Data Warehouse: Definition, Uses, and Examples

Written by Coursera Staff • Updated on

Where do you store a petabyte of data for business intelligence? In a data warehouse. Explore what a data warehouse is with real world examples.

[Featured Image] A software engineer gives her colleagues a presentation on implementing a new data warehouse.

Data warehouses store and process large amounts of data from various sources within a business. An integral component of business intelligence (BI), data warehouses help businesses make better, more informed decisions by applying data analytics to large volumes of information. 

Learn more about what data warehouses are, their benefits, and how they’re used in the real world. Also, discover how data warehouses differ from other similar concepts, explore common warehousing tools, and find relevant courses that can help you start a career in data. 

Note: See bottom of article for a complete acronym glossary.

What is a data warehouse?

A data warehouse, or “enterprise data warehouse” (EDW), is a central repository system in which businesses store valuable information, such as customer and sales data, for analytics and reporting purposes. 

Used to develop insights and guide decision-making via business intelligence (BI), data warehouses often contain a combination of both current and historical data that has been extracted, transformed, and loaded (ETL) from several sources, including internal and external databases.

Typically, a data warehouse acts as a business’s single source of truth (SSOT) by centralizing data within a non-volatile and standardized system accessible to relevant employees. Designed to facilitate online analytical processing (OLAP) and used for quick and efficient multidimensional data analysis, data warehouses contain large stores of summarized data that can sometimes be many petabytes large [1].

Learn more: What Is Business Intelligence Reporting?

Data warehouse examples

As data becomes more integral to the services that power our world, so too do warehouses capable of housing and analyzing large volumes of data. Whether you’ve realized it or not, you likely use many of these services every day. 

What is an example of a data warehouse?

Imagine a giant digital warehouse storing all your shopping information from various stores you frequent. That's a simplified analogy for a data warehouse. In the real world, your favorite store's data warehouse might combine sales transactions, customer loyalty program details, and inventory data to understand buying habits and optimize stock management.

A data warehouse is a large central storage unit for current and historical data collected from various sources. Unlike databases used for daily operations, data warehouses hold historical information, often from multiple departments or even companies. This allows data analysts to examine trends over time, identify patterns, and gain insights that can inform better business decisions.

Placeholder

Some of the most common real-world examples of data warehouses being used today include the following:

1. Health care 

In recent decades, the health care industry has increasingly turned to data analytics to improve patient care, efficiently manage operations, and reach business goals. As a result, data scientists, data analysts, and health informatics professionals rely on data warehouses to store and process large amounts of relevant health care data [2]. 

Read more: Health Care Analytics: Definition, Impact, and More

Placeholder

professional certificate

Meta Data Analyst

Launch your career in data analytics. Build job-ready skills – and must-have AI skills – for an in-demand career. Earn a credential from Meta in 5 months or less. No degree or prior experience required.

4.7

(613 ratings)

29,971 already enrolled

Beginner level

Average time: 5 month(s)

Learn at your own pace

Skills you'll build:

SQL, Pandas, Generative AI in Data Analytics, Data Analysis, Python Programming, Marketing, Data Management, Data Visualization, Linear Regression, Statistical Analysis, Statistical Hypothesis Testing, Spreadsheet, Tableau Software

2. Banking 

Open up a banking statement and you’ll likely see a long list of transactions: ATM withdrawals, purchases, bill payments, and on and on. While the list of transactions might be long for a single individual, they’re much longer for the many millions of customers who rely on banking services every day. Rather than sitting on this wealth of data, banks use data warehouses to store and analyze this data to develop actionable insights and improve their service offerings. 

3. Retail

Retailers—whether online or in-person—are concerned about how much product they’re buying, selling, and stocking. Today, data warehouses allow retailers to store large amounts of transactional and customer information to help them improve their decision-making when purchasing inventory and marketing products to their target market

Data warehouse benefits

Data warehouses provide many benefits to businesses. Some of the most common benefits include: 

  • Provide a stable, centralized repository for large amounts of historical data 

  • Improve business processes and decision-making with actionable insights

  • Increase a business’s overall return on investment (ROI)

  • Improve data quality 

  • Enhance BI performance and capabilities by drawing on multiple sources

  • Provide access to historical data business-wide

  • Use AI and machine learning to improve business analytics

Data lake vs. data warehouse vs. database

Certain terms and concepts help you make sense of the field and perform your job responsibilities should you pursue a profession in data analytics. Take a look at three common terms: data warehouse, data lake, and database. At a glance, here's what each means:

DatabaseData warehouseData lake
Any collection of data stored electronically in tables. In business, databases are often used for online transaction processing (OLTP), which captures and records detailed information in real-time, such as sales transactions, and then stores them for later reference.A centralized repository and information system that is used to develop insights and guide decision-making through business intelligence. A data warehouse stores summarized data from multiple sources, such as databases, and employs online analytical processing (OLAP) to analyze data.A large repository designed to capture and store structured, semi-structured, and unstructured raw data. This data can be used for machine learning or AI in its raw state and data analytics, advanced analytics, or databases and data warehouses after being processed.

