A complete guide to data warehouses

Man organizes data in a data warehouse.

Data processing has become essential for many business operations. You probably know that a data warehouse can help store and manage data, but it might be unclear what exactly it is or how it differs from other systems and tools.

In this article, we’ll explain why it’s called a warehouse, how it works, and why many companies rely on one to operate and make critical decisions. After reading it, you’ll be equipped to discuss the benefits with your team and decide if a data warehouse can help you achieve your business goals.

This post will cover:

What is a data warehouse?

A data warehouse is a digital repository that pulls large amounts of data from databases and transactional systems. Its purpose is to process, manage, and store data so that businesses can identify trends, especially relating to customer behavior. Data warehouses produce business intelligence, which can help teams across the organization make better decisions.

Like an industrial warehouse, it serves as a large central location to receive materials — in this case, data — and then to organize them systematically so that the right pieces can be found, reassembled, and used elsewhere. Data from many different channels in different formats can be completely overwhelming, if not useless, without a processing center that can handle it, preserve it, and make it accessible.

Data warehouses are great for dealing with data of all kinds, including images and video, and for taking data in large quantities from various sources. Some examples of sources include transactions via point-of-sale (POS) systems, customer relationship management (CRM) software, a customer data platform (CDP), enterprise resource planning (ERP) software, social media, and devices via Internet of Things (IoT).

For a helpful description of a data warehouse as a single source of truth, check out this video:


Types of data warehouses

The concept of data warehousing has been around for decades. Historically, the relevant hardware and digital equipment were housed and managed on-site. As time has passed, data quality and storage technology have improved, leading to better analytical capabilities. With cloud storage, smaller businesses can now find the same benefits previously available only to companies large enough to set up their own warehouse.

Let’s look closer at each of these two approaches:

The future of data warehouse technology

The outlook of data warehousing will likely be cloud-based. Influencing this trend are some additional benefits keeping data in the cloud:

The architecture of data warehouses

Data warehouses are configured in terms of tiers. They typically follow a three-tier system where data arrives from multiple sources before being processed and made available through an interface that lets users perform queries and access the data in helpful formats:

The architecture of a data warehouse

Data warehouse vs. data lake vs. data mart

Several data terms are commonly used in conversations about data warehousing, and they can often be confused. Let’s define those terms and discuss how they differ:

The differences between these terms make more sense when you see how they are related. They are components in what is often a chronological process:

  1. Data is imported into the system from a variety of inputs. That data is initially stored in a database or a data lake.
  2. The data is processed and then moved into a data warehouse. From this point, teams can analyze their data.
  3. Data can be taken a step further and moved into a data mart, which categorizes the data by department for easier and quicker analysis.

A data lake, warehouse and mart.

Data warehouse benefits

A data warehouse does more than store data. The main benefits of a data warehouse include:

Get started with data warehousing today

Data warehouses can lead to better business decision-making because they help gather large amounts of historical data in one place, organize that data, and make decisions backed by greater business intelligence. A data warehouse can become a single source of truth that makes data available and useful for multiple analytical needs.

Generally, data warehouses are for larger businesses. But cloud-based data storage opens new opportunities for small- and medium-sized businesses to store larger amounts of data. With a cloud solution, you’ll be ready to scale as you grow and adapt to evolving analytical needs. A warehouse makes it possible to find and act on information that is less easily realized in smaller sets and systems.

If you’re ready to start a conversation with your team, share this article and discuss how your business could benefit from a data warehouse. It might be a good idea to make a brief list of data warehouse solutions that would support your work.

Adobe can help

A data warehouse can provide a rich underpinning for the powerful data processing you need to understand customers and make better business decisions. A data warehouse is one of the features included in Adobe Analytics, which brings together cross-channel data to provide real-time insights.

Explore the benefits of Analytics or request a demo to learn more.