Here the data is extracted directly from the Source for processing in the staging area, that’s why it’s called online extraction. During Extraction we connect directly to the source system and then access the source tables. There is no need of any external staging area
Here the data is not extracted directly from the source, but instead it’s taken from another external area which keeps the copy of source. The external area can be Flat files, or some dump files in a specific format. So when we need to process the data we can fetch the records from the external source instead of the actual source.