What is OLAP Cube?

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Traditional data processing systems struggle to provide quick and efficient analysis, often leaving businesses overwhelmed and unable to harness the full potential of their data. Enters OLAP (Online Analytical Processing) cubes. It is a powerful solution that overcomes these limitations, enabling organizations to gain valuable insights and make data-driven decisions. Let's get started.

What is OLAP?

OLAP (Online Analytical Processing) specializes in handling analytical queries over large datasets. OLAP cubes serve as pre-aggregated data structures that facilitate efficient analysis. Think of OLAP cubes as multidimensional representations of data, enabling businesses to explore information from various angles. Comparatively, querying raw data directly would result in sluggish performance, hindering the decision-making process.

OLAP serves as a crucial tool for analyzing information from multiple databases. It allows for grouping, aggregation, and joining of data, leading to faster analysis and data exploration. While OLAP cubes have been widely adopted, recent years have seen a decline in their usage due to the emergence of columnar databases, which offer superior performance and scalability.

The OLAP Cube 

At its core, an OLAP cube is a data structure designed for fast analysis of data based on multiple dimensions. 

OLAP cubes support various analytical operations that enhance data exploration. These include:

  • Slicing enables the selection of specific subsets of data based on one or more dimensions. 
  • Dicing allows for the selection of specific combinations of dimension values. Drill-down enables users to explore data at a more granular level by navigating hierarchies. 
  • Roll-up aggregates data to higher levels of summarization, facilitating broader analysis. 
  • Pivoting reorients the cube to view data from different dimensions, providing alternate perspectives.

Let's take an example to understand how an OLAP cube works. Imagine you are managing a chain of retail stores, and you want to analyze sales data to gain insights into your business performance. You have data about sales revenue, products, stores, and time periods (e.g., months or quarters).

To create an OLAP cube, you would start by identifying the dimensions of your data. In this case, the dimensions could be:

  • Time (e.g., months, quarters, years)
  • Product (e.g., categories, brands, individual products)
  • Store (e.g., locations, regions, individual stores)

The cube would then be structured with these dimensions forming the axes of the cube. Each intersection point within the cube represents a specific combination of dimension values. For example, one intersection point might represent the sales revenue for a particular product in a specific store during a specific month.

Now, let's say you want to analyze the sales revenue by month, product, and store. You could query the OLAP cube to obtain the total sales revenue for each combination of these dimensions.

For instance, you could perform the following analyses using the OLAP cube:

  • Slice: Extract sales revenue for a specific month across all products and stores.
  • Dice: Analyze sales revenue for a specific month and product category across all stores.
  • Drill-down: Analyze sales revenue for a specific year and product category, then drill down to view sales revenue for each month within that year.
  • Roll-up: Analyze sales revenue for a specific product category across all stores and months, then roll up to view the total revenue for all product categories.

Explanation of the Term "Cube" and Its Origin

The term "OLAP cube" originated from BI tools like Excel's Pivot Tables, which introduced the concept of analyzing data across multiple dimensions. While these tools enabled users to work with two dimensions at a time, the concept of a "cube" emerged by stacking pivot tables to introduce additional dimensions. This metaphorical cube became synonymous with the idea of multidimensional analysis

How are OLAP Cubes Structured?

OLAP cubes structure data by aggregating metrics (facts) over dimensions. Dimensions play a crucial role in organizing data, with examples including time, geolocation, and product categories. To model data within OLAP cubes, star or snowflake schemas are commonly used. These schemas provide a blueprint for structuring data hierarchically, ensuring efficient navigation and analysis.

Advantages and Disadvantages of OLAP Cubes


OLAP cubes offer numerous benefits, including 

  • Support for complex analytics queries, business intelligence, predictive scenarios, time-series forecasting, and data mining. 
  • They deliver faster query performance and ensure consistent metrics across analyses. 
  • OLAP cubes also provide consistency, enable "What if" analysis, offer search capabilities, facilitate business modeling, and enhance data visualization.


Despite their advantages, OLAP cubes come with a few challenges. 

  • Technical complexities and high overhead can pose hurdles during cube creation and maintenance.
  •  Accessibility and flexibility can be limited, especially when dealing with large and constantly evolving datasets.
  •  Additionally, schema complexity, constraints on dimensions, inability to access transactional data, and time-consuming cube updates are worth considering.

Handling Non-Additive Aggregates in OLAP Cubes

OLAP cubes face challenges when summing non-additive aggregates such as distinct counts. To address this, a common solution involves creating a table within the cube that includes NULL values for excluded dimensions. This approach ensures accurate calculations and provides a workaround for the limitations of traditional aggregation methods.

OLAP Cubes in Practice

Historically, OLAP cubes were served by specialized OLAP servers. However, with the rise of modern data warehouses, OLAP cubes have found a new home. Modern data warehouses offer scalability, parallel processing, and columnar data storage, enhancing the capabilities of OLAP analytics. In this context, OLAP cubes play a vital role in the "metrics layer" of a data warehouse, ensuring consistent and reliable metric calculations. Tools like Transform have emerged to streamline cube creation and management.

