With trends as IoT and increased connectivity, the availability of data is consistently increasing and its automated processing with, e.g., machine learning becomes more important. This is certainly true for the area of fault diagnostics and prognostics. However, for rare events like faults, the availability of meaningful data will stay inherently sparse making a pure data-driven approach more difficult. In this paper, the question when to use model-based, data-driven techniques, or a combined approach for fault diagnosis is discussed using real-world data of a permanent magnet synchronous machine. Key properties of the different approaches are discussed in a diagnosis context, performance quantified, and benefits of a combined approach are demonstrated.