Data platform vs. data warehouse: Key differences and use cases

Highlights

You’ll learn the key differences between a data platform and a data warehouse.

• Data Type: Data platforms handle structured and unstructured data, while data warehouses focus on organized, structured data
• Use Cases: Data platforms power real-time analytics, while data warehouses excel in historical reporting
• Flexibility: Data platforms offer scalable, adaptable features, while warehouses are ideal for predefined tasks

Every modern enterprise considers data a valuable asset. Analysts went as far as calling it “the new oil.” Oil undergoes multiple processes to get it from the ground to a valuable resource like gasoline for automobile engines. The same applies to data.

This presents a challenge for businesses as they need the right tools to collect, transform, organize and use such vast amounts of data.

Data platforms and data warehouses are two essential ones, each catering to specific business needs. We explore how they relate or differ, including use cases and how to decide which is right for your organization.

What is a data platform?

A data platform is a tech solution designed to collect, store, clean, transform, govern and analyze data. You can think of it as an integrated system where data flows in from multiple sources for businesses to use in decision-making, analytics and product innovation.

Key components of a data platform

A data platform has several key features that you should always watch out for:

• Data ingestion: It can pull structured and unstructured data from various sources, such as streaming data, log files and relational and NoSQL databases. It also supports batch and real-time data ingestion.
• Data storage and processing: It can fetch, store and process data using cloud-based solutions. It may include tools like ETL, data warehouse, data lakes, data mesh, etc.
• Analytics and insights: It supports self-service analytics, enabling you to predict trends, understand behavior and optimize business operations.
• Data governance: It offers features like quality management, access control, monitoring and audit trails. These features enable you to automate data compliance. 

Benefits of a data platform

Whether you need to develop new product features, set prices for your products or services or choose an ideal channel to connect with your customers, the data should guide your decision. A data platform can help in several ways, such as:

• Versatility: Unlike specialized systems, a data platform supports structured (databases) and unstructured data (videos, logs, etc.).
• Real-time decision-making: A modern data platform enables instant and real-time data processing to power AI-driven recommendations or customer responses.
• Ease of Use: It is self-service for diverse users. Modern data platforms offer user-friendly interfaces, making it easy for business teams to work with. It also reduces dependence on IT.
• Scalable solutions: Its use of cloud-based platforms allows you to scale on demand to accommodate growing data volumes and sources, as well as changing customer needs.

A data platform would be relevant for flexible data processing capabilities, such as personalizing customer experiences and using real-time data to activate technology applications and new features.

What is a data warehouse?

A data warehouse is a centralized repository that stores and organizes historical data from multiple sources for analytics, reporting and business intelligence. Data in a data warehouse follow a consistent format, are time-stamped and are organized around a consistent subject, like sales or marketing.

Features of a data warehouse

A data warehouse has unique features that make it stand out from other data tools. This includes:

• Structured data storage: They organize data into predefined schemas with denormalized tables for online analytical processing (OLAP).
• Centralized repository: They store processed data from various sources in one accessible location.
• Supports reporting and BI: They power BI tools, like financial reports, dashboards and analytics apps.
• Fast query processing: For pre-defined questions and metrics, data warehouses deliver fast results.

Benefits of data warehouses

So, what benefits can you expect from a data warehouse? Here are some pointers to start from.

• Enhanced data quality: Data warehouses often include data cleansing and integration processes, ensuring data accuracy and consistency.
• Cost savings: Since it works with only structured data, it can save costs by saving only what is necessary.
• Long-term data storage: By storing vast amounts of historical data, businesses can improve their forecasting, trend analysis and long-term planning.
• Improved access to data: Given that it centralizes data from multiple sources, it allows you to access data quickly.

A data warehouse is relevant for business intelligence, such as tracking seasonal trends and inventory needs. It also supports auditing and compliance, as well as operational reporting.

Data platform vs. data warehouse: How they compare

The decision between a data platform and a data warehouse depends on your business’s data needs. Here are different capabilities and how they compare:

Real-time access to data

A data platform supports real-time access to data. It is ideal for campaigns that require spontaneous messaging, such as triggered messages, while a data warehouse processes data in batches, so they do not support real-time data access and operations.

Data transformation

Data platforms transform data, but only for use by a customer-focused system, such as CRM. Data warehouses support complex data processing, like filtering and aggregation. They are more suitable for preparing data for analytical and operational uses.

