What is a data warehouse?

A data warehouse is a large collection of business data used to help an organization make decisions. The concept of the data warehouse has existed since the 1980s, when it was developed to help transition data from merely powering operations to fueling decision support systems that reveal business intelligence. The large amount of data in data warehouses comes from different places such as internal applications such as marketing, sales, and finance; customer-facing apps; and external partner systems, among others.

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On a technical level, a data warehouse periodically pulls data from those apps and systems; then, the data goes through formatting and import processes to match the data already in the warehouse. The data warehouse stores this processed data so it’s ready for decision makers to access. How frequently data pulls occur, or how data is formatted, etc., will vary depending on the needs of the organization.

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Some benefits of a data warehouse

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Organizations that use a data warehouse to assist their analytics and business intelligence see a number of substantial benefits:

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Better data — Adding data sources to a data warehouse enables organizations to ensure that they are collecting consistent and relevant data from that source. They don’t need to wonder whether the data will be accessible or inconsistent as it comes in to the system. This ensures higher data quality and data integrity for sound decision making.

 

Faster decisions — Data in a warehouse is in such consistent formats that it is ready to be analyzed. It also provides the analytical power and a more complete dataset to base decisions on hard facts. Therefore, decision makers no longer need to reply on hunches, incomplete data, or poor quality data and risk delivering slow and inaccurate results.

What a data warehouse is not

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1. It is not a database

It’s easy to confuse a data warehouse with a database, since both concepts share some similarities. The primary difference, however, comes into effect when a business needs to perform analytics on a large data collection. Data warehouses are made to handle this type of task, while databases are not.

 

2. It is not a data lake

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Although they both are built for business analytics purposes, the major difference between a data lake and a data warehouse is that a data lake stores all types of raw, structured, and unstructured data from all data sources in its native format until it is needed. By contrast, a data warehouse stores data in files or folders in a more organized fashion that is readily available for reporting and data analysis.

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3. It is not a data mart

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Data warehouses are also sometimes confused with data marts. But data warehouses are generally much bigger and contain a greater variety of data, while data marts are limited in their application.

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Data marts are often subsets of a warehouse, designed to easily deliver specific data to a specific user, for a specific application. In the simplest terms, data marts can be thought of as single-subject, while data warehouses cover multiple subjects.

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The future of the data warehouse: move to the cloud

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As businesses make the move to the cloud, so too do their databases and data warehousing tools. The cloud offers many advantages: flexibility, collaboration, and accessibility from anywhere, to name a few. Popular tools like Amazon Redshift, Microsoft Azure SQL Data Warehouse, Snowflake have all offered businesses simple ways to warehouse and analyze their cloud data.

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The cloud model lowers the barriers to entry — especially cost, complexity, and lengthy time-to-value — that have traditionally limited the adoption and successful use of data warehousing technology. It permits an organization to scale up or scale down — to turn on or turn off — data warehouse capacity as needed. Plus, it’s fast and easy to get started with a cloud data warehouse. Doing so requires neither a huge up-front investment nor a time-consuming (and no less costly) deployment process.

 

The cloud data warehouse architecture largely eliminates the risks endemic to the on-premises data warehouse paradigm. You don’t have to budget for and procure hardware and software. You don’t have to set aside a budget line item for annual maintenance and support. In the cloud, the cost considerations that have traditionally preoccupied data warehouse teams — budgeting for planned and unplanned system upgrades — go away.

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Discover the power of the data warehouse

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Organizations can get more from their analytics efforts by moving beyond simple databases and into the world of data warehousing. Finding the right warehousing solution to fit business needs can make a world of difference in how effectively a company serves its customers and grows its operations.

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