Alternatives to OLAP Cubes

While OLAP cubes have long been a cornerstone of data analysis, alternative approaches have gained prominence. Software for data mining and exploration, such as ThoughtSpot, provides flexible and intuitive interfaces for querying data. Additionally, the Modern Data Stack offers flexible data pipelines, enabling businesses to explore data in real-time, eliminating the need for pre-aggregated structures.

Comparison to Spreadsheet Modeling Structure

To understand the value of OLAP cubes, it's essential to contrast them with the familiar structure of spreadsheets. Spreadsheets provide a two-dimensional array to organize data, while OLAP cubes extend this modeling structure to multiple dimensions. The aim is to strike a balance between user needs and logical model limitations, allowing for comprehensive analysis while maintaining efficiency

The Rise of the OLAP Cube

OLAP cubes emerged as optimized data structures tailored for quick data analysis. They employ measures and dimensions to organize and summarize data effectively. By utilizing nested arrays to store information across multiple dimensions, OLAP cubes provide caching and persistence mechanisms for subsets of data, enabling swift retrieval. This revolutionized business intelligence practices and led to the creation of new cubes for various analysis scenarios.

Performance Challenges of OLAP

  • Complex queries: OLAP cubes involve analyzing data from multiple dimensions and properties, which can result in complex queries that require multiple unions and GROUP BY clauses.
  • High computational requirements: Performing aggregations and calculations on large datasets with multiple dimensions can be computationally intensive and time-consuming.
  • Long query execution time: The combination of complex queries and high computational requirements can lead to long query execution times, causing delays in retrieving results.
  • Resource-intensive operations: Building OLAP cubes often involves multiple scans, sorts, and hashes of data, which can consume significant system resources and result in performance bottlenecks.
  • Memory limitations: In the early days of OLAP, limited memory capacity was a challenge, forcing users to work with relatively small amounts of memory for business intelligence (BI) workloads.
  • Expensive hardware requirements: High-performance OLAP workloads often require powerful hardware configurations to handle the computational demands and optimize query performance.
  • Cross-tabulation complexity: Cross-tabulations, or pivot tables, in OLAP cubes involve a combination of unions and GROUP BY operators, resulting in even more complex queries and longer processing times.
  • Data scalability: As the volume of data grows, OLAP cubes may face scalability challenges, requiring optimization techniques to maintain acceptable performance levels.
  • Query response time: Users expect quick and interactive responses to their queries. The performance challenges in OLAP cubes can hinder real-time or near-real-time query responsiveness.
  • Data integration and synchronization: Keeping the OLAP cube synchronized with the underlying data source can be challenging, especially when dealing with large datasets and frequent data updates.

Problems with OLAP Cubes

Advancements in computing power and memory affordability have brought into question the necessity of additional steps involved in building and maintaining OLAP cubes. Analysts often find themselves dependent on data engineers for cube creation, posing challenges in terms of agility and autonomy. As a potential alternative, direct querying in SQL databases is gaining traction, providing real-time access to data without the need for pre-aggregated structures.

Alternative Approaches

If the need for OLAP cubes diminishes, there is an opportunity to eliminate complex data modeling efforts. Modeling data within the data warehouse as needed, and creating new tables or materialized views, provides a more flexible and adaptable approach. By embracing this alternative, businesses can prioritize real-time insights and dynamic analysis.

Types of OLAP Systems

There are various types of OLAP systems, each having its own characteristics and use cases.  Understanding the differences between these types helps organizations choose the most suitable approach for their specific needs.

These include :

1) ROLAP: ROLAP stands for Relational OLAP and involves working with data stored in relational databases. It leverages the power of SQL to perform analytical queries and provides a flexible and scalable solution. However, ROLAP may face challenges with large datasets and complex calculations, as it relies on real-time processing.

2) MOLAP:  MOLAP, or Multidimensional OLAP, uses array-based multidimensional storage engines. By storing data in a highly optimized format, MOLAP delivers fast query performance and is well-suited for complex calculations. However, MOLAP's main drawback lies in its limited scalability when dealing with large datasets.

3) Hybrid OLAP:  Hybrid OLAP, or HOLAP, combines the strengths of ROLAP and MOLAP. It allows businesses to leverage the benefits of both approaches, utilizing relational databases for real-time data and multidimensional storage for faster analysis. HOLAP provides a balance between scalability and performance, making it a popular choice for many organizations.

Other types of OLAP systems include Desktop OLAP (DOLAP), Web OLAP (WOLAP), Mobile OLAP & Spatial OLAP.


In conclusion, while OLAP cubes have experienced a decline in usage with the rise of alternative approaches, they remain a powerful tool for data analysis. The emergence of modern data warehouses, advancements in computing power, and evolving data practices have influenced the way businesses leverage OLAP cubes. By understanding the types, advantages, and disadvantages of OLAP systems, organizations can make informed decisions regarding their data analysis strategies. OLAP cubes, with their multidimensional capabilities, continue to play a vital role in unlocking data insights and enabling data-driven decision-making in the dynamic world of big data.

Written by
Pranay Janbandhu


What is OLAP Cube?