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The key Difference Between a Data Warehouse and Data lake

The key Difference Between a Data Warehouse and Data lake


Enterprises have long relied on BI to help them move their businesses forward. Years ago, translating BI into actionable information required the help of data experts. Today, technology supports BI which is accessible to people at all levels of an enterprise.

All that BI data needs to live somewhere. The data storage solution you choose for enterprise app development positions your business to access, secure, and use data in different ways. That’s why it’s helpful to understand the basic options, how they’re different, and which use cases are suitable for each.

In this blog, we will be looking at the key differences between Data lakes and Data warehouses. We will understand their basics and will try to see their implementation in different fields with different tools.

What is Data Lake?

A data lake is a central location in which you can store all your data, regardless of its source or format. It is typically, although not always, built using Hadoop. The data can be structured or unstructured. You can then use a variety of storage and processing tools — typical tools in the extended Hadoop ecosystem — to extract value quickly and inform key organizational decisions. Because of the growing variety and volume of data, data lakes are an emerging and powerful architectural approach, especially as enterprises turn to mobile, cloud-based applications, and the Internet of Things (IoT) as right-time delivery mediums for big data.

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.

A 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. 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 itʼs 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.


1. Data Types

Data warehouses store structured organizational data such as financial transactions, CRM and ERP data. Other data sources such as social media, web server logs, and sensor data, not to mention documents and rich media, are not storable because they are more difficult to model, and their sheer volume makes them expensive and difficult to manage. These types of data are more appropriate for a data lake.

2. Processing

In a data warehouse, data is organized, defined, and metadata is applied before the data is written and stored. We call this process as ‘schema on writeʼ. A data lake consumes everything, including data types considered inappropriate for a data warehouse. Data is present in raw form; information is present to the schema as we extract data from the data source, not when we write it to storage. We call this as a ‘schema on readʼ.

3. Storage and Data Retention

Before we can load data to a data warehouse, data engineers work hard to analyze the data and how to use it for business analysis. They design transformations to summarize and transform the data to enable the extraction of relevant insights. They do not consider the data which doesnʼt answer concrete business questions in the data warehouse. In order to reduce storage space and improve performance — a traditional data warehouse is an expensive and scarce enterprise resource. In a data lake, data retention is less complex, because it retains all data — raw, structured, and unstructured. Data is never going in the deletion phase, permitting analysis of past, current and future information. Data lakes run on commodity servers using inexpensive storage devices, removing storage limitations.

4. Agility

Data warehouses store historical data. Incoming data conforms to a predefined structure. This is useful for answering specific business questions, such as “what is our revenue and profitability across all 124 stores over the past week”. However, if business questions are evolving, or the business wants to retain all data to enable in-depth analysis, data warehouses are insufficient. The development effort to adapt the data warehouse and ETL process to new business questions is a huge burden. A data lake stores data in its original format, so it is immediately accessible for any type of analysis. Information can be retrieved and reused — a user can apply a formalized schema to the data, store it, and share it with others. If the information is not useful, the copy can be discarded without affecting the data stored in the data lake. All this is done with no development effort.

5. Security, Maturity, and Usage

Data warehouses have been around for two decades and are a secure, enterprise-ready technology. Data lakes are getting there, but are newer and have a shorter enterprise track record. A large enterprise cannot buy and implement a data lake like it would a data warehouse — it must consider which tools to use, open source or commercial, and how to piece them together to meet requirements. The end users of each technology are different: a data warehouse is used by business analysts, who query the data via pre-integrated reporting and BI. Business users cannot use a data lake as easily, because data requires processing and analysis to be useful. Data scientists, data engineers, or sophisticated business users, can extract insights from massive volumes of data in the data lake.

Benefits of Data lakes

1. The Historical Legacy Data Architecture Challenge

Some reasons why data lakes are more popular are historical. Traditional legacy data systems are not that open, to say the least, if you want to start integrating, adding and blending data together to analyze and act. Analytics with traditional data architectures weren’t that obvious nor cheap either (with the need for additional tools, depending on the software). Moreover, they weren’t built with all the new and emerging (external) data sources which we typically see in big data in mind.

