Over 1 million businesses will have monetized their data assets by 2030, and over 12 exabytes of data will be traded every day. Additionally, the data marketplace will turn into a new economy and will unlock a total worth of almost $3.6 trillion.
For most organizations, data and information are the most valuable assets. While companies can utilize their data to better their operations, it can also have tremendous value outside the company. Buyers can use data marketplaces to better their analytics and provide new services to their consumers, while sellers can monetise their data.
Data marketplaces are the new future and will provide immense value to businesses who chose to use it.
What is a Data Marketplace?
A data marketplace is an architecture that allows for data sharing and monetization. It is usually an online market where data may be bought and sold. It makes use of the power of relevant data to provide a variety of information from various sources to various markets.
Snowflake, a popular cloud data provider, describes a Data Marketplace as “An online transactional location or store that supports the buying and selling of data,”
This trend is being driven by the rising volume and diversity of big data either as first-party data (within an organization) or even third-party data like Google Analytics.
A data marketplace can also serve as an internal platform that aids in the optimization of corporate processes and the creation of new revenue streams by reducing costs.
Why are Data Marketplaces Important?
The need of data marketplaces is linked to the growth of Big Data. Organizations are beginning to see data as a valuable asset. Businesses are generating more data internally or gathering data from other sources through web scraping and other methods.
Some of this information is also useful to other businesses. Data marketplaces allow businesses to profit from their data (which is known as data monetization). Data monetization can be of considerable significance to the publishers as they find great opportunities to generate economic value from their target organizations.
In addition, increasing the number of choices available for buyers to purchase data supports high-quality data, competition, and fair pricing amongst vendors. If there were no markets, there would be no standard structure for smaller providers to share their data or find buyers.
How does a Data Marketplace work?
The entities or sellers must first provide their data streams to the system. Access to the submitted data streams will encrypted and anonymized on the marketplace. The data buyers use a contract or license to obtain the desired data stream they need. Finally, after the transaction is complete, the tokens are divided to the parties at agreed-upon rates.
This way, the enterprise data marketplace gives access to the worldwide network of data and helps to make profit from data.
Different Types of Data Marketplaces
There may be different types of marketplaces depending on what the buyer is able to provide and what the seller needs.
Personal data marketplace
This is where individuals make money by selling their data to these services. They can share information about their location, recreational preferences, online behaviour etc. Individuals can establish their own rate or price for their data and wait for a buyer. Another option is that they can take marketplace incentives such as gift cards or a sign-up payment when they choose to supply their datasets. Individuals who are willing to contribute their data will sign some sort of consent form hence making the marketplace compliant in terms of data privacy.
Sensor/IoT data marketplace
Selling data to third parties is one approach to profit from IoT data. Organizations can buy and sell real-time data received from IoT devices via a sensor or IoT data marketplace. Sensor data helps businesses better identify and understand consumer behaviour, increase revenue, and develop improved strategies when it comes to business operations and marketing.
B2B data marketplace
B2B Data Marketplaces consolidate and store company data from a variety of sources onto a single platform. They allow data consumers to gain access to a collection of pre-curated data from a variety of sources that may be utilized for marketing, sales, and business intelligence. In comparison to personal data marketplaces, more datasets are exchanged.
Benefits of Data Marketplaces
Data is sold in a specific format in a common marketplace data model. This helps the buyer make the data more relevant, customizable, and accessible. There are many benefits to data marketplaces, mainly:
- The data marketplace is ideal for analytic purposes. It allows users to run ads by selecting the ideal segments they want from the marketplace and then pushing them to conduct effective campaigns and track their results.
- Data marketplaces help in providing value back to a customers by using datasets that a business would have not otherwise obtained.
- The data marketplace can handle cleaning and formatting of data and datasets to make it ready for use.
- Data marketplace tools assist in the discovery and comparison of data based on its scope and quality.
- Data markets provide an economic model for broader access to data and additional revenue streams. Without data markets, it is difficult to publish and consume data in a secure and effective way.
Example of a Data Marketplace: The Snowflake Data Marketplace
Snowflake is a well-known Data Marketplace supplier. It’s a hidden gem within the Snowflake data platform,
The Snowflake Data Marketplace, like any other market, links buyers and sellers. The Data Marketplace is a catalogue where you may search for data sets and request access from the data supplier.
Some of the data sets are available for free. Subscriptions are required for other data sets. The Snowflake Data Marketplace is broken down into many areas, such as Business, Travel Marketing, and so on. This makes it easier for buyers to locate the datasets they need.
Once you find a dataset you want, you must agree to terms and conditions with the seller after requesting access to a data set. When this is completed, Once this is done, the provider of data will share out the data set and you can use it to enrich your in-house data.
Multi-sided marketplaces make it significantly easier, faster, and cheaper for customers to find what they need.
Industry analysts expect that in the coming years, decentralized data marketplaces will play an increasingly important role. As businesses naturally transition to an omnichannel environment, we will witness a deeper customisation of products and personalization of services.
The data marketplace size is sure to increase as the demands of data selling companies all over the world rise. Because of this, it will be quite beneficial to get in on the action while it’s gaining momentum and see how a data marketplace can enhance your businesses performance.
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Senior Technology Architect
Senior Technology Architect