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Who Doesn’t Need a Data Warehouse?

Originally published September 16, 2010

There is much talk about data warehousing and all of its advantages. There is the significant savings in the cost of doing analytical processing. There is the speed of information which data warehousing greatly accelerates. There is the ability to hold and allow access to historical information. And finally there is the value of integrated data. With integrated data there is the possibility of looking at and understanding true corporate data, not application data.

The world discovers a new reason to have a data warehouse every day. So it is natural to ask this question: Does everyone need a data warehouse? The answer is that even though data warehouses supply many advantages, not everyone needs a data warehouse.

In order to determine who does not need a data warehouse, let’s look at the business value of a data warehouse, not the technical value of a data warehouse. For a variety of reasons, the business case for not having a data warehouse is much more compelling and much more interesting than the technical case.

The main thing that a data warehouse provides is integrated corporate data. If the business does not need a unified set of information to run one, then there probably is no need for a data warehouse. If the same person is involved in every sale, in every product development, in every marketing initiative, in every financial transaction, then from an integration standpoint there is no need for a data warehouse. If one person knows all of this information, then there is no need for integrating business data.

If there is little or no latency time in the access and analysis of information, then the businessperson doesn’t need a data warehouse. If information is immediately available, if there is no need to search for information and question the information even when it is found, then there is no need for a data warehouse.

Another thing that a data warehouse does is to keep track of information over time. If an individual can remember every detail about every sale, every transaction, every transaction that was not completed, and every change that has been made to the product, then there is no need for a data warehouse.

If the business is very vertical – where the same product is sold over and over or the same service is provided repeatedly – there is a lessened need for a data warehouse.

If a business man/woman is satisfied that their information systems serve EVERY need – transaction processing, query processing, analytical processing – then there is no need for a data warehouse.

So who fits these descriptions – these criteria? The answer is that the mom and pop businesses – where one or two people literally do everything – fit these criteria. If one or two people take care of everything the business does, then there probably is no need for a data warehouse. But if multiple people are involved in the business, then there definitely is a need for a data warehouse.

Now there are many small businesses that need a data warehouse but cannot afford one. Data warehouses have the (well deserved) reputation of being expensive. It is not by chance that large telephone companies, retailers, airlines, pharmaceuticals, and many other big companies have data warehouses. But what about mid-size and even smaller companies that need a data warehouse but can’t afford them?

In the past, the cost of a data warehouse was simply prohibitive. But in recent vintage, there is a lot of good news when it comes to the affordability of a data warehouse. The mid-size businesses need not be locked out of a data warehouse forever. Some recent advancements that have the potential to lower the cost of a data warehouse include Talend in ETL processing, data warehouse appliances such as Netezza, and even analytical infrastructure tools such as RapidACE.

  • Bill InmonBill Inmon

    Bill is universally recognized as the father of the data warehouse. He has more than 36 years of database technology management experience and data warehouse design expertise. He has published more than 40 books and 1,000 articles on data warehousing and data management, and his books have been translated into nine languages. He is known globally for his data warehouse development seminars and has been a keynote speaker for many major computing associations.

    Editor's Note: More articles, resources and events are available in Bill's BeyeNETWORK Expert Channel. Be sure to visit today!

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