Data Warehouse and Database: Are They Same?

Summary: If you are about to undertake your first data-warehousing project, you should become very clear about a few basic concepts first. First of all, do you think that a data warehouse and a database are the same? Well, if your answer is yes then let me tell you, you are not yet clear about what a data warehouse is. Here, we are going to discuss a few differences between the two, which will help you understand the concept of a data warehouse.

Even if both the systems are designed to collect information for easy access, there are many differences between a data warehouse and a database. The basic difference is that generally most databases are created for a single application. Like a data warehouse a database is also an integrated collection of logically related records that consolidates records into a common place of data records that provides data for specific applications. It is created so that the information can be easily accessed, managed and updated. Different database systems would emphasis on one single subject or one system will not deal with other areas. On the contrary, a data warehouse is the data model where extracted data from the various operational databases of an organization is stored. This is the central source of data that boasts screened, edited and integrated data, making it easier for users or professionals throughout an organization to have access to the right information at the right time.

A data warehouse plays an important role in the decision-making process of an organization. Since it boasts of information from multiple areas of the organization, a data warehouse helps professionals determine how the company is performing as a whole. A data warehouse acts as a powerful tool for analysis purpose. The information stored in data warehouses does not change as much as it changes in a database. There are basically two types of data used by these systems- operational data or relational database and decision support data. Both data types are different from each other is respect of their purpose, format and structure.

In a relational database, mostly tables are used and they may be normalized. This type of data is created to deal with transactions that are made on a daily basis. A good example of it is the record of sold items maintained by a retail shop on a daily basis. This data is updated on a frequent basis. Such a system is highly effective for operational database, but not that contributive to queries or analysis purposes or for data warehousing. Thus, decision support data is mostly used in data warehousing. While operational data deals with daily transactions, decision support data gives meaning to the data that is operational in an organization.

Databases are of course a very important source of information for organizational success but data warehouses have become more important in the Information Age. Today large as well as medium sized enterprises and corporations rely on data warehousing in order to attain their business objectives on a large scale. They are more elaborate than databases.