Data Warehouse vs Database – What’s the Difference ?
Data Warehouse vs Database – What’s the Difference ? In this article, we discuss the differences between databases and data warehouses. We look at design, functionality, performance and other factors to consider when choosing the right tool for data storage and analysis.
Although databases and data warehouses are used to store and manage data, they differ in many ways. Well, databases are typically used to store transactional data, such as orders, payments or financial transactions, while data warehouses collect analytical data, such as information about customers, sales or system performance.
Well, then let’s start with Data Warehouse vs Database – What’s the Difference ?
What is a Data Warehouse?
Firstly, a data warehouse is a large repository of data collected from various sources within an organization and from external sources. Then it is organized in a way that facilitates analysis and reporting. Designed to support business intelligence and decision making. Provides a single end-to-end view of an organization’s data.
The data stored in a data warehouse is typically structured. Meaning it has been organized and standardized to facilitate analysis. Moreover, the data is also often historical. Which means, it captures information from a period of time, such as several years or even decades.
Benefits of using Data Warehouse
Faster, business insights – Simply put, data warehouse provides data integration, enabling business users to make all business decisions using all of the company’s data.
Faster query performance – The data store is designed to optimize query performance. This means queries run much faster, than if the data were stored in a traditional database. This allows analysts and decision makers to quickly get the information they need without waiting for lengthy queries to complete.
Scalability – Designed to handle large volumes of data and easily scales to meet an organisation’s needs. Organisations continue to use the data warehouse as they grow, without having to worry about performance or capacity issues.
Improved data quality – Often data warehouse contains processes to ensure that data is accurate, complete, and consistent. This helps to improve the overall quality of the data and reduces the likelihood of errors in analysis.
Gaining and growing competitive advantage – The combination of all of the above helps organizations find more opportunities in their data faster.
Pros of Data Warehouse
- Transform information into knowledge and data into information.
- Datastores give users unified access to multiple private data sources. It also saves users time when accessing data from multiple sources.
- A significant amount of old data is stored in data centers. Users compare different eras and trends to generate potential forecasts.
- Provides reliable communication between different departments of the company.
- Data warehouses facilitate end users’ access to a variety of data.
- Allows for easier corporate decision making.
- Strengthen connections with customers and suppliers.
- Cuts back on operating expenses and response times.
- Installation is very straightforward, provided the data sources and goals are clear.
Cons of Data Warehouse
- Challenging to include new data sources once a system has been implemented.
- At this point, various business regulations are already in place for warehouse clients, so it needs adjusting.
- Long project duration.
Up next with Data Warehouse vs Database – What’s the Difference? is to introduce a Database.
What is a Database?
A database is a structured collection of data. Then stored and organized in a way that enables efficient retrieval, modification, and data management. Think of a database as a kind of electronic filing system. Where the information is stored in tables organized into rows and columns.
Each column represents a specific type of data, such as a customer’s name or address. Each row represents a specific instance of that data, such as a specific customer. What is more, databases also support creating relationships between tables, allowing you to store and retrieve related data from multiple tables.
Benefits of using a Database
Consistent, reliable data – For example, one group has valid customer email addresses and another has valid phone numbers. With the right database management system and data quality management tools, an accurate view of data is available throughout the organization.
Better decision making – Data driven decisions are only as valid as the information they use. A database management system helps provide a framework for data quality initiatives. Improved data management procedures generate better information, leading to better decision making in organizations.
Support for multiple views of data – Supports multiple data views. A view is a subset of a database that is defined and intended for a specific user on the system. Different users of a system have different views of the system. Each view contains only the data of interest to the user or group of users.
Control of data redundancy – Ideally, each data point is stored in one location in the database. In some cases, data duplication still exists to improve system performance. But this duplication is controlled by application programming and minimized by introducing the least amount of duplication possible into the database design.
Pros of Database
- Facilitated development of new applications program.
- Greater data integrity and independence from applications programs.
- Improved data access to users through use of host and query languages.
