What is a Data Warehouse?

on Amazon Redshift, Big Data, Data Analytics, Data Lakes, Data Warehouse, Data Warehouses, ETL, ETL Tools, Google BigQuery, OLTP, Snowflake • October 8th, 2021 • Write for Hevo

You would have manually gathered data from many sources and worked hard to make them consistent and then load it into your Databases. And then you would pick up the data from database and process the huge data using analytical tool to get meaningful insights. All these can be done in a single place, that is Data Warehouse for you. Data Warehouse will become your organizations single source of truth with inbuilt analytical tools. There are many tools like Hevo available that load data to Data Warehouse and automatically transform it.

In this blog, you will get to know completely about a Data Warehouse. Starting from what is a Data Warehouse? to the tools available currently in the market. This blog is a complete guide for you to get started with Data Warehouse.

Table of contents

What is a Data Warehouse?

Data Warehouse is an aggregated collection of data from various sources. This makes Data Warehouse a single, central, consistent data store to help in the process of data mining, data analysis, machine learning, artificial intelligence and etc. A Data Warehouse is a repository of the current and historical information that has been collected. The Data Warehouse is an information system that forms the core of an organization’s business intelligence infrastructure. 

Data Warehouse is the Central Data Store within your company. There is a need for a Data Warehouse for all the enterprises that want to make data-driven decisions because a Data Warehouse is the “Single Source of Truth” for all the data in the company. Data Warehouse stores data from multiple sources such as APIs, Databases, Cloud Storage, etc., using the ETL (Extract Load Transform) process.

What is Data Warehousing?

Data warehousing is the combination of various processes and methods used for collecting and storing vast amounts of data for the purpose of query and analysis, in order to generate information and insights for business intelligence. 

Getting the data from the business transaction systems to the analytical systems (known as data migration) involves the ETL Process

The ETL process is used to Extract data from the source systems, Transform the data into a usable, queryable form and then Load said data to the destination database: the data warehouse. This may also involve extracting and combining different data sets from a variety of disparate sources into a singular cohesive form. This process is referred to as data integration

Elements of Data Warehouse

The basic elements of a Data Warehouse include:

  • Relational Database– To store and manage data from multiple sources.
  • ELT solution– Extraction, Loading, and Transformation solution to transfer the data for further analysis.
  • Data mining capabilities– The data mining facilities available in traditional databases will be available in a Data Warehouse also.
  • Statistical analysis and reporting– Data Warehouse will have inbuilt options for statistical analysis and preparing reports based on the insights achieved.
  • Client analysis tools– Data Warehouses hold this special visualization tool for presenting data to business users.
  • Advanced Analytical tools– Data Warehouse also has a lot of analytical applications to get useful insights from the data available in the Data Warehouse without having to transport it anywhere.

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Cloud Data Warehouse and Modern Data Warehouse

Cloud Data Warehousing ingest and store data in a cloud from various data sources. To overcome the difficulties of scaling in on-premises Data Warehousing, Cloud Data Warehousing are used. This cloud based Data Warehouses are easily scalable and can handle complex forecasting. Mostly cloud Data Warehouses are fully-managed and easy to use. Main advantages of this cloud based Data Warehouses apart from scalability is that they are easy to use and manage and most importantly cost efficient.

Modern Data Warehouses are designed to overcome the challenges faced by different teams in an organization. It is a blend of best architecture patterns with all the essential components. This includes a converged database to handle all types of data. A self-serviced data ETL service is available. Moreover it supports SQL, Machine Learning, spatial processing and etc. Advanced analytics option makes the entire data processing part easier. The process of provisioning, scaling and administration is automated completely in this. An efficient streamline data workflows is the characteristic that differentiates it from actual Data Warehouses. This reduces the delays and complexity when different teams work with it.

Data Warehouse Architecture

The general Data Warehouse architecture is a three-tier architecture with a bottom, middle, and top tier.

Data Warehouse: Data Warehouse architecture
Image Source: IBM

Bottom tier

This is the first layer in the Architecture that has a Data Warehouse server that typically gathers data from different sources and stores them in a relational database. The process of Extract, Transform, and Load (ETL) or Extract, Load, and Transform (ELT) are employed for collecting, cleansing, and transforming data from multiple sources.

Middle tier

This middle tier generally has the OnLine Analytical Processing (OLAP) server. This is available to increase the query speed. There are different types of OLAP models that are preferred depending upon the type of database used. The three types of OLAP models are:

  • ROLAP -Relational Online Analytical Processing
  • MOLAP -Multidimensional Online Analytical Processing
  • HOLAP -Hybrid Online Analytical Processing

Top tier

The topmost tier of the architecture consists of reporting tools for the users to conduct data analysis on the available data. The top tier is mostly the front-end user interface that directly connects with the users.

