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Well, start with the fact you probably have lots of data in a database somewhere. You now want to make sense of that data and actually "figure stuff out" based on information in the database. You can use Reports (and reporting tools) to answer more general, every day questions like "What are my sales in the South East region" or "How many widgets do I still have in inventory". Some examples of reporting tools come from Microsoft (SQL Reporting Services) and Cognos. However, what if your sales in the South East stink? You probably want to figure out why. Reports generally don't give you the completely ability to start "drilling down" into the details of your data to figure out they "why" - they only give you the "what". So, you use Analytical tools to really explore and look at data dynamically to figure out the "why". Examples of an Analytical Service is Microsoft's SQL Analysis serices - it is the thing that puts all your data together into a format tools can read. Examples of tools are ProClarity's "Desktop Professional", and others. Generally most companies do reporting first, then realize then need analytics, too.

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