Data ingestion

Data platforms can ingest a variety of data types, including those without schemas, while data warehouses are built to ingest structured data with predefined schemas. 

Data handling

A data warehouse is designed to store bulk data, while a data platform is more of a data transit system. While data warehouses store data and can serve as a system of record, a modern customer data platform provides a continuous stream of data from customer touchpoints to business users.

Integration capabilities

A data platform offers connectors that allow you to integrate various operational and marketing systems, while you would need extensive development for integration in a data warehouse.

Data platform vs. data warehouse: Summary

Below, we summarize the key details of how a data platform and data warehouse differ.

How to choose between a data platform and a data warehouse

There are three main factors to consider when you decide which is suitable for your business: a data warehouse or a data platform. 

• Business needs: Do you require real-time insights or historical trend analysis? For instance, a fast-paced retail operation would benefit from a data platform for dynamic customer analysis.
• Volume and type of data: A data warehouse can handle structured data like accounting records, while a data platform can process videos, audio and a wider range of data types.
• Skillsets: Data platforms often cater to both IT professionals and self-service business users, while data warehouses are easier for finance and operations teams accustomed to standardized reporting.

Some examples. A bank that needs to report regulatory compliance may prioritize a data warehouse, while an e-commerce platform that aims to personalize customer experiences in real-time should choose a data platform. We have also seen many businesses combine both systems for maximum ROI, leveraging their strengths.

Benefits of combining data solutions

While both tools offer unique functionalities, hybrid approaches often yield the best results. By integrating a data platform with a data warehouse, businesses can achieve:

• Enhanced operations: You can use data platforms for real-time personalization while using a data warehouse for consistent BI reporting.
• Faster time-to-market: When combined, a data warehouse and data platform enable rapid insights and more optimized campaigns. It enables you to adjust strategies on the go, ensuring faster updates and product launches.
• Streamlined workflows: Unified data ecosystems eliminate silos, enhance collaboration and boost productivity with centralized, automated workflows.

Also, businesses that incorporate CDPs or data hubs are faster in rolling out campaigns. They also make better decisions, which increases business revenue.

Case studies

Industry Dive

Industry Dive’s data tools did not give them an adequate profile of their customers, making it difficult to track the individual customer journey.

They addressed the problem with Contentstack's real-time CDP, enabling them to personalize customer journeys and increase customer engagement by 40%.

"Our editors really see the value of Lytics. They’re using it every day to shape their editorial content." Robin Re said.

Read on to see how Industry Dive increased CTR by 40% after implementing a real-time CDP.

Land O'Lakes

Due to its struggle to create unique experiences for its various audiences, Land O’Lakes needed better data tools and chose Contentstack’s real-time customer data platform. The CDP harmonized its data, enabling it to create personalized content for each customer segment. This increased CTR by 29% and conversion rates by 38%.

Steve Rude said. "Impressions are the metric of a failed marketing campaign…If you’re not getting the conversions, it means you weren’t hitting the right audience. You may not reach a million people, but we’re going to reach the right people with the right message. And that’s where Lytics helps us."

Read more on how Land O’Lakes increased the conversion rate after CDP implementation.

FAQs

What is the key difference between a data platform and a data warehouse?

A data platform is designed for real-time analytics, while a data warehouse is more suitable for structured data storage and historical reporting.

Can a data platform replace a data warehouse?

No. A data platform does not do the same thing as a data warehouse. Hence, it should not replace a data warehouse.

How can businesses choose between a data warehouse and a data platform?

A business has to consider what kind of data it collects and how it wants to use that data. They must also consider data volume and the skill set of their team. A combined solution may offer better flexibility.

Are CDPs better than data lakes or data warehouses for customer data?

CDPs are designed for customer-centric real-time activation, while lakes focus on mass data storage and data warehouses on broader analytics.

Learn more

A data platform and a data warehouse are two data tools that cater to different and unique business needs. Data platforms are versatile. They support real-time analytics, while data warehouses are reliable for structured data reporting.

You may also take things further by combining these solutions within a cohesive infrastructure for better business outcomes.

Contentstack offers a real-time customer data platform that allows you to activate first-party customer data. It enables you to orchestrate customer journeys, segment audiences and activate data warehouses. Talk to us today to learn more.