What is the difference between OLTP and OLAP in relational databases?

OLTP (Online Transactional Processing) and OLAP (Online Analytical Processing) are two distinct approaches to designing and using relational databases, each optimized for different types of workloads. OLTP systems are built to handle frequent, short-lived transactions that involve inserting, updating, or deleting small amounts of data in real time. These systems prioritize speed, accuracy, and concurrency for day-to-day operations, such as processing orders or updating inventory. OLAP systems, on the other hand, are designed for complex queries that analyze large volumes of historical data to identify trends or generate reports. They focus on read-heavy operations and aggregate data from multiple sources to support decision-making.

The structural differences between OLTP and OLAP databases reflect their purposes. OLTP databases typically use a normalized schema to minimize redundancy and ensure data consistency. For example, a customer order system might split data into tables like Orders, Products, and Customers, linked by foreign keys to avoid duplication. This design allows efficient writes but can complicate analytical queries that join many tables. OLAP databases often use denormalized schemas like star or snowflake schemas, where a central fact table (e.g., Sales) connects to dimension tables (e.g., Time, Product, Location). This structure simplifies querying across dimensions and speeds up aggregations, such as calculating quarterly sales by region. OLAP systems may also use columnar storage, which optimizes read performance for analytical workloads.

Examples illustrate these differences. An OLTP system might handle thousands of transactions per second for a banking app, ensuring atomic updates to account balances while enforcing ACID compliance. In contrast, an OLAP system could process a query like “What was the average revenue per product category in Q3 2023?” by scanning millions of rows across years of sales data. Tools like PostgreSQL can support both workloads, but OLAP often involves data warehouses (e.g., Amazon Redshift) that consolidate data from multiple OLTP sources. Developers working with OLTP focus on transaction isolation and indexing for fast CRUD operations, while OLAP work involves optimizing query performance through partitioning, materialized views, or precomputed aggregates. Understanding these distinctions helps in choosing the right approach for a given use case.