What is a Database Management System (DBMS) & Why is it Important?

Learn about database management systems, their types, applications, benefits, and how LumenData’s DBMS services can optimize your business data management.

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What is a Database Management System?

The database management system (DBMS) market size worldwide is 80 billion USD. As per Statista, the most popular database management system (DBMS) worldwide was Oracle, followed by MySQL and Microsoft SQL server at the second and third positions.

A database management system manages and organizes your data in a structured manner. Users can develop, modify, and query databases. Some of the most common database management systems include Microsoft SQL Server, Oracle Database, and PostgreSQL. A database management system has all the current, relevant information.

A database management system can be described as a computerized data-keeping system and all system users get facilities to conduct operations on the system.

There are three ways a database management system enables users:

Types of Database Management Systems

1. Relational Database Management Systems (RDMS)

Relational database management system (RDMS) stores your data in a table structure involving rows and columns. Column consists of the attribute that defines a data type, and row consists of a record that holds the value of that particular data type. 

RDMS defines how different data elements are related to each other. All information is structured with the help of primary and foreign keys.

Example of how RDMS works:

Let’s say you have a customer table and a customer complaint table. 

The customer table will have information such as customer ID, customer first name, customer last name, email address, phone number. Here the customer ID is the primary key and defines who the customer is in the relational database.

The customer complaint table will have information like complaint ID, customer ID, complaint date, complaint type, status of complaint. Here the complaint ID is the primary key. It identifies the specific customer complaint.

Both the tables are connected to each other based upon the shared customer ID. 

This means that you could use the two tables to generate an insightful report about all customers who filed the same complaint on a particular date.

2. Centralized Database Management Systems

In this type of database management system, all data and management processes are stored in a single server. If you have data volumes or user loads that are light to moderate, centralized DBMS is perfect for you. 

Users access the database via a network and all requests are processed by the central system. When users have centralized control, it becomes easier to implement security policies. IBM Db2 and Microsoft SQL Server are popular examples of centralized database systems.

3. Distributed Database Management Systems

Distributed database management systems have data spread across multiple physical locations or virtual servers. All data and processing tasks are distributed among interconnected nodes. 

Apache Cassandra and CockroachDB are top examples of distributed database management systems. These types of database management systems are perfect for global scale applications.

4. NoSQL DBMS

NoSQL stands for Not only SQL. NoSQL database management systems handle and store large sets of semi-structured and unstructured data. These are non-relational databases that store your data in a non-tabular format. They are built and optimized for specific data models like documents, graphs, key-value, wide columns, and in-memory databases. 

NoSQL database systems follow flexible schema and scale horizontally. One of the best parts about NoSQL is that it’s optimized for fast querying which means that database queries can provide more quick results. NoSQL databases can be used for building high-performing mobile and web applications, Internet of Things, gaming applications, and many other use cases.

5. Federated Database Management Systems

This database management system integrates various autonomous databases into a single, unified system. However, each database is independent and has its own schema, DBMS, and management policies. 

The best part about federated database management systems is that it facilitates local control while enabling cross-database queries. Apache Drill and Microsoft SQL Server are some examples of this type of DBMS.

6. NewSQL DBMS

These are modern, relational database systems that provide the best of both SQL and NoSQL databases. These database systems will provide you with scalable performance of NoSQL for OLTP (Online Transaction Processing) workloads and will also offer ACID (Atomicity, Consistency, Isolation, and Durability) compliance for transactions as provided in RDBMS. 

Top features of NewSQL database systems include in-memory capability and clustered database service offerings that can be deployed in the cloud. Some classic examples of NewSQL DBMS are Google Cloud Spanner, CockroachDB, NuoDB, and more.

7. In-Memory DBMS

In this database management system, you can store, manage, and manipulate data using the system’s main memory. With such databases, you are able to reduce the latency related to reading of disk that ultimately leads to faster response times. 

If you have an application that requires real-time analytics and high-speed transactions, you should opt for in-memory database management systems. Some popular examples of in-memory DBMS are SAP HANA and Redis.

8. Multi-model DBMS

Such database management systems allow you to use more than one database model. As per a Forrester Research Report published in 2021, a multi-model database system “provides storage, processing, and access to any data, whether structured, unstructured, or semi-structured, and supports multiple data models such as document, graph, relational, and key-value for applications and insights.” 

The types of databases handled by this system include documents, graphs, relations, and key-value data models. Some classic examples of multi-model DBMS are Oracle and MongoDB.

Database Management System Applications

Businesses across industries are using database management systems. Let’s look at some of the best applications of DBMS:

1. Banking: DBMS can easily track records of banking activities like bank transactions, deposits, newly created bank accounts, and others. Financial institutions other than banking can leverage DBMS to retrieve sensitive financial information.

