In today’s data-driven world, many businesses use a real-time data warehouse for their analytics and business intelligence (BI) needs. This enables them to make better decisions, drive growth, and provide value to their customers.
A data warehouse is a data storage and management system designed with one objective: to manage and analyze data for business intelligence purposes. A real-time data warehouse takes this up a notch by enabling the storage of real-time data and allowing you to analyze it nearly instantaneously.
In this article, we’ll dive into what real-time data warehouses are, their architecture, and how they’re different from regular data warehouses. We’ll also talk about the best use cases of real-time data warehouses and discuss why your business might need one.
By the end of this article, you’ll have a good understanding of real-time data warehouses, their benefits, and the best practices you should follow to get the most out of real-time data warehouses.
Let’s get started.
What Is A Data Warehouse?
Let’s start with the basics and talk about data warehouses. Think of it as a giant attic where you can keep all your valuable data. But instead of just storing stuff, a data warehouse is designed to help you make sense of all that data.
In technical terms, a data warehouse is an information system that is used to store and organize data from multiple sources to gain useful business insights. It is the heart of any large-scale analytics or BI project.
Traditional databases, like MySQL and MongoDB, are great for day-to-day operations. But when it comes to analyzing large amounts of data, these systems can get pretty slow and inefficient. That’s where a data warehouse comes in.
Data warehouses are designed for analysis, not transactions. They do it efficiently by transforming data into useful information that is readily available to users. It’s separate from a company’s operational database and allows access to current and historical data which can be used for decision making.
When it comes to data analytics, a data warehouse is a real time saver and performance booster, reducing response time and enhancing query performance.
A data warehouse can have various architectures but the most common is a three-tier architecture, which consists of a Bottom Tier (data storage), a Middle Tier (Online Analytical Processing or OLAP server), and a Top Tier (front-end client layer).
In this architecture, the Bottom Tier stores the cleaned and transformed data while the Middle Tier presents an abstract view of the database to the end-user. The Top Tier provides access to the data through tools such as query tools, reporting tools, and analysis tools.
Data warehouses are often subject-oriented and can analyze data about a specific subject. They bring consistency to different data types from different sources and the data is stable and unchanging. They’re also time-variant, examining changes over time.
In a nutshell, an efficient data warehouse provides fast query times, large data throughput, and the option to transform the data to gain different insights.
What Is A Real-Time Data Warehouse?
Real-time data warehouses (RTDWs) allow you to process data in real time, giving you quick insights into your business operations. You can have access to the most up-to-date information right at your fingertips. No more waiting for batch processing or dealing with outdated information.
With real-time data warehousing, you can stay on top of your business and make informed decisions quickly. The secret to this fast processing is the use of real-time data pipelines. There are many open-source and managed solutions to set up your real-time data pipeline. If you are looking for a scalable, no-code solution, Estuary provides GUI-based tools to set up your real-time data pipelines in no time.
These pipelines quickly and efficiently transfer data from various sources into your data warehouse, giving you access to all of your data in one centralized place. An RTDW then processes this data quickly and allows you to make informed decisions based on accurate and up-to-date information.
Although an RTDW has a lot in common with traditional data warehouses, the scale of data ingestion and processing is different. The data arrives in the warehouse faster and is transformed immediately upon arrival to make querying more efficient
The queries run at a faster speed as well. If the data has errors that need to be corrected, these need to be carried out instantaneously before saving the data.
In a nutshell, real-time data warehousing is efficient and fast and allows you to stay ahead of the game. Although this type of data warehousing can be hard to maintain, with the right capabilities, it can be done efficiently.
Real-Time Data Warehouse Vs Traditional Data Warehouse
Traditional data warehouses and real-time data warehouses may sound similar but they have some key differences.
Traditional data warehouses store and integrate all historical data of an organization. This data is then used for making business decisions.
Although a traditional data warehouse presents a consolidated view of the organization’s data which might have been gathered from multiple sources, any analysis based on the data presents a picture of the past which could be days, weeks, or even months old when the data was loaded.
Real-time data warehouses take this a step further. In addition to providing all your historical data, RTDWs accommodate the ever-increasing need for timely data.
The data in a real-time data warehouse is refreshed continuously, providing a much more accurate picture of the organization’s current state when the data is analyzed.
As a result, businesses can respond rapidly to emerging information and make better strategic and tactical decisions based on the freshest data.
When comparing traditional and real-time data warehouses, some key differences include:
- Traditional data warehouses only store data periodically while real-time data warehouses store data in real-time.
- Traditional data warehouses can accept daily, monthly, or weekly data concurrency while real-time data warehouses only accept recent data that is available in minutes without requiring extensive alterations to the loading process or data model.
