What are Databases?

What exactly is a database?

A database is essentially a system for storing and organizing information, much like a more powerful and flexible version of a spreadsheet. While a spreadsheet is great for simple tasks like tracking expenses or creating lists, a database can handle much larger amounts of data and more complex relationships between that data.

For example, if you run a business, a database can manage everything from customer information and sales records to inventory and employee details, all in one place. Unlike spreadsheets, databases are designed to handle multiple users and can process large amounts of data quickly and efficiently, making them essential for growing businesses. SQL (often pronounced “sequel”) is the most common way developers interact with databases.

Example: Imagine we are running an e-commerce store that will have users and each user makes purchases. In the beginning, we might simply use a spreadsheet to track this information. But, eventually, Excel will slow down and it will be hard to track key metrics like our average order volume, the number of repeat customers, etc. What would this look like in SQL?

Here are actual images from a PostgresSQL database. Below we have our “users” table. Think of this as an Excel sheet that only maintains information on each unique user. That’s great, but now we need a second “spreadsheet” for our sales data.

SQL table: User data

Below, we have a table that tracks our sales information. The “user_id” column maps to the “user_id” column in our User table. Now, we can easily track key metrics and summarize our user and sales data.

SQL table: Sales data

Why Your Business Needs a Database

A database is crucial for your business because it allows you to keep your data organized, accessible, and secure in ways that spreadsheets simply can't match. For instance, in our "Users" and "Sales" tables, a database ensures that data is structured and linked efficiently, making it easy to run complex queries and generate insights without the risk of errors that can occur in spreadsheets. Unlike spreadsheets, databases can handle large amounts of data seamlessly, ensuring that your information is always available and up-to-date, even as your business grows. Additionally, databases provide built-in security features to protect sensitive information, so you can control who has access to your data and how it's used. This level of organization and security is essential for making informed business decisions and maintaining trust with your customers.

Different Types of Databases

When choosing a database for your business, it's important to understand the differences between relational databases and NoSQL (pronounced “no sequel”) databases. Relational databases, like the SQL tables you've seen, organize data into neatly structured rows and columns, making them perfect for handling well-defined data, such as customer information or sales records. However, not all data fits this structured format.

A good example could be a social media site. They might store information like below.

JSON data

Data that is nested like this is sometimes easier to maintain in it’s nested format. Technically, we could split this into tables for users, comments, and likes. But, from a coding perspective, it can be easier to send the nested data directly.

How to Choose the Right Database for Your Business

Like we’ve mentioned in other articles, it’s often best to choose one of the most popular and widespread tools to ensure you have easy access to great talent. Below, we can see PostgresSQL, is cited as the most preferred database in a survey by StackOverflow.

Database popularity

StackOverflow Survey 2023

For most businesses, any of the top 5 databases will solve most, if not all, of your needs. Let’s take this time to clarify some important details about databases. At a high level, there are two types of databases: SQL and NoSQL. However, within those two categories there can be different “flavors”. For example, MySQL has slight differences from PostgresSQL. For a business focused on driving revenue and gaining market share, we recommend not focusing too intensely on these differences.

Setting Up and Managing Your Database

Setting up and managing your database is critical to the success of your business. Cloud providers like AWS offer services like RDS (Relational Database Service), which simplify the setup process and automatically handle important tasks like backups, scaling, and patching. While these managed services can be a bit more expensive than setting up your own database, the added reliability and peace of mind are often worth the cost, especially considering how vital your database is to your operations. Ensuring regular backups and having a plan for scaling as your business grows are best practices that can help protect your data and keep your business running smoothly.

Executive Summary

A database is like a series of connected spreadsheets, but far more powerful, allowing businesses to keep their data organized, accessible, and secure. When deciding which type of database to use, it's important to consider the nature of your data—relational databases like PostgreSQL work well for structured data, while NoSQL databases are better suited for unstructured or complex data like JSON. Choosing the right database involves balancing factors like scalability, ease of use, and cost, with managed cloud services like AWS RDS offering additional benefits such as automatic backups and maintenance. Although these services may be more expensive, they provide the reliability and security crucial for supporting your business as it grows.