-source and third-party databases are all about collaboration. Coders, users, and IT staff are constantly on forums answering questions and fixing bugs.

If that isn't helping, and considering your startup investment of near-zero, your budget is freed up for paid assistance from several providers.

Making the right choice

Proprietary databases stand out for their unbeatable control, customization, and data security, making them a top pick for industries that play by strict compliance rules. While they might hit your wallet a bit harder upfront, the ongoing perks of personalized support and smooth sailing through data management usually make up for the initial investment.

Still, whether you lean towards proprietary or third-party databases depends on factors like how big your business is, what industry you're in, and what you need from your database. If you're a startup, or need to stay nimble -, third-party databases might be your jam.

No matter which path you choose, finding the right fit is key to keeping things running smoothly, saving costs, and setting yourself up for growth down the road.

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