How do I know if I need a data warehouse or just a database?

A simple way to think about it:

• Use a database for running your application day to day.
• Use a data warehouse for analyzing lots of data across sources.

Choose a database if you need:

• Fast reads/writes for an app or website
• To store current operational data
• Frequent updates, inserts, deletes
• Low-latency transactions
• A system for things like users, orders, payments, inventory

Examples: PostgreSQL, MySQL, SQL Server, MongoDB

Choose a data warehouse if you need:

• Reporting and analytics
• Data from multiple systems combined together
• Historical trends and long-term storage
• Heavy queries over large datasets
• Dashboards, KPI tracking, BI tools, forecasting

Examples: Snowflake, BigQuery, Redshift, Azure Synapse

A quick rule of thumb

If the main question is:

• “What is happening right now in my product?” → database
• “What happened over time across the business?” → warehouse

Common signs you need a warehouse

You probably need one if:

• Your operational database is getting slow because of reporting queries
• You’re pulling data from several tools manually into spreadsheets
• You need trusted metrics like revenue, churn, conversion, LTV
• You need to analyze years of data without affecting the app

Common signs a database is enough

A database is enough if:

• You’re mainly building an app
• Reporting is small/simple
• Data volume is modest
• You don’t need complex historical analysis
• One system can handle both app and reporting without issues

Very common setup

Many teams use both:

• Database for the application
• Warehouse for analytics
• ETL/ELT tools to move data between them

If you want, I can also give you a decision checklist or help you decide based on your specific use case.