2. Retail: With DBMS, retailers can track customer data, manage inventory, and optimize their supply chains. E-commerce companies can use DBMS to store and manage product, order, and order tracking details.

3. Manufacturing: There are different products manufactured by companies. The organizations can use DBMS to keep a tab on the details of these products such as total units of the product, product weight, discounted products, and more.

4. Education: Schools and universities can leverage DBMS to manage student data like attendance, academic logs, course details, results, and much more. It can also be used to manage tuition fees, payroll, and other essential financial expenses.

5. Healthcare: Healthcare institutions can use database management systems to manage patient data, medical records, and billing details. They can also be leveraged for medical research and analysis.

DBMS Benefits

Enhance Data Integrity

More than 80% of business operation leaders are of the view that data integration is critical to their ongoing business processes. Choosing a modern database management system for your company provides you with flexible integration options to standardize your data across multiple sources, enabling a 360-degree view of your entire data ecosystem. 

With the right DBMS, you can fulfill all data integrity requirements such as referential integrity, entity integrity, and domain integrity. It also helps you remove data duplicates, segment it appropriately, and enrich your datasets into custom workflows.

Scale with Confidence

According to a recent McKinsey survey, almost 82% of businesses spend one or more days per week resolving master data quality issues, and around 66% are conducting manual processes for data assessment and monitoring. Poor data quality and management negatively impacts the way your business scales. A database management system helps you address such issues. 

It offers a centralized data repository and helps solve challenges like siloed data that lead to time-consuming manual data consolidation efforts. Plus, it also enables automated data quality management with tools designed for tools for data validation, cleansing, and deduplication. 

Modern DBMS like Amazon Aurora, a cloud-native DBMS, scales dynamically, enabling you to handle high transaction loads, all while maintaining superior data quality and zero downtime.

Enable Improved Data Security

Did you know that around 66% of organizations were affected by ransomware in 2023? Also, according to IBM’s Cost of a Data Breach Report 2024, the global average cost of a data breach last year was $4.88 million USD. An efficient database management system helps you protect provides you with multiple top-notch data security features such as controlled access and sensitive data encryption. 

Cloud-based DBMS solutions like AWS RDS use AES-256 encryption to secure stored data and SSL/TLS encryption for data in transit. DBMS solutions also provide features that help businesses comply with data privacy laws like GDPR, HIPAA, or CCPA. For example: Oracle database system.

Facilitate Data Backup and Recovery

If you are worried about your data getting permanently lost in case of system failures or cyberattacks – fret not! Modern database management systems support regular automated backups and allow you to restore your data to a specific point in time. 

For instance, DBMS like Microsoft SQL Server or MySQL enable you to schedule daily or weekly automated backups. Another great example is Amazon Aurora that provides point-in-time recovery by replaying logs to restore the database to the exact time before a failure occurred.

Get the Best Database Management Services with LumenData

If you’ve been thinking about accelerating your database management project, you need to make sure that you implement the right strategy and technology to optimize business benefits. There are several database management tools in the market. But how do you know which one will best suit your unique requirements? 

LumenData has got this covered. We are partners with some of the top-notch database management platforms like Fivetran and can help you accelerate your project. Our best-of-breed database management services help you reduce technology deployment time by 2 months with 95% risk mitigation for reliable outcomes. 

LumenData has a multi-skilled delivery team experienced in Informatica MDM SaaS, Reltio, Snowflake, Databricks, AWS, and many more leading cloud-based data platforms. Get access to flexible, on-demand, and scheduled support to implement and optimize your database management strategy. 

Connect today to learn what practices and technologies will be beneficial for the data transformation of your business.

About LumenData:

LumenData is a leading provider of Enterprise Data Management, Cloud and Analytics solutions and helps businesses handle data silos, discover their potential, and prepare for end-to-end digital transformation. Founded in 2008, the company is headquartered in Santa Clara, California, with locations in India. 

With 150+ Technical and Functional Consultants, LumenData forms strong client partnerships to drive high-quality outcomes. Their work across multiple industries and with prestigious clients like Versant Health, Boston Consulting Group, FDA, Department of Labor, Kroger, Nissan, Autodesk, Bayer, Bausch & Lomb, Citibank, Credit Suisse, Cummins, Gilead, HP, Nintendo, PC Connection, Starbucks, University of Colorado, Weight Watchers, KAO, HealthEdge, Amylyx, Brinks, Clara Analytics, and Royal Caribbean Group, speaks to their capabilities. 

For media inquiries, please contact: marketing@lumendata.com.

Authors

Picture of Shalu Santvana
Shalu Santvana

Content Writer

Picture of Sai Bharadwaja
Sai Bharadwaja

Senior Consultant