- Traditional data warehouses can only be used for long-term decisions while real-time data warehouses can be used for both long- and short-term decision-making.
- Since the data in a real-time data warehouse is fresher than in a traditional data warehouse, it is easier to correlate the data with the results of business decisions.
- Real-time data warehousing requires continuous updates without shutting down the data warehouse. This is generally not needed in a traditional warehouse.
Now that we understand the difference between traditional and real-time data warehouses, let’s take a closer look at the architecture of a real-time data warehouse.
Real-Time Data Warehouse Architecture
The field of data warehousing has advanced significantly since the introduction of traditional data warehouses. The rise of big data and the growing demand for real-time data analysis have led to the development of the real-time data warehouse (RTDW). RTDWs are designed to provide real-time insights and analysis through the capture, storage, and processing of large amounts of data in real-time.
Let’s examine the essential components and technologies involved in the architecture of a real-time data warehouse.
A. Key Components Of Real-Time Data Warehouse Architecture
In this section, we discuss the key components and technologies used in an RTDW.
- Data Ingestion: The first stage in the RTDW process is data ingestion. This involves obtaining data from various sources such as IoT devices, database systems, and weblogs. The collected data is stored in a staging area before it is processed and loaded into the data warehouse.
- Data Processing: The next step is data processing which involves transforming raw data into a structured format suitable for analysis. This involves cleaning, transforming, and enriching the data.
- Data Storage: After processing, the data is stored in a data warehouse. RTDWs typically use a columnar data storage architecture which allows for fast and efficient querying of large amounts of data.
- Data Visualization: The final step is data visualization which involves presenting the data in a meaningful way for stakeholders. This includes creating charts, graphs, and dashboards to provide real-time insights and analysis.
B. Technologies Used In Real-Time Data Warehouse Architecture
If you’ve decided you need a real-time data warehouse, there are three approaches you can take to get one:
1 — Purchase a real-time data warehouse solution. Today, there are many cloud-based platforms that provide fully functional RTDWs out of the box. These include Materialize, Rockset, Firebolt, and others.
These solutions offer built-in real-time analytics tools and their own set of real-time data integrations for specific data sources. When you choose one, make sure it will connect to the other data storage systems and tools you use.
2 — Upgrade a traditional cloud data warehouse with a streaming pipeline. A streaming pipeline can turn a traditional cloud data warehouse into an RTDW by ingesting and transforming data in real time.
For the warehouse itself, Snowflake and BigQuery are great choices. For the streaming pipeline, choose a tool that’s flexible and supports all your data sources. You can use a GUI-based platform like Estuary Flow or build your own pipeline with Apache Kafka.
3 — Build your own. This is the most complex option but can be a good choice for teams of data engineers who want extra customizability.
To build your own real-time data warehouse, at a minimum you’ll need these key technologies in the architecture:
- Columnar Databases: RTDWs typically use columnar databases which are optimized for fast querying and analysis of large amounts of data. Examples include Apache Paquet and Apache Cassandra.
- Data Streaming Platforms: RTDWs need streaming data platforms such as Apache Kafka and Estuary Flow, to ingest and process data in real-time.
- In-Memory Databases: In-memory databases are used to store data in memory which allows for fast querying and analysis of data. Examples include SAP HANA and Oracle TimesTen.
- Real-Time Data Processing Frameworks: RTDWs also use real-time data processing frameworks such as Apache Spark, to process and analyze large amounts of data in real-time.
Let’s delve into the advantages of using real-time data warehouses and understand how they bring benefits to businesses and organizations.
9 Proven Benefits Of Real-Time Data Warehouse
From quick and efficient decision-making to improved data access and personalization, real-time data warehousing truly revolutionizes the way organizations approach data analysis and management.
Let’s dive in.
I. Quicker Decision-Making
With real-time data warehousing, businesses have access to up-to-date information from various sources. This allows them to make decisions faster and in a more agile manner.
II. Improved Data Access
In real-time data warehousing, everyone in the organization has access to current and historical data, leading to better-informed decisions and optimized initiatives.
III. Personalized Customer Experiences
With the foundation for advanced real-time analytics and machine learning, real-time data warehousing enables companies to offer personalized customer experiences, resulting in increased satisfaction and growth.
IV. Reduced Load On Data Source
Real-time data warehousing reduces the load on the data source and eliminates the need for an identified data loading window, making it easier to maintain accuracy and consistency.
V. Faster Recovery
In the event of data conversion or load issues, real-time data warehousing allows for a quicker recovery process.
