When Do You Need a Data Lake vs a Data Warehouse?

For folks new to data & analytics, it’s not uncommon to be confused between data warehouses and data lakes. Both are repositories to store large volumes of data, but they have distinct characteristics and core use cases. This article aims to educate you on data warehouses and data lakes, when large organizations use them, and where each data architecture really shines.

Data Warehouses

Data warehouses have been around for quite some time now, and many reading the blog may be familiar with the architecture. For those who are new, a data warehouse is a centralized repository designed to store structured data—data that has already been processed for a very specific use case. This may include log files, defined Excel and CSV files, PoS data, SQL databases and more. Compared to data lakes, data warehouses are much faster at querying and analyzing structured data. They have rigid schemas (schema-on-write), meaning that datasets must be transformed and processed to a specific format/schema as they are ingested into a data warehouse.

Use cases for Data Warehouses

• Business Intelligence and Dashboards: Data teams use data warehouses to analyze data and provide a reliable, consistent view of business metrics across the organization. They can also help create visual dashboards that can be presented to business leaders and corporate executives for data-driven decision-making.
• Historical Analysis: Data warehouses can be used to analyze historical data, track changes over time, perform trend analyses, and predict future demand.
• Performance Optimizations: Data warehouses are optimal for applications and teams requiring fast querying (possibly real-time or near-real-time).
• Creating Data Marts: Data warehouses are typically used to help create smaller data marts for individual units and departments across the enterprise.

Data Lakes

Data lakes are storage repositories that can store any data in raw, untouched format. They can store unstructured, semi-structured, and structured datasets without needing any transformations as they are ingested; the required schema is applied when the data is retrieved and used for downstream processing (schema-on-read).

Use cases for Data Lakes:

• Analyzing large sets of unstructured data: Data lakes are ideal for performing analyses on large datasets, including data from logs, social media posts, IoT sensors, images, videos, audio, etc.
• Artificial Intelligence and Machine Learning: Data lakes stage raw data that is retrieved, processed, and transformed to train machine learning algorithms and AI models.
• Data Science: Data engineers and scientists use data lakes to access raw, unfiltered data for exploratory analyses and hypothesis testing.
• Data Archiving: Data lakes can also be a low-cost storage repository for an enterprise’s inactive data.

When do you choose a Data Lake vs a Data Warehouse?

Choose a data warehouse when:

• You need fast querying capabilities on structured datasets
• Your data access and usage patterns are very well-defined and unlikely to change frequently
• You require a single source of truth for all granular business metrics

Choose a data lake when:

• You need to store large volumes of diverse data types
• Your data needs are not fully defined yet
• You want to invest in data science and ML/AI projects
• You need a flexible, scalable solution with comparatively lower costs of storage

In a modern enterprise, both data lakes and data warehouses are important. Most organizations use data lakes and data warehouses interchangeably in their day-to-day operations for data storage and initial processing before moving to data warehouses to perform downstream analytics jobs on query-ready datasets. As industries become increasingly digital, understanding when and how different data architectures can be used becomes crucial for effective and efficient data management and analytics.

About the Author

Hello there! I am Haricharaun Jayakumar, a senior executive in product marketing at Solix Technologies. My primary focus is on data and analytics, data management architectures, enterprise artificial intelligence, and archiving. I have earned my MBA from ICFAI Business School, Hyderabad. I drive market research, lead-gen projects, and product marketing initiatives for Solix Enterprise Data Lake and Enterprise AI. Apart from all things data and business, I do occasionally enjoy listening to and playing music. Thanks!