Leveraging the Snowflake Data Cloud to Monetize Data

“Data is the new currency” might sound cliché, but it’s true in today’s digital world. This begs the question, if data is the new currency, why is it not currently recognized as a balance sheet asset or liability, like other intangible assets like patents, copyrights, or trademarks? Data and the information derived from it arguably meet the criteria of a balance sheet asset as defined by The International Financial Reporting Standards (IFRS) (i):

• Owned and controlled by an entity as a result of past events
• Exchangeable for cash
• Can generate economic benefits for that entity

So why isn’t it included on balance sheets? Most likely, it’s because organizations historically have struggled to understand and calculate the value their data represents and could generate if optimally managed and deployed. Additionally, traditional methods of deploying data have numerous daunting hurdles around data security, integration, and governance. Despite these challenges, organizations’ aspirations to monetize their data assets is on the rise. Gartner predicts that by 2026, over 50% of commercial organizations will have established initial efforts for formal data monetization (ii).

According to Gartner, the definition of data monetization is the process of using data to obtain quantifiable economic benefits. Internal methods include using data to make measurable business performance improvements and informed decisions. External methods include data sharing, offering information as a value-added component of an existing offering, or outright selling data.

Many organizations have been able to successfully leverage data internally and have invested in Snowflake and other tools to break down data siloes and build a centralized data source of truth to enable operational efficiencies and data-powered decision-making. By 2024, 75% of organizations will have established a centralized data and analytics center of excellence to support internal data monetization efforts. (iii)

External data monetization is currently less widely leveraged, likely due to technical challenges and increased risks. But like other intangible assets, the value of data increases the more it’s leveraged. Organizations understand that data and information add business value beyond operational and decision-making usage. A recent study by ResearchAndMarkets.com valued the data monetization market at $2.1 billion in 2020, and it is estimated to reach $15.4 billion by 2030 (iv).

Traditional data sharing and distribution methods often use File Transfer Protocol (FTP), cloud buckets, or Application Programming Interfaces (APIs). These methods all require moving the data from point A to point B. (See Figure 1) Yet this movement creates challenges, such as storage costs, ETL costs and effort, security vulnerabilities, service and support costs, latency, and volume limits.

Figure 1, Source: Snowflake

The Snowflake Data Marketplace is a central hub where Snowflake customers can securely and easily discover, access, and share live, ready-to-query data. The platform allows data providers to package and monetize their data, while data consumers can quickly find and access data sets that are relevant to their specific needs. As of January 31, 2023, there are 390 providers offering more than 1,800 live, ready-to-use data sets on the Marketplace.

The Snowflake Data Marketplace leverages its secure data-sharing technology, which addresses many of the challenges mentioned earlier. No data is moved or duplicated, which eliminates the need for ETL processes and time-consuming data integration processes. In addition, security and governance features, such as end-to-end encryption, are already built into it. By eliminating data movement and the need for time-consuming data integration processes, the Snowflake Data Marketplace fosters a more efficient and collaborative data ecosystem.

Figure 2, Source: Snowflake

While the Snowflake Data Marketplace solves many of the challenges of traditional data-sharing techniques, delivering a data product to external consumers requires well-thought-out operational processes, governance, and technology enablement.

Companies must extend data governance and stewardship processes to distinguish between internal and external data. New business rules may emerge when data is published externally – for example, a data quality threshold that was not important internally may become critical for external consumers. If not addressed, this can impact the value of the data product. Data product pricing needs to be considered and can be driven by data latency tiers (real-time, near time, batch) and data fidelity (summary data vs. detail).

When data publication business rules and operational procedures have been established, data is ready to be published to a data marketplace. Data marketplaces provide distribution capabilities that make it easy for data consumers to use data.

Data management and governance tools are not yet designed to easily distinguish between internal and external publication rules and associated operational procedures. CapTech’s data publication solutions help businesses solve these problems by orchestrating the stewardship, management, and business rules needed to deliver data sets from internal systems to a data marketplace.

Key readiness questions to consider before starting your data monetization journey:

The power of data isn’t from having it, but from activating it. Modern data-sharing methods present an unprecedented opportunity for businesses to generate new revenue streams through efficiently and securely sharing their data externally.