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LESSON - Legally Avoid the Data Tax

By Yves de Montcheuil, Vice President of Marketing, Talend

Thankfully, no such tax is being levied by governments. (What, you don’t think you’re paying enough taxes already?) However, what’s worse than an “official” tax is that if you are using traditional, proprietary data integration tools, your providers are looming, imposing a hefty tax that can severely impact your business.

The Data Tax Is a Tax on Volume

Data volumes are growing exponentially. Efficient data governance and management requires this data to be processed, cleansed, and reconciled between systems. All this processing is heavily impacted by the volumes of data being processed. In many cases, the only option is to increase the processing power available, typically by adding resources such as servers and CPUs. This is the driving force of the first postulate of the data tax:

Any organization shall pay a data tax that is based on the number of CPUs (or equivalent) used to process their data.

The Data Tax Is a Tax on Diversity

Information systems become more and more complex as they are consolidated following mergers and acquisitions, or as new best-of-breed systems get deployed on premise, in the cloud, and so on. This diversity is important, and good business sense would require it to be taken into account for all data integration projects. If you are trying to get a holistic view of the information system for reporting or analytics, but are missing several applications, your view is not holistic. This is the driving force of the second postulate of the data tax:

Any organization shall pay a data tax that is based on the number and type of source and target systems that they wish to connect.

The Data Tax Is Unpredictable

The data tax is especially insidious because it is very difficult to estimate up front. This is the driving force of the third postulate of the data tax:

The data tax shall be impossible to estimate up front and shall only be levied once the organization is locked into its choice.

By “giving away” development seats with “low” initial license fees, vendors compel organizations to use their solutions. Only when most of the developments have been performed and are ready to be deployed in production will the client be able to evaluate their runtime needs.

Avoiding the Data Tax

The solution to avoiding the data tax is actually surprisingly simple: relocate your data integration to a data tax haven! If you are not yet using traditional data integration technology, it’s easy. Simply select the right solution.

However, if you are already using traditional data integration technology, the move to a data tax haven is more complicated—but by no means impossible. Here is a step-by-step guide:

  1. Select new data integration technology—one that does not charge the data tax.
  2. Deploy the new tax-free technology alongside your existing processes, focusing on the most heavily taxed processes. For example, you may consider using it for:
    • Pre-process data that requires complex transformations to reduce CPU strain
    • Connecting to new data sources, for which you would need to buy additional connectors under the data tax, and get the data into staging areas for which the data tax has already been paid
  3. Over time, when your existing processes require maintenance, consider migrating these processes to the tax-free technology.

Benefits and savings will be immediate, and the more processes you deploy using the tax-free technology, the faster you will decrease your data tax bill. And, of course, it’s perfectly legal.

This article originally appeared in the issue of .

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