Schemas in Data Warehouse

The two most important Schema available are Star Schema and Snowflake Schema.

Star Schema

The Star Schema provides the simplest way of organizing data in a Data Warehouse. The centre of the Star Schema can have one or more Fact Tables indexing a series of Dimension Tables. Dimension Tables are used to describe Dimensions; they contain Dimension Keys, Values, and Attributes.

Data Warehouse:: Star schema
Image Source: Microsoft

The goal of the Star Schema is to separate the numerical “FACT” data that relates to a business from the descriptive or “DIMENSIONAL” data. 

Fact data can include information such as price, speed, weight, and quantities, that is, data presented in a numerical format. Dimensional Data can include uncountable things such as colours, geographical locations, salesperson names, employee names, etc., alongside the numerical information. 

The Fact Data is organized inside the Fact Tables, while the Dimensional Data inside the Dimension Tables. The Fact Tables form the integration points at the centre of a Star in a Star Schema. 

Snowflake Schema

This type of Data Warehouse Schema takes the shape of a Snowflake. The goal of the Snowflake Schema is to normalize the denormalized data of the Star Schema. The Snowflake structure materialized when the dimensions of a Star Schema are detailed and highly structured, having several levels of relationship, and the child tables have multiple parent tables. The Snowflake Schema solves some of the common problems associated with the Star Schema. 

You can see the Snowflake Schema as a “multi-dimensional” structure. At the core of a Snowflake Schema is Fact Tables that connect the information contained in the Dimension Tables, which in turn radiate outwards like the Star Schema. However, the Dimension Tables in the Snowflake Schema are divided into more than one table, creating a Snowflake pattern. 

Data Warehouse: Snowflake schema
Image Source: Geeksforgeeks

The Dimension Tables are turned into more than one table until they are completely normalized. 

Comparing Star and Snowflake Schema

Data Warehouse: Star vs Snowflake Schema
Image Source: techdifferences

The following chart summarizes the differences between the Star and Snowflake Schemas by comparing the Star and Snowflake Schema across numerous factors:

Star Schema Snowflake Schema
The Star Schema contains the Fact Tables and the Dimension Tables. The Snowflake Schema contains the Fact Tables, Dimension Tables, and the Sub-Dimension Tables. 
It is a top-down model. It is a bottom-up model.
Queries execute faster in the Star Schema. This is achieved using the Star Join Query Optimization technique. Tables can be connected with Multiple Dimensions. Execution of queries takes a longer time in the Snowflake Schema than in the Star Schema. The centralized Fact Table in the Snowflake Schema is less likely connected with Multiple Dimensions. The longer execution time is also caused by the many number of foreign keys. 
There is no normalization in the Star Schema. In the Snowflake Schema, there is both normalization and denormalization. 
It has a very simple design. This Schema has a complex design because of the Sub-Dimension Tables. 
The Star Schema has a low query complexity. The query complexity of the Snowflake Schema is higher than that of the Star Schema. 
It’s easy to understand the Star Schema. It’s difficult to understand the Snowflake Schema. 
It only has a few number of foreign keys. It has a high number of foreign keys. 
The Star Schema has a high data redundancy, which makes it a bit difficult to maintain and change. The Snowflake Schema has a low data redundancy, which makes it easier to maintain and change. 
The hierarchies for the Dimensions are kept in the Dimensional Table.The hierarchies for the Dimensions are divided into separate tables. 
In the Star Schema, only a single join creates the relationship between the Fact Table and the Dimension Tables. In the Snowflake Schema, many joins are needed to fetch the data. 
It has a simple database design. It has a complex database design. 
Faster cube processing. Cube processing may be slow due to the complex join. 
It is suitable for data marts that have simple relationships (1:1 or 1:many).Suitable for use in the Data Warehouse core for simplifying complex relationships (many:many).  
Should be used when the Dimension Table has less number of rows. Should be used when the Dimension Table has a relatively big size because it reduces space. 

Data Warehouse vs Others

Data Warehouse vs Data lake

It is essential to understand the difference between Data Warehouses and Databases to appreciate their purpose. The prime purpose of database is fast querying and transaction processing. Database does not support analytics. While the Data Warehouses stand out here since it has inbuilt analytics tools. Database limits its storage to a particular application, while Data Warehouses are designed to store data of various applications under a single unit. Most important point in the discussion of Data Warehouse vs Database, database mainly focuses on real-time data updating. While Data Warehouses focus one step forward by collecting real-time and historical data to perform analysis on it.