VI. Consistent Data
By removing the batch window and running hierarchies in databases, real-time data warehousing prevents inconsistent data from being reflected in queries and provides a more robust data warehousing experience.
VII. Improved Data Accuracy
Real-time data warehouses also help organizations improve the accuracy of their data. This is because they allow organizations to process and analyze data as soon as it becomes available, reducing the possibility of errors. By having accurate data, organizations can make informed decisions and avoid making costly mistakes.
VIII. Better Collaboration
Real-time data warehouses also promote better collaboration among team members. By having access to real-time data, team members can work together more effectively, share insights and make informed decisions. This improves overall efficiency and helps organizations achieve their goals more quickly.
Real-time data warehouses are also highly scalable which allows organizations to easily add new data sources and expand their data storage capacity. This is important for businesses and organizations that are experiencing rapid growth and require a flexible and scalable data solution.
8 Best Practices For Real-Time Data Warehouse
When it comes to setting up real-time data warehouses, it’s important to get it right to enjoy the benefits. Here are some best practices to keep in mind:
1. Test Before You Invest
Don’t just dive in headfirst with your real-time data integration. Take the time to run simulations and tests to ensure your algorithm is solid. You don’t want to end up like Knight Capital and suffer big losses.
2. Get Creative With Your Analytics
Real-time data is not just about speed. Real-time data opens up new opportunities to generate new insights from your data. Use it to create new value.
3. Parallel Processing
High-volume real-time data can put your servers under a lot of stress. It’s important to use multiple parallel engines for processing. You can start with any open-source or proprietary platform for efficient processing.
4. Have Contingency Plans
Component failures happen and they can lead to data loss and system outages. To minimize these failures, try to have contingency plans ready.
5. No Alternative To Good Data Engineering
This one seems pretty obvious but it is important. Always design your data streams to improve the efficiency of your analytics. This will lead to better decision-making.
6. Move To The Cloud
Real-time data processing requires significant resources. Take advantage of cloud data warehouses to scale your data processing up or down while keeping costs in mind.
7. Keep It Safe
With sensitive real-time data, it’s essential to have proper data security measures in place. Implement appropriate security measures to protect sensitive data including encryption, firewalls, and access controls. Regular security audits should also be performed to ensure that the real-time data warehouse remains secure.
8. Plan For Disaster Recovery
It’s essential to have a disaster recovery plan in place for the real-time data warehouse. This includes regularly backing up data and having a plan for restoring data in the event of a disaster. Regular disaster recovery drills should also be performed to ensure that the plan is effective.
Now that we understand the benefits and best practices, let’s look at some of the amazing ways that real-time data is used in different industries.
Applications Of Real-Time Data Warehouses
Let’s explore some of the most common applications of real-time data warehouses.
- Financial Services: Real-time data warehouse is utilized in the financial services sector for detecting fraudulent activities and stopping transactions accordingly.
- eCommerce & Retail: Real-time data warehouse is applied in point-of-sale systems for cross-selling and up-selling of products and services. It also facilitates the prediction of customer behavior and targeted marketing efforts.
- Delivery & Logistics: Real-time data warehouse is employed in delivery and logistics operations to support route planning.
- Personalized Customer Experiences: Real-time data warehouse is utilized to provide personalized customer experiences in eCommerce, retail, and B2B marketing.
- Security Analytics: Real-time data warehouse is employed in security analytics to detect and respond to potential threats in real time.
- Supply Chain Optimization: Real-time data warehouse is utilized in supply chain management to increase operational efficiency.
- Food Delivery: Real-time data warehouse is needed to provide order status updates to customers to give them current information on their food delivery.
- Customer Relationship Management (CRM): Real-time data warehouses can be used to support customer relationship management by providing real-time insights into customer behavior and interactions. This enables businesses to quickly respond to customer needs, improve customer satisfaction, and increase loyalty.
Real-time data warehouses are an innovative technology that enables organizations to quickly and effectively process and analyze vast amounts of data in near real-time. The growth of real-time data warehousing is a reflection of the increasing importance of data in today’s business environment.
As organizations seek to leverage data to drive business success, real-time data warehouses are becoming an essential tool for enabling quick and accurate access to large amounts of data. By following best practices and leveraging the right technologies, organizations can maximize the benefits of real-time data warehousing and improve their ability to make informed and effective decisions.
Excited to dive into the world of real-time data warehouses? To get started, you’ll want to invest in a top-notch real-time data ingestion pipeline. Flow by Estuary is an excellent option to consider. Not only does it provide a no-code solution for building your real-time data pipelines, but it’s also specifically designed for creating real-time data warehouses. Try it free now.