What is the difference between a data lake and a data warehouse?

Data lake and data warehouse are widely used for big data storage, but, although both are data storehouses, these are not interchangeable terms. A data lake is a large set of raw data, which does not yet have a defined purpose. Instead, a data warehouse is a repository of data that is already structured and filtered and has been processed for a specific purpose.

These two types of data storage are often confused, but they are much more different than it may seem. In fact, the only thing they have in common is that they contain large amounts of data.

It is important to make the distinction, as data lake and data warehosue serve different purposes and they require a different approach to be properly optimized.

Both tools are fundamental parts of a data integration process and are often used in ETL processes. Data integration is the foundation of any data strategy. If data is not properly integrated, transforming it into business value will be highly complex.

• If your company does not yet have a well-thought-out data strategy, download our free e-book to learn the essential steps and requirements to consolidate a data strategy that allows you to leverage the business value of data.

What are the differences between data lake and data warehouse?

Some of these main differences are the structure of data, the processing methods, the area they are used at, and what the purpose of the data is.

Thus, a data lake stores raw data that does not yet have a specific purpose. Its end users are data scientists and it has high accessibility. Moreover, in a data lake, because of its easy accessibility, the data can be updated quickly.

On the other hand, a data warehouse has processed data that is already in use and therefore has a specific purpose. The end users of a DWH are usually entrepreneurs and business people and it is somewhat more complicated to make changes in the data it contains.

Benefits of each type of storage

The main difference between the concepts is surely the variable structure of the raw data versus the processed data. Since data lakes usually store raw data, their storage capacity must be higher than that of data warehouses. Having this raw data has many benefits, such as being able to analyze it quickly and for any purpose. However, without proper data quality and data governance measures, data lakes can become an untreatable data container from which little value can be extracted.

The benefits of a data warehouse are also interesting: since they only store processed data, they save a lot of storage space, which translates into money savings. Furthermore, because the data is processed, it is much more comprehensible and accessible to a less technical public.

Beyond their storage purpose, these two concepts are quite different. Data lakes, because of their unstructured content, can be complex to navigate and require a data scientist, while data warehouses are more suitable for an enterprise and to be handled by less technical users. Due to all these differences, each company must evaluate with experts which of the types is more convenient for them in relation to what they are going to use them for.

When to use a data warehouse instead of a data lake?

The decision to use a data warehouse or a data lake depends on the specific requirements and use cases of the organization. Both data warehouses and data lakes have distinct strengths and weaknesses, so understanding the characteristics of each and considering the organization's data management needs is essential. Here are some scenarios when you might choose a data warehouse over a data lake:

1. Structured Data and Business Intelligence: If your organization deals primarily with structured data (e.g., transactional data, sales records, financial data) and requires business intelligence and reporting capabilities, a data warehouse is a suitable choice. Data warehouses are optimized for handling structured data and are designed to support complex analytical queries and generate accurate, consistent reports.

2. Historical Data Analysis: Data warehouses are well-suited for storing historical data and maintaining a record of business transactions over time. They provide a time-variant view of data, allowing historical trend analysis and performance tracking.

3. Well-Defined and Stable Schema: If your data has a well-defined and stable schema, meaning the structure of data doesn't change frequently, a data warehouse is advantageous. Data warehouses rely on predefined schemas to organize data efficiently, making them less flexible to accommodate schema changes on the fly.

4. Aggregated and Summarized Data: If your reporting and analytical requirements involve aggregated and summarized data (e.g., sales totals, quarterly revenues, yearly averages), a data warehouse can efficiently store and manage pre-aggregated data for faster query performance.

5. Integration with Traditional BI Tools: Data warehouses are compatible with traditional Business Intelligence (BI) tools and reporting platforms. If your organization already uses popular BI tools like Tableau, Power BI, or Qlik, integrating a data warehouse into your existing infrastructure is relatively straightforward.

When to use a data lake?

On the other hand, a data lake might be a better choice in the following scenarios:

1. Variety of Data Types: If your organization deals with diverse and unstructured data types, such as text, images, videos, log files, sensor data, etc., a data lake can accommodate the raw, unprocessed data without the need for a predefined schema.

2. Exploratory Analytics and Data Science: Data lakes are suitable for data exploration and advanced analytics, as they allow data scientists and analysts to access raw data and apply different data models, algorithms, and machine learning techniques.

3. Flexibility and Agility: If your data requirements change frequently, and you need to accommodate evolving data sources and formats, a data lake's schema-on-read approach offers more flexibility and agility compared to the rigid schema of a data warehouse.

4. Big Data Processing: Data lakes can handle massive volumes of data, making them ideal for big data processing and storage.

Ultimately, the best approach may involve a combination of both data warehouse and data lake solutions, known as a "hybrid data architecture." In this setup, the data warehouse serves as a structured repository for curated and refined data, while the data lake acts as a raw data repository for exploratory analysis and data processing before moving relevant data into the data warehouse for business reporting and intelligence purposes.

Before you go...

Don't miss our e-book with the keys to designing and building a business data strategy.