Term · Custom software
Database
A database is an organised collection of data. Software can search, add and update it, even when many people are working at the same time.
In short
A database is an organised store of data, such as customers, orders and products, that software can look up and update. Unlike a spreadsheet, a database enforces rules: each piece of data is in one place, and many people can work with it at the same time.
What is a database?
A database is an organised collection of data that software can look up, add to and update. Almost every software package has one behind the scenes: your accounting software, your CRM and your webshop.
Most databases work with tables: a table for customers, one for orders, one for products. The tables are linked to each other. An order, for example, belongs to one customer.
How does a database work?
You usually do not work directly in the database. You use a program or app, and that reads and writes the data. The database enforces the rules. For example: an order must belong to a customer, and a date field contains a date.
Because each piece of data is in one place, you change an address once. Every screen and every overview then shows the new address.
Database or Excel?
A spreadsheet such as Excel looks like a database: rows and columns too. The difference is in the rules. In a spreadsheet you can type anything anywhere. That way the same customer ends up in it twice, with two spellings. And if several people work in copies, you do not know which version is correct.
A spreadsheet also has a limit: Excel can handle 1,048,576 rows per worksheet. Usually you lose the overview long before you reach that limit.
Example in an SME
Made-up example
A company keeps track of maintenance contracts in a spreadsheet, with one tab per year. A small app with a database puts customers, contracts and visits in one place. An overview of the contracts expiring this month can then be retrieved quickly.
When do you need a database?
A database comes into the picture when several people work in the same list at the same time, when data is linked, or when you search and filter often. You then build a simple app around it: custom software. With the same data you can then fill a dashboard.
Does this sound familiar? Read Your Excel lists have got out of hand, or see what I build under custom software.
Frequently asked questions
Who owns the data in a database?
You set that out in the agreements. With a package, it is in the supplier's terms and conditions. With custom software, you agree it yourself. In both cases, make sure you can export the data.
Do you need to make backups of a database?
Yes. Agree who does it and how often, and test whether you can restore a backup. You can read more about this under backup.
Source for the number of rows: Microsoft: Excel specifications and limits (in English). Consulted on 7 October 2026.
Written by Bart van Engelenhoven Founder of Uniekaiconsultancy in Ede, the Netherlands. Bart analyses how SMEs work and builds software, integrations and AI applications himself. Last updated: 7 October 2026
Read more
Term
Custom software
What is custom software? Software built for one business, around how that business works. Explanation, example and when a package is enough.
Read moreTerm
Dashboard
What is a dashboard? One screen with your business's key figures, from your own systems. Explanation in plain language, with an example and tips.
Read moreTerm
Backup
A backup is a spare copy of your business data. What do you include, how does the 3-2-1 rule work and why do you test restoring it?
Read moreNext step
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