Data warehouse vs. database — key differences explained
As we become increasingly reliant on digital technologies for everything in business and daily life, humans are creating unfathomable quantities of data. By 2025, data volume is projected to exceed an extraordinary 180 zettabytes. All this information comes in from a variety of different inputs, with the average company managing as many as 400 sources. But where and how that data is stored is often overlooked by consumers.
Enter databases and data warehouses. While the two terms sound similar, they are not interchangeable. In fact, many companies need both to conduct business successfully and take advantage of all the information they’ve amassed. To this end, it’s important to understand the differences between these two terms and how to adopt them to support data management and analysis.
This article outlines the key differences between data warehouses and databases and how they are often used with respect to business analytics. We’ll explore the following topics:
- Quick overview — the difference between a data warehouse and a database
- What a data warehouse is
- What a database is
- Data warehouse vs. database
Quick overview — the difference between a data warehouse and a database
To put it broadly, databases store information needed to run specific applications while data warehouses primarily store historical data from across systems to be analyzed.
But the key differences stretch far beyond this to include the following:
- Databases are repositories for data storage. Data warehouses are used for active analysis of the information they hold.
- Databases use online transactional processing (OLTP). Data warehouses use online analytical processing (OLAP).
- Databases store large amounts of information that must remain accessible at all times while data warehouses hold smaller data quantities accessed on an as-needed basis.
- Databases contain content that is accessed by large quantities of people with broader needs while data warehouses are accessed by fewer individuals with specific reasons.
- Databases are designed for fast queries and operations while data warehouses perform more complex processes that can take longer since they span larger swaths of information.
With a clearer understanding of how these two terms differ from one another, let’s take a more in-depth look at each.
What is a data warehouse?
A data warehouse is a digital depository where large quantities of historical data are held from across different systems for analysts to conduct robust processing and reporting. The advantage of using a data warehouse is that users can review content from across data sources to develop new insights, detect patterns, and make decisions that can guide the business forward.
Data warehouses are usually updated on a regularly scheduled basis, meaning that information may not reflect real-time results depending on when the last upload or update was conducted. Data warehouses can also allow analysts to work with disparate information that may not have the same formatting or conditions applied to them from their original sources.
Companies have more flexibility than ever before with where and how they establish their data warehouses. Options include both on-premise and cloud-based solutions, with the right choice depending on an organization’s needs regarding security, scalability, cost, and access.
A use case for leveraging a data warehouse can include running reports on customer data to better understand behaviors and develop new personalized marketing initiatives based on those needs.
What is a database?
A database is a collection of information that is electronically stored for quick use in a specific application. Databases systematically collect data points that are organized for more immediate reference or manipulation by a wide range of users.
The information contained in a single database usually reflects a specific use or business task needed to be performed. For example, a database can contain information specific to customer profiles to aid customer service representatives when taking inbound calls. Content relevant to internal human resources processes, on the other hand, would likely be contained in an entirely different database, accessed by a completely different application and team.
It’s important to note that databases come in many shapes and sizes depending on the technical needs of the applications they serve. While they may use different schemas or query language to structure their content, the end-user experience is typically the same — fast, on-demand access to specific information.
A use case for using a database can include an application for collecting customer data from marketing forms on a website. These fields are mapped to fields in the database that hold the information for team members to use and reference during their daily work.
Data warehouse vs. database
Seeing the differences between a database and a data warehouse can help business leaders understand the use of each for their own systems. Many companies already use databases to power the bulk of their computing and data management, even if those databases come integrated and ready to go with the applications purchased for use, such as cloud-based customer relationship management (CRM) systems.
However, there are a number of benefits for companies looking to better understand their business by analyzing data across platforms. This is where data warehouses shine. Consider how difficult it can be to run a search for information when the data is housed in different application databases. It can take quite a while to run the same search repeatedly, often across data that is organized differently, and then compile that disparate data into a single output that can then be processed and reviewed.
Data warehouses simplify this experience for business analysts, helping them draw from large amounts of data with complex queries without much of the sweat equity that can come with it.
To better understand the differences between a data warehouse versus a database, review the information compiled in the comparison chart below.
As shown in the above comparison, databases and data warehouses have their own unique advantages and applications. They can also have some downsides that business analysts need to be aware of.
- Both can be associated with high costs for implementation, including both the hardware and the software needed to drive them. To help keep these costs controlled, map out in advance the primary uses for both and only store the information that will be pivotal to your business in each.
- Both can require long deployment periods that can delay business decision-making and end-user access. This can also impact internal operations, making it helpful in some instances to roll out solutions in stages.
- Both can demand in-depth training in order for users to be informed on proper data input, handling, and reporting procedures that will ensure accurate results as well as reduced storage costs.
- Both can carry their own security concerns, causing companies to consider whether on-premise or cloud solutions are best for their needs. Consider a zero-trust policy where only those authenticated users who need access have that access.
Get started with analytics
Companies need meaningful and dynamic ways to store, access, and process the information they collect about everything from product performance to customer preferences. This means that both databases and data warehouses can be beneficial to supporting and optimizing business operations when used properly.
Databases can help reduce the time spent managing and sorting through detailed information that can otherwise be organized and stored for easy access via dedicated applications. This also helps keep content consistent across users working on the same platforms and makes it faster for everyone to work with content, whether in marketing, human resources, or customer service.
Data warehouses take this information a step further, allowing business analysts to pool together information from various systems and study it from a variety of angles. This can lead to more actionable insights and help direct better decision-making for leaders looking for a more holistic approach to understanding their business, industry, or customers.
When you’re ready to explore your data management processes, start by reviewing the analytics tools you already have in place. Do these give you the key insights you feel you need to make informed business decisions? What gaps exist that implementing a data warehouse or taking better advantage of your existing databases could address?
Adobe can help
Adobe Analytics can bring together different data sources to help business leaders experience a complete picture of their ecosystem. Reports can be personalized with real-time review that is actionable and relevant to your business concerns. Explore data from any stage in the customer journey and leverage predictive insights based on the Adobe Sensei AI engine.