- User friendly.
- A receiver of data to be used in meeting the information requirement of the MIS users.
- Reduced data entry, storage, and retrieval costs.
Cons of Database
- It is not for all organizations. Particularly efficient for large organizations.
- Initial training required for all programmers and users.
- Extensive conversion costs in moving form a file based system to a database system.
- Substantial hardware and software start up costs.
- Database systems are complex, difficult, and time consuming to design.
This is the main part of our article Data Warehouse vs Database – What’s the Difference?
Data Warehouse vs Database - Main Differences
While both databases and data warehouses are used to store and manage data, there are several key differences between them:
Design
Starting with Databases, they are designed to optimize transaction processing. Typically, which means they are designed with normalized data structures that eliminate redundancy and maintain data consistency. In contrast, data warehouses are designed to optimize query performance and support complex data analysis. What that means, is that they are often designed with denormalized data structures that allow for faster data retrieval.
Data Volume
Here, Databases are typically designed to handle moderate to large volumes of data. But they are optimized for handling transactions and managing smaller, more frequent updates to data. Then, Data warehouses, on the other hand, are designed to handle very large volumes of data, often spanning many years of historical data.
Use cases
Typically, Databases are used to store transactional data, such as online purchases or employee records. Then optimized for quick read and write operations. Overall, they are designed to handle small to medium sized datasets. Usually used by a single application or system. Hence, Databases are used for operational purposes, such as managing day-to-day transactions, maintaining inventory, and processing customer orders.
On the other hand, data warehouses are used to store large amounts of data from multiple sources. Example is: customer data, sales data, and inventory data. They are optimized for fast querying and analysis. Designed to handle large datasets that cannot be processed by a single database. Generally, Data warehouses are used for analytical purposes, such as generating reports, analysing trends, and making strategic decisions based on data insights.
Storage limit
Storage in Databases has typically a smaller allowance limit compared to data warehouses. This is because databases are designed to store transactional data for a specific application or system, and usually have a limited amount of data to store. For example, an employee database may only need to store data for hundreds or thousands of employees. This is a relatively small amount of data compared to the huge amount of data stored in data warehouses.
A data warehouse, on the other hand, is designed to store and manage large amounts of data from multiple sources. It is designed to handle data in the terabytes or petabytes range. Which is much larger than the data stored in most databases. All in all, Data warehouses are used to store historical data for long periods of time. Moreover the amount of data stored in them grows significantly over time.
Availability
Availability with Databases provides high availability for a single application or system. They are optimized for quick read and write operations and are often replicated across multiple servers to ensure availability and minimize downtime. High availability is critical for databases. Why? Because they are used to manage transactional data, which needs to be updated and accessed in real time.
On the other hand, data warehouses may not require the same level of availability as databases. It is designed to store historical data and support analytic queries that are performed frequently and periodically, not in real time. Well, Data warehouses are designed for high availability. But are often optimized for data retrieval and analysis rather than real time data updates.
Data analysis
Data Analysis with Database is slow and painful, due to the large number of table joins needed and the small time frame of data available.
ACID compliance
Well Database records data in an ACID compliant manner to ensure the highest levels of integrity.
Opposed to data warehouse that is not always ACID compliant though some companies do offer it.
Are there Similarities?
Both OLTP and OLAP systems store and manage data in the form of tables, columns, indexes, keys, views, and data types. Both use SQL to query the data.
Thank you for reading Data Warehouse vs Database – What’s the Difference? We shall conclude the article now.
Data Warehouse vs Database – What’s the Difference ? Conclusion
In conclusion, although databases and data warehouses have many features in common, their purpose and the way they function differ significantly. Purely, the databases are used to store and manage transactional data. Whilst, data warehouses are used to store and analyse large sets of historical data for business decision making.
Therefore, before deciding on the right data storage and management solution, it is important to carefully analyse your needs and expectations of the system. Choose the solution best suited to your specific business requirements and objectives.
