OLTP vs OLAP: Understanding the Key Differences

OLTP means Online Transaction Processing and OLAP means Online Analytical Processing.

OLTP (Online Transaction Processing)

OLTP databases supports the day to day transactions. It’s a scenario database for storing day to day sales, people coming in, logging in, buying thing, etc. kind of data.

Let’s imagine an Amazon order, and what all data is stored for an order. It has the user details, order details, what the user has purchased, shipping address, etc. This type of data falls under OLTP.

Log of what users ordered,
Log of what credit cards they’ve used,
All different types of things that supports day to day business.

Now, what do companies do with this data? They supports their analysis like trying to figure out what makes the customer tick, and this falls under OLAP.

OLAP (Online Analytical Processing)

Here, the companies take data from transactional processing (OLTP) and put it in a data warehouse and start doing all types of data analytical processing to figure out what is valuable in the data.

But why figure out what is so valuable in that data? Because data is the key, data is everything we work with, everything we do online, every interaction, every action we do is used somewhere, somehow to drive analytics that drives a company to make new (future) decisions, and those decisions then lead to new products, new markets, new interactions with their customers.

Scenarios to identify whether it's OLTP or OLAP:

A database is being used to log orders and customers - OLTP
A database is being used to figure out what new products a company should offer - OLAP
A database is being used to derive statistics for reporting to executives - OLAP
A database is being used to keep track of logged in users - OLTP

Outro

OLTP and OLAP serve different but equally important roles in data management, transactions vs. analytics. Understanding both sets the foundation for deeper database skills.

Up next, we’ll dive into SQL commands that powers the DBMS.