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[OLAP](https://en.wikipedia.org/wiki/Online_analytical_processing) stands for Online Analytical Processing. It is a broad term that can be looked at from two perspectives: technical and business. At the highest level, you can just read these words backward:
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**Processing**some source data is processed…
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**Processing**— Some source data is processed…
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**Analytical** …to produce some analytical reports and insights…
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**Analytical**— …to produce some analytical reports and insights…
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**Online** …in real-time.
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**Online**— …in real-time.
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## OLAP from the business perspective {#olap-from-the-business-perspective}
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In recent years business people started to realize the value of data. Companies who make their decisions blindly more often than not fail to keep up with the competition. The data-driven approach of successful companies forces them to collect all data that might be even remotely useful for making business decisions, and imposes on them a need for mechanisms which allow them to analyze this data in a timely manner. Here's where OLAP database management systems (DBMS) come in.
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In recent years business people have started to realize the value of data. Companies who make their decisions blindly more often than not fail to keep up with the competition. The data-driven approach of successful companies forces them to collect all data that might be even remotely useful for making business decisions, and imposes on them a need for mechanisms which allow them to analyze this data in a timely manner. Here's where OLAP database management systems (DBMS) come in.
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In a business sense, OLAP allows companies to continuously plan, analyze, and report operational activities, thus maximizing efficiency, reducing expenses, and ultimately conquering the market share. It could be done either in an in-house system or outsourced to SaaS providers like web/mobile analytics services, CRM services, etc. OLAP is the technology behind many BI applications (Business Intelligence).
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In a business sense, OLAP allows companies to continuously plan, analyze, and report operational activities, thus maximizing efficiency, reducing expenses, and ultimately conquering the market share. It could be done either in an in-house system or outsourced to SaaS providers like web/mobile analytics services, CRM services, etc. OLAP is the technology behind many BI (business intelligence) applications.
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ClickHouse is an OLAP database management system that is pretty often used as a backend for those SaaS solutions for analyzing domain-specific data. However, some businesses are still reluctant to share their data with third-party providers and so an in-house data warehouse scenario is also viable.
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The fundamental trade-off between OLAP and OLTP systems remains:
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- To build analytical reports efficiently it's crucial to be able to read columns separately, thus most OLAP databases are [columnar](https://clickhouse.com/engineering-resources/what-is-columnar-database),
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- To build analytical reports efficiently it's crucial to be able to read columns separately, thus most OLAP databases are [columnar](https://clickhouse.com/engineering-resources/what-is-columnar-database);
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- While storing columns separately increases costs of operations on rows, like append or in-place modification, proportionally to the number of columns (which can be huge if the systems try to collect all details of an event just in case). Thus, most OLTP systems store data arranged by rows.
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