The coming years will see a massive business strategy change driven by a radical increase in data accessibility. Companies that leverage data marketplaces early on will be tomorrow’s giants.
An early signal of the economic forces data marketplaces bring can be seen in the emergence of Snowflake. Back in September, Snowflake debuted on the public market as the largest software IPO ever, and its performance continues to skyrocket. Some view this as a dark horse, but in reality, this massive dollar amount understates the impact foreshadowed by this record-setting financial debut.
With Snowflake’s debut, the data warehouse, which for decades was little more than a repository for retaining a static record of valuable information, steps into the spotlight as the heart of the digital enterprise. Snowflake’s Secure Data Sharing (SDS) offering put the company in a position to soar past giants like Amazon in the data warehouse business. Snowflake makes it easy to integrate data across every silo in a business as well as across a network of ecosystem partners. Essentially, the company pioneered a data marketplace where customers can access data offered by numerous providers. (In fact, Snowflake announced on Monday that it has added thousands of new datasets to the marketplace through a partnership with Knoema and that its venture arm has invested in Knoema to accelerate the delivery of further data sets.)
Snowflake’s Data Marketplace represents a new wave of digital innovation, one that welds together the global virtual economy in a manner similar to that of global supply chains. And just like with most other massive innovations, I predict we will see dramatic consequences.
As businesses shift to a virtual model, where every stage of the customer experience is delivered and governed digitally, real-time integration and deployment of data to support the customer experience is now the norm for enterprises. In the process, data moves beyond its traditional role of driving executive decision-making, evolving into the lifeblood of operations. But so much of the data that enables optimal experiences is not accessible to companies simply as a byproduct of their customer interactions. Businesses need to tap into data streams beyond their own.
Traditionally, barriers associated with leveraging externally-sourced data have limited its use. New data sources must be found, evaluated, delivered, cleaned, reformatted, integrated, de-bugged, etc. For decades, IT shops have struggled with this process, known as ETL (extract-transform-load) — three letters that translate to time-money-risk. As a result, even the largest companies typically limit their data suppliers to a handful of proven providers.
A marketplace changes every parameter in the equation of data adoption — it democratizes data access, simplifies discovery, evaluation, and ingestion of data, and ultimately helps make data-driven operations possible for a much broader range of businesses.
The emergence of cloud-based infrastructure providers makes this democratization possible. Additionally, marketplaces simplify the exploration and adoption of new data sets, because they quickly deliver comprehensive collections ready to integrate into applications where they are built and operated. Of equal importance, platforms like Snowflake — along with AWS, Google, Azure and lesser-known specialists — bring together communities of technologists, for whom these platforms serve as their workbenches. By connecting these communities and allowing them to share powerful datasets, the new wave of innovation will continue at an exponential rate.
A quick tour of Snowflake’s Data Marketplace shows that leading brands in the data industry are already displaying their wares. Behind this storefront, data is beginning to flow. Additionally, the AWS Data Marketplace demonstrates how easy it is to speed up data adoption, since AWS has taken an approach that facilitates browsing and sampling. Data providers are encouraged to deploy free-standing extracts of their data, chosen to meet a particular need, with descriptions, pricing, and contracts all available for inspection. It’s the data equivalent of street food.
Notably, some of the hottest selling data “dishes” are built to address the unique challenges of COVID. The pandemic dramatically altered consumer behavior and drove high demand for insights that help brands affirm or adjust existing engagement strategies. It also sped up numerous digital adoption curves, shifting perceptions and creating new channels. This further supports the idea that we will see rapid external data adoption and data marketplace growth.
From where we sit, it’s clear the marketplace is already spreading beyond the walls of the major infrastructure players. A week doesn’t go by without
companies with data receiving inbound inquiries from a new data marketplace, or from an existing customer or partner who is opening one. Examples include Neustar, mParticle, Narrative, and Nitrogen.ai. It seems possible that making additional relevant data available within an application may become a new requirement for technology platform success.
It’s fair to say data accessibility is only beginning to be appreciated by potential buyers and sellers. The current menu of options reminds me of early-era search engines when human editors posted thousands of links to interesting content organized by topic. The interface will evolve, and the suppliers of data will refine their offerings as demand expands. Data marketplaces will open up access to now dormant datasets, and help drive a diverse and lucrative revenue stream that businesses have yet to discover.
By its example, Snowflake is signaling the rise of data marketplaces, which I believe will enable massive change in how businesses operate in the next decade.
Michael Gorman is SVP of Product Development and Marketing at ShareThis.