Read more: Data Lake vs. Data Warehouse: What’s the Difference?

Data warehouse concepts

Whether you’re looking to start a career in business intelligence or data analytics, more generally, you should have a strong grasp of key data warehouse concepts and terms. Some of the most common to know include the following: 

Data warehouse architecture 

The exact architecture of a data warehouse will vary from one to another. Data warehouses can be one-, two-, or three-tier structures. Perhaps the most common, however, is the three-tier architectural structure, which looks as follows: 

  • Bottom tier, also called the data tier, where the data is supplied to the warehouse 

  • Middle tier, also called the application tier, where an OLAP server processes the data 

  • Top tier, also called the presentation tier, which is designed for end-users with particular tools and application programming interfaces (APIs) used for data extraction and analysis

Cloud data warehouse 

Traditionally, data warehouses were housed in servers within a business’s physical location. Today, though, more and more data warehouses use cloud storage to house and analyze large volumes of data. Some of the most common cloud data warehouse software include: 

  • Microsoft Azure data warehouses, particularly Azure Synapse Analytics and Azure SQL database 

  • AWS’ data warehouse Amazon Redshift

  • Google Cloud’s data warehouse Google Big Query

  • Snowflake data warehouse

Data warehouse acronym glossary

AcronymTerm
AIArtificial intelligence
ATMAutomated teller machine
BIBusiness intelligence
EDWEnterprise data warehouse
ETLExtracted, transformed, and loaded
OLAPOnline analytical processing
OLTPOnline transaction processing
ROIReturn on investment
SQLStructured query language
SSOTSingle source of truth

Get started with data warehouses 

Data warehouses are powerful tools used by businesses every day. Start your own journey toward working with data warehouses today by taking a flexible online course like the IBM Data Warehouse Engineer Professional Certificate, which can help you develop job-ready skills for an entry-level role in data warehousing.

The IBM BI Foundations with SQL, ETL and Data Warehousing Specialization can help you prepare for BI analytics success by developing hands-on skills for building data pipelines, warehouses, reports, and dashboards.

Placeholder

professional certificate

IBM Data Warehouse Engineer

Kickstart your Career in BI Engineering. Develop job-ready skills for an entry level role in Data Warehousing.

4.7

(740 ratings)

18,441 already enrolled

Beginner level

Average time: 4 month(s)

Learn at your own pace

Skills you'll build:

Data Warehousing, Shell Script, Bash (Unix Shell), Extract Transform and Load (ETL), Linux, Linux Commands, Extraction, Transformation And Loading (ETL), OLTP Databases, Relational Database, Data Pipelines, Database (DB) Design, Postgresql, Relational Database Management System (RDBMS), Database Architecture, MySQL, Database Security, Database (DBMS), Database Servers, database administration, Data Science, Information Engineering, SQL, NoSQL, Cubes, Snowflake Schemas, Data Lakes, Rollups, Data Marts, Star Schemas, Data Analysis, Create, Read, Update And Delete, Business Intelligence, Data Visualization, IBM Cognos Analytics, Google Looker Studio, Dashboards, Data Engineer, Apache Kafka, Apache Airflow

Placeholder

specialization

BI Foundations with SQL, ETL and Data Warehousing

Get job-ready for your first role in BI. Build the in-demand skills you need to get started in business intelligence (BI) in just 2 months. No degree or prior experience required.

4.6

(361 ratings)

10,350 already enrolled

Beginner level

Average time: 2 month(s)

Learn at your own pace

Skills you'll build:

Business Intelligence, SQL queries, SQL Queries, cognos analytics, Cognos Analytics, Bash Scripting, BASH scripting, Enterprise Data Warehouse(EDW), Extract Transform and Load (ETL), Data Engineer, Apache Kafka, Apache Airflow, Data Pipelines, Data Visualization, IBM Cognos Analytics, Google Looker Studio, Dashboards, Shell Script, Bash (Unix Shell), Linux, Linux Commands, Cubes, Data Warehousing, Snowflake Schemas, Data Lakes, Rollups, Data Marts, Star Schemas, Python Programming, Cloud Databases, Relational Database Management System (RDBMS), SQL, Jupyter notebooks

Article sources

1

Amazon Web Services. “What’s the Difference Between a Data Warehouse, Data Lake, and Data Mart?, https://aws.amazon.com/compare/the-difference-between-a-data-warehouse-data-lake-and-data-mart/.” Accessed July 26, 2024.

Updated on
Written by:
Coursera Staff

Editorial Team

Coursera’s editorial team is comprised of highly experienced professional editors, writers, and fact...

This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other credentials pursued meet their personal, professional, and financial goals.

Whether you're starting your career or trying to advance to the next level, experts at Google are here to help.

Save money and learn in-demand skills from top companies and organizations at your own pace.