Data Warehouse vs Data lake

Data lake is a subset of Data Warehouse. In the comparison of Data Warehouse vs Data lake, Data Warehouse collects raw data from various sources and creates a single source of truth. This central repository of Data Warehouse is structured using the predefined schemas for the purpose of analytics. While data lake is very similar to Data Warehouse except the fact that it does not have any predefined schema. Mostly data lakes are built on the big data platforms like Apache Hadoop.

Data Warehouse vs Data mart

A Data Warehouse acts as a large Data Storage Unit for all your business data and is used to help an organization make informed decisions. Data Marts, on the other hand, are particular subsets of Data Warehouses that work on a particular line of business. In the discussion about Data Warehouse vs Data mart, one point to highlight about data mart is that it provides a very narrow insight on your business line. Data marts also save time since they process only data of one particular stream.

OLAP and OLTP in Data Warehouse

Online Analytical Processing(OLAP) is a software in Data Warehouse to perform analysis on large volumes of data at high speed. While Online Transactional Processing(OLTP) helps in processing real-time queries by multiple people at the same time over internet. OLAP is used for analytics while OLTP is used for transactional purpose.

Multidimensional analysis of data is is the purpose of OLAP in Data Warehouse with real-time and historical data. OLAP is mostly used in data mining and Business Intelligence(BI) applications. Really complicated analysis and predictive analysis can be carried out in OLAP easily. Main business reporting functions like financial analysis, forecast planning and budgeting are some tasks of OLAP.

For processing real-time data transactions quicky and accurately OLTP is used in Data Warehouse. OLTP is mostly used in ATM systems, e-commerce softwares, online bookings, reservation systems, credit card processing and etc.

Benefits of a Data Warehouse

Data Warehousing have a lot of benefits, to highlight the two most important benefits.

  • Better data: This solves the problem of inconsistent data and data accessibilty. Data Warehouse becomes a single source of truth with consistent and relevant data from various data sources.
  • Faster decisions: The ready to use data with inbuilt analytics tool makes it the best option to make factual fast decisions. The decision makes can strongly rely on the decisions as they are from complete , high quality data ,hence reducing the risk.

Data Warehousing Tools

There a lot of Data Warehousing Tools, here are few examples of Data Warehousing Tools.

Amazon Redshift

Amazon Redshift is a simple, fast, and efficient Data Warehousing Tool that makes it possible to analyze data using simple SQL queries with existing Business Intelligence Tools. It can run complex analytical queries by using processes such as high-performance computing, parallel execution, uniform query optimization, and columnar storage. 

Amazon Redshift uses the AWS platform and requires administrators to configure the environment by creating nodes and clusters. Hence, it is based on a clustered methodology. These clusters help in providing capacity, monitoring, and backing up the data warehousing and also to apply patches and maintain the software. These clusters can be managed based on the user’s requirements with ease. As a beginner, users can start with either a small or single node cluster and then expand it to larger multi-node clusters as their requirements increase.

Google BigQuery

Google BigQuery is a Data Warehousing Tool that is serverless, cost-effective, highly-scalable, and has machine learning built into it and uses the Business Intelligence Engine for its operations. It analyzes petabytes of data using the ANSI SQL language at very fast speeds, offers insights and solutions from data across clouds with a flexible architecture, is able to store and query massive data sets in a cost-effective and efficient way.

Google BigQuery also has a flexible, multi-cloud analytics solution that is powered by Anthos to analyze data across different cloud platforms. This is called the BigQuery Omni(private alpha). Google BigQuery also has a natural language interface for petabyte-scale analytics to operate on data sources. It helps to improve the productivity of different Business Intelligence teams and manage data from tools like Sheets and chatbots and custom applications.

Snowflake

Snowflake is an analytical Data Warehousing Tool that provides a faster, easier to use, and more flexible framework more than a normal data warehousing. Snowflake offers a complete SaaS (Software as a Service) architecture because it runs completely on the cloud. 

In order to use Snowflake, no hardware or software needs to be externally or internally installed or configured. Maintenance is also handled directly by Snowflake. It can only be run using public cloud infrastructure as it uses the virtual compute instances for its computational needs and storage service for persistent storage. All updates and patches are taken care of by Snowflake only and no other software is responsible for installing these features.

Conclusion

From this blog, you would now know entirely about Data Warehouse starting from what it is, it’s architecture, benefits, schema, tools. This blog will be your forever guide to get started with Data Warehousing.

In case you want to integrate data from data sources into your desired Database/destination and seamlessly visualize it in a BI tool of your choice, then Hevo Data is the right choice for you! It will help simplify the ETL and management process of both the data sources and destinations.

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