In Decentralized Database, a big database is partitioned as per business requirement in such a way that each smaller database represents a specific data subject. 

Today, it is a fact that most business organizations from small to medium sized to large multinational corporations, can hardly go into operation without having to rely on information. The term "data-driven" has already been in wide use and has become all too real in cutting edge business operations.

With the fast advancement in information technology, database management systems are becoming more and more advanced more many very specific database software solutions are coming into the market. In the past, it was common to have a central database to serve all of the organizations needs.

Many information system designers and architects have been holding the belief that a central control is better for database management. From this standpoint, they saw that a centralized server handling all data in one logical and physical system is good in the aspect of data integrity and less expensive in the aspect of economic due to the cost associated with redundant systems.

But because of the coming out of more advance hardware that are relatively cheaper in price when the issue of speed and efficiency is accounted for, decentralized database has become a better choice.

From the standpoint of practicality in today’s business setting, a decentralized database offer more speed and flexibility. Business organizations already involve a lot or processes such as wholesale distribution, discrete manufacturing, retail, and professional services operations, financials, human resource and many more. Each of these business aspects produces their own high volumes of data.

If all of the data output from these areas are being handled by one central database, the possibility of failure is potentially high. And when a failure occurs, the business process would definitely stop. When there is stopping, no matter how long the period, it could mean loss in revenue and income for the company.

Decentralizing the database by partitioning it according to a business or end-user defined subject area and having the ownership moved to the owners of the subject area can solve the problem of database failure and business stoppage.

When the database is decentralized, the each of the database partition can already be managed by a specific user or group. For instance, one database may be managed by the financial group, another administrative group, and then the rest of the partitions by the sales, human resource, customer relationships, procurement, manufacturing departments and so on depending on the set up of the company.

With this kind of setting, data integrity may be maintain more securely because there will be a better sense of responsibility by each of the department. If something goes wrong, it could be very easy to pinpoint which department caused the problem and specific persons or group can take the responsibility.

The decentralized database could also significantly boost the access and processing speed of the whole system. In a centralized database setup, when one data consumer wants to view a particular for, say, sales report, the database will have to scan through the whole central database and this could mean slowing of the whole system. With a decentralized database, the whole system can immediately lead the data consumer’s query to the specific department where the sale report is being stored.

Finally, with a decentralized database, there can be no reason why the whole system will go done or fail and business temporarily halted because all the data are scattered across different departments within the organization. This means lesser potential for revenue loss.