Does your business deal with a lot of data, information, or transactions every day? Does your company have data that needs to be constantly analyzed to improve client service or expand a business? Well, then, you know what data is and why it is essential to your business. All this data can't be stored on a local computer. That's where databases and data warehouses come in.
Data Warehouse and database are both systems that store data. However, both serve different needs and purposes. One can choose either of them based on their usage. If you are confused about DataWarehouse vs. Database, you need not worry anymore. We have explained the key differences between both systems.
What is Database?
A database is the most basic system to store accurate information about a particular brand, business, or product. Its primary purpose is to record everyday transactions happening in your industry. It could be contact information of your clients, the record of emails, sign-ups for an event, or a simple regular sale record. It handles a high volume of simple queries within a fraction of a minute.
What is a Data Warehouse?
Data Warehouse is a system that pulls information from various databases or sources within an enterprise or organization to process complex queries or analyze data to create reports. The reports generated through data warehouses often involve ROI factors and are used to make business decisions. Right from analyzing profits to analyzing graphs of various products sold by a brand every day.
Now that we are aware of the basic definition and roles of both database and data warehouse. Let’s delve in deeper to know how the function works and what is the primary difference between them.
DataWarehouse vs. Database
The significant difference between databases and data warehouses is how they process data. Databases use Online transactional processing, i.e., delete, replace, insert and update. It can update volume transactions quickly. As it caters to a single business or purpose at a time, it responds to requests quickly. The best example to explain the functionality would be a hotel reservation desk. When you ask for a room at the desk, the request is processed using OLTP.
Data Warehouse uses Online Analytical Processing to analyze massive volumes of data through various databases rapidly. It is often used by analysts to dive deeper and look at an enormous volume of data from multiple points of view. Suppose you wish to know the availability of rooms in a particular city through one of the online portals. The portal shall take in the required date and look through various relevant databases to give you the real-time availability of a room. All of this happens within minutes. Data warehouses are purposefully used to monitor sales of multiple products by a brand every day. It is specifically designed to process massive databases 1000x times faster than OLTP.
Databases support multiple users; however, only one user can modify a piece of data simultaneously. If the same data is overwritten by two users at the same time, then it would result in a data disaster. Data Warehouse, on the other hand, supports limited users. It is not like front-end desk applications. Using a Data Warehouse involves writing and executing complex queries by a data analyst.
What Should You Use?
The database is the perfect option for your business if you deal with a single mode or single product at a time. Some examples of database uses would be a hospital to keep a record of patients, An airline to book tickets, or an e-commerce portal creating orders for a particular product.
Data Warehouse can be used when your business needs complex analysis and reporting that empower you to make vital business decisions. Examples of data warehouse usage would be segmenting users into different age groups or interest-based groups based on their buying behavior to provide them with customized content. Another example would be to predict customer influence using data going back a decade.
Once you understand the functionality of both systems, you can make an informed decision to make the right choice for your business. However, to successfully manage a business in today's economy, you would need both Datawarehouse and a database.