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What Is a Data Warehouse?

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Blog / Articles / What Is a Data Warehouse?
what is a data warehouse
Data warehousing is one of the hottest topics both in business and in data science.
But if you’re new to the field, you’re probably wondering what a data warehouse is,
why we need it, and how it works. Don’t worry because, in this article, you’ll find
the answers to all these questions.

First, let’s start with a definition: the meaning of the phrase: ‘Single source of
truth’.

What Is the Single Source of Truth?

In information systems theory, the ‘single source of truth’ is the practice of
structuring all the best quality data in one place.

Here’s a very simple example.

Surely it has happened to you to work on a file and to create many different
versions of it.

How do you name such a file?

Well, once you are ready you often place the word ‘final’ at the end. This results
in having a bunch of files with extensions:

‘final’
‘final, final’
‘final, final, final’
Or my favorite:

‘really final’… ‘final’

If this is you, you are not alone. It seems that even corporations never know where
the most recent or most appropriate file is.

an Excel file with many different versions and extensions

But what if you knew that there is one single place where you would always have the
single source of information?
That would be quite helpful wouldn’t it?

Well, a data warehouse exists to fill that need.

So, what is a data warehouse exactly?

data warehouse definition
It is the place where companies store their valuable data assets, including
customer data, sales data, employee data, and so on.

In short, a data warehouse is the de facto ‘single source of data truth’ for an
organization. It is usually created and used primarily for data reporting and
analysis purposes.

There are several defining features of a data warehouse.

It is:

subject-oriented
integrated
time-variant
nonvolatile
summarized
Let’s quickly go through these, one by one.

Subject-oriented means that the information in a data warehouse revolves around

some subject.
Therefore, it does not contain all company data ever, but only the subject matters
of interest. For instance, data on your competitors need not appear in a data
warehouse, however, your own sales data will most certainly be there.

a data warehouse is subject oriented

Integrated corresponds to the example from the beginning of the video.
Each database, or each team, or even each person has their own preferences when it
comes to naming conventions. That is why common standards are developed to make
sure that the data warehouse picks the best quality data from everywhere. This
relates to ‘master data governance’, but that is a topic for another time.

a data warehouse is integrated

Time-variant relates to the fact that a data warehouse contains historical data,
too.
As said before, we mainly use a data warehouse for analysis and reporting, which
implies we need to know what happened 5 or 10 years ago.

a data warehouse is time-variant

Nonvolatile implies that the data only flows in the data warehouse as is.
Once there, it cannot be changed or deleted.

a data warehouse is nonvolatile

Summarized once again touches upon the fact that the data is used for data
analytics.
Often it is aggregated or segmented in some ways, in order to facilitate analysis
and reporting.

a data warehouse is summarized

So, that’s what a data warehouse is – a very well structured and nonvolatile, ‘de
facto’, single source of truth for a company.

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