What Are the Different Functions of Data Warehouses and Databases?

For those that don’t actively work in data, the sheer number of terms that we have to throw around can be fairly overwhelming. What doesn’t help matters is the close similarity of many of the terms that we use on a daily basis. A great example of this is data warehouse and database, which many people routinely confuse or assume as just the same thing.

It’s safe to say that although they may both come into contact with data, they are far from being exactly the same. In order to set the record straight, let’s go through the main characteristics and distinctions between data warehouses and databases.

We’ll touch on what each of these things is, why someone would typically use them, and the core differences that you can expect to find. Let’s jump right into it.

What is a Database?

A database is a single collection of information. It is built to record data and will be populated with information that surrounds a specific idea or task. The core pillars of a database are all about storage, recording, and accessing data. Instead of having a lot of little bits of information scattered all over the place, a database acts as a central storage site.

Most commonly, databases are hosted online and use OLTP (Online Transactional Processing). Over time, they can build up to hold lots of relational data, helping to bring additional context when a data team begins to analyze the data.

What are the Benefits of a Database?

While databases only have a few core functions, they do them extremely well. Acting as a foundational block for future data processes, databases come with a range of benefits.

Here’s a selection of the main benefits of databases:

• Save Time – If a business were to manage each piece of information separately, the time it would take to achieve anything would skyrocket. A database brings data together, helping to speed up the process and ensure that businesses spend less time managing their data.

• Provide Visualization – By having well-structured databases, which will likely include structured data, your teams are able to go to a database to understand more about the information that it holds. Being held in this very structured way makes information easy to understand, which will help all of the teams in your business.

• Improve Consistency – When data is entered into a database, it is done so in rows and columns that are pre-defined. This structure ensures that data is always presented in a clear and consistent way.

From tiny excel spreadsheets to multi-year data capture databases, these are used absolutely everywhere. Especially for smaller businesses that don’t need high-tech analysis, a database will suffice for checking and interacting with the data they collect.

What is a Data Warehouse?

A data warehouse, on the other hand, is a form of the data management system. It is created to analyze data and support a range of business intelligence activities and platforms. While a database will be used to record data, a data warehouse will be put to work performing analysis and querying that data.

Data warehouses, reflecting their namesake of “warehouse,” often hold great quantities of data from a variety of different sources. Most of the time, a business will turn to a data warehouse to act as its central data repository, using this as a way of defeating data silos and acting as a single source of truth.

As data is now vital for businesses to run smoothly, you’d be hard-pressed to find a company that doesn’t use this data architecture to some extent. With the rising popularity and demand to capture more data than ever, people now turn to cloud data warehouses in order to access a more scalable data warehouse solution.

If we look at a comparison between leading cloud data warehouses, like Clickhouse vs Druid, we can understand why so many businesses use these services. With the sheer quantity of additional features and analytics opportunities, they are highly valuable to businesses. They also demonstrate just how different a data warehouse is from a database, with the latter lacking the vast majority of features that the former has.

What are the Benefits of a Data Warehouse?

Data warehouses are one of the leading tools that you can expect to find in a company’s tech stack. This is mainly due to the different range of benefits that they offer and the functionality in analysis and business insight that they offer.

Here’s a selection of the leading benefits of data warehouses:

• Functionality – By creating a space where many different sets of data can be incorporated into a single site, businesses can use data warehouses for in-depth analysis. Whether they’re exploring the relationship between two concepts or are delving into the data to generate new insights, data warehouses can do it all. Their ability to analyze collected data forms the foundation for nearly all business intelligence strategies and functions.

• Singularity – Especially as a business grows in size, it’s easy for data silos to form across different departments. Data warehouses allow companies to overcome this problem, acting as a single site for all departments to enter their data into. This singularity allows for clear visualization and complete transparency, fostering good data practices.

• Simplified Data Preparation – Many of the best data warehouse tools are not only a repository of data. Many often also offer a pre-entry area where data can be prepared before entering the warehouse itself. Not all data is going to be structured or clean when it arrives in a company. With this extra space, data warehouses are able to provide a clean flow of usable data.

With the power of data warehouses for organizations, they’ve become integral to the data architecture of the modern business. As time goes on, they’re only becoming more intelligent, with the range of functions that they offer equally expanding.

Final Thoughts

Both databases and data warehouses are incredibly useful technologies that the vast majority of businesses will end up using at some point. While databases are the foundation for data processing, they pale in comparison to the functionality of data warehouses. The stability, insight, and in-depth analysis that data warehouses allow are the foundations of modern business intelligence practices. While both data warehouse and database are commonly used interchangeably, they are, in fact, fairly different. At the lowest level, they bear similarities. Yet, the reach, utility, functionality, and breadth of what can be achieved with a data warehouse eclipses that of databases.