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Difference between Database and Data Warehouse

Updated Jan 15, 2020

In the current scenario ridden with Big Data, data banks, and data creation systems, companies across the world are looking for the most lucrative ways for managing their data. In interviews too, participants are being asked questions related to the definition of a database, what is a data warehouse, the difference between data warehouse and database, etc.

Users of operational systems, accounting, CRM, HR, etc. are forever grappling with systems that use and generate large quantities of data. This article aims to explore the difference between database and data warehouse in obvious ways.

Data Warehouse vs Database

Head to Head Comparison Chart

Basis of difference Database Data Warehouse
Utility A database is useful for Online Transactional Processing (OLTP) and can also be utilized for the creation of data warehouses. It records user data for historical use and analysis. A data warehouse is used for Online Analytical Processing (OLAP). It allows users to read the accessed historical data with a view of making business decisions and strategies.
The complexity of tables/ joins In a database, the tables and joins serve to be complicated as they have to be normalised (for RDMS). The normalization of databases is carried out for reducing redundant data and saving on storage space. In a data warehouse, the tables and joins are not as complicated as in a database. More than one normalized database may be used for the creation of a data warehouse.
Modelling technique Entity – Relational modeling technique is put in use for designing RDMS databases. Data – modeling techniques are utilized for designing a data warehouse.
Optimization A database is optimized for enabling write operations. The optimization process is necessary for maximizing the speed and effectiveness with which the stored data can be updated (modified, added, or deleted). Optimized data enables quicker analysis and data accessibility. The write operations are recorded in the database system. A data warehouse is optimized for reading only operations.
Performance Performance is relatively low for queries related to analysis. High-performance levels are in force for analytical queries.
Processing type Databases use Online Transactional Processing (OLTP) modes to delete, replace, insert and update any number of short transactions. Data warehouses utilize Online Analytical Processing (OLAP) modes that have been optimised for handling low numbers of complicated queries on large accumulated historical data sets.
Ease of performing analytical queries As there are many joins and tables in a database, it is challenging to perform analytical queries without the help of experienced database administrators or developers. Users have to be familiar with database applications to write questions for meaningful analysis and results. Data warehouses use OLAP, which serves as a function of business intelligence. This easy-to-use analysis process helps managers and analysts select, access, extract, view as well as analyse corporate data for identifying and obtaining insights on market trends and identifying potential issues.
Query response time The query response time from databases has to be extremely fast for enabling efficient transaction processing. The query response time is faster and used for measuring the effectiveness of the OLAP system.
Data timeline Databases are used for processing day-to-day transactions in organizations. Generally, they do not contain historical data and provide current data via normalized relational databases. Data warehouses are essential for analytical purposes, business reporting and making decisions. They generally store historical data after integrating the copies of transaction data acquired from disparate sources. They may use real-time data feeds to access current, integrated information for specific reports.
Concurrent users OLTP databases are designed to support thousands of simultaneous users without affecting the system’s overall performance. Data warehouses are designed to support a restricted number of concurrent users only. As a data warehouse is away from front-end applications, it is dependent on complex queries. Therefore, only limited people may access the system simultaneously.
Examples Credit card processing applications. Customer relationship management (CRM), social media data, enterprise resource management (ERP), etc.
Drawbacks Reporting, visualisation, and analytical operations are difficult to perform over significant integrated data sources and data streams. A data warehouse is more expensive than a database. It also provides less control for security and access configurations.

Read more here Difference between OLTP and OLAP

What is a Data Warehouse?

A data warehouse refers to a system that is designed to pull data into an organization for analysis and reporting; the data so collected is drawn from many sources. After that, complex queries are used for creating reports within the data warehouse. The management uses the reports for making business strategies and decisions. Overall, a data warehouse can be termed as a consolidated view of logical or physical data repositories collected from different systems.

  • The main job of a data warehouse is to correlate data belonging to different systems in one place for querying, report generation, or taking business decisions.
  • Data warehouses are utilized for online analytical processing (OLAP). This kind of processing uses complex queries for the sake of analysing rather than processing transactions.

What is a Database?

A database comprises data organized in the form of columns, rows, tables, views, etc. These database objects are indexed periodically for the cause of accessing relevant information and making them more meaningful to their users. These days, it is common to find enterprises and organizations creating and managing their databases with the help of well-designed database management systems like Oracle and SQL.

  • Databases can be created and designed to store customer information and product inventory with the help of customized database management system software.
  • Companies use their databases for performing the tasks of online transaction processing (OLTP) more effectively.
  • The database has to be supported by database software to offer convenient and quick access to information so that queries can be dealt with quickly and effectively.
  • Databases are termed as operational systems as they are used for processing daily transactions in organisations.
  • Data administrators can be trained to write, read and generate reports from the data present in the database.
  • Transactional databases are useful for providing consistency, isolation, atomicity as well as durability (ACID) compliances for ensuring that all transactions taking place are complete and consistent.

Key difference between Data Warehouse and Database

  1. A database is mainly used and designed for recording data. On the other hand, a data warehouse comes in handy for analysing data. While databases are generally optimized for read-write operations of single point transactions, the data warehouse is used for big analytical queries.
  2. The database is a collection of data that is application-oriented. On the other hand, the data warehouse lays focus on a category of data. While databases are generally limited to single applications and target only one process at a time, data warehouses provide storage for data of any given number of applications. They may contain/ target infinite applications/ processes as needed.
  3. Another difference between database and data warehouse pertains to the former being a real-time data provider. At the same time, the latter serves as a source of data and records that can be accessed easily for analysis and decision making.


Data-driven business environments can function effectively only if they have fast databases and data warehouses for recording, accessing and analysing data. It is essential to understand the difference between database and data warehouse to enable effective real-time data migration. In case you have any further queries with regards to database vs. data warehouse do drop a line in the comments section below. We will wait to hear from you.