2. Faster Big Data Analytics as a Driver of Data Lake Adoption

Another important reason to use data lakes is the fact that big data analytics can be done faster. In fact, data lakes are designed for big data analytics if you want and, more important than ever, for real-time actions based on real-time analytics. Data lakes are fit to leverage big quantities of data in a consistent way with algorithms to drive (real-time) analytics with fast data.

3. Mixing and Converging Data: Structured and Unstructured in One Data Lake

A benefit we more or less already mentioned is the possibility to acquire, blend, integrate and converge all types of data, regardless of sources and format. Hadoop, one of the data lake architectures, can also deal with structured data on top of the main chunk of data: the previously mentioned unstructured data coming from social data, logs and so forth. On a side note: unstructured data is the fastest growing form of all data (even if structured data keeps growing too) and is predicted to reach about 90 percent of all data.

Benefits of Data Warehousing

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

  1. Substantial Benefits
    Better data, hence adding data sources to a data warehouse enables organizations to ensure that they are collecting consistent and relevant data from that source. They donʼt need to wonder whether the data will be accessible or inconsistent as it comes into the system. This ensures higher data quality and data integrity for sound decision making.
  2. Faster Decisions
    Data in a warehouse is in always consistent analyzable formats. It also provides analytical power and a more complete dataset to base decisions on hard facts. Therefore, decision-makers no longer need to rely on hunches, incomplete data, or poor quality data and risk delivering slow and inaccurate results.

Tools for Data Warehousing

1. Amazon Redshift

Amazon Redshift is an excellent data warehouse product which is a very critical part of Amazon Web Services — a very famous cloud computing platform. Redshift is a fast, well-managed data warehouse that analyses data using the existing standard SQL and BI tools. It is a simple and cost-effective tool that allows running complex analytical queries using smart features of query optimization. It handles analytics workload pertaining to big data sets by utilizing columnar storage on high-performance disks and massively parallel processing concepts. One of its very powerful features is Redshift spectrum, that allows the user to run queries against unstructured data directly in Amazon S3. It eliminates the need for loading and transformation. It automatically scales query computing capacity depending on data. Hence the queries run fast. Official URL: Amazon Redshift

2. Teradata

Teradata is another market leader when it comes to database services and products. Most of the competitive enterprise organizations use Teradata DWH for insights, analytics & decision making. Teradata DWH is a relational database management system by Teradata organization. It has two divisions i.e. data analytics & marketing applications. It works on the concept of parallel processing and allows users to analyze data in a simple yet efficient manner. An interesting feature of this data warehouse is its data segregation into hot & cold data. Here cold data refers to less frequently used data and this is the tool in the market these days. Official URL: Teradata

Tools for Data lakes

1. Amazon S3

The Amazon S3-based data lake solution uses Amazon S3 as its primary storage platform. Amazon S3 provides an optimal foundation for a data lake because of its virtually unlimited scalability. You can seamlessly and nondisruptively increase storage from gigabytes to petabytes of content, paying only for what you use. Amazon S3 has 99.999999999% durability. It has scalable performance, ease-of-use features, and native encryption and access control capabilities. Amazon S3 integrates with a broad portfolio of AWS and third-party ISV data processing tools.

2. Azure Data lake

Azure Data Lake Storage Gen2 is a highly scalable and cost-effective data lake solution for big data analytics. It combines the power of a high-performance file system with massive scale and economy to help you speed your time to insight. Data Lake Storage Gen2 extends Azure Blob Storage capabilities and can handle analytics workloads. Data Lake Storage Gen2 is the most comprehensive data lake available.


So Which is Better? Data Lake or the Data Warehouse? Both! Instead of a Data Lake vs Data Warehouse decision, it might be worthwhile to consider a target state for your enterprise that includes a Data Lake as well as a Data Warehouse. Just like the advanced analytic processes that apply statistical and machine learning techniques on vast amounts of historical data, the Data Warehouse can also take advantage of the Data Lake. Newly modeled facts and slowly changing dimensions can now be loaded with data from the time the Data Lake was built instead of capturing only new changes.

This also takes the pressure off the data architects to create each and every data entity that may or may not be used in the future. They can instead focus on building a Data Warehouse exclusively on current reporting and analytical needs, thereby allowing it to grow naturally.

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