Let’s take a look at some pioneering DaaS companies, as well as some emerging data providers to watch out for.
Some companies offer DaaS as their primary service. They’re established data industry players who specialise in collecting, sourcing and selling data. Here’s some prominent data providers who treat DaaS as their main revenue stream.
However, in recent years, we’ve seen an increasing number of companies become DaaS companies by monetizing their proprietary data. Even if data isn’t the company’s core business, this offers a new source of revenue from assets - information - which would otherwise only be used minimally. Other disruptive companies include startups founded explicitly as DaaS companies. Having seen the Big Data demand explosion, these entrepreneurs have launched businesses selling external data.
This is one of the main reasons your company should be excited about DaaS. DaaS is democratic. Any company can start a DaaS business. Interested in how? Read on.
Any company with exhaust data can launch a DaaS business. In theory, it’s simple: you generate revenue from your company’s internal data. By monetizing proprietary data, your company helps meet growing global demand for external intelligence. You also add a net-new revenue stream using valuable exhaust data which would otherwise lie unused.
Of course, there’s more that goes into launching a successful DaaS business in practice. Whether you’re opening a sideline DaaS business or becoming a data provider from scratch, there’s a lot which goes into data monetization. Based on our experience working with external data providers, here are Datarade’s tips to starting a DaaS company:
McKinsey identifies ‘strategy’ as one of the most important elements to starting a DaaS business. Aside from the usual aspects of strategising a newly-launched business, there are data specific considerations you should make. For example, as the CEO of SafeGraph and LiveRamp points out, data is more valuable if you enable it to be joined with other datasets. By making your DaaS easy to integrate with other datasets and software, you open up your potential client base. Such considerations will boost your data demand - and ultimately the revenue you can generate from your data assets.
Like any entrepreneurial venture, you have to be committed to the business for it to flourish. This includes hiring the right talent, investing in the right work tools, and understanding your market. Ability to commit to a DaaS business depends on whether you’re founding a company from scratch or establishing a secondary business. Regardless, it’s essential to commit enough time and effort to get your DaaS business off the ground.
Aside from the usual steps in data preparation - validation, cleansing, aggregation - when starting a DaaS company, you should consider data security a crucial due diligence step. That is, there’s a chance your company is the victim of a DaaS breach. With commercial data carrying such a big price tag, DaaS is sometimes stolen by hackers or purchased and re-sold fraudulently. To anticipate such breaches, it’s sensible to watermark your data somehow - including keys, some identifiable data points, or even false data points if you suspect there’s already been a breach.
As discussed, it’s harder to apply a standardized pricing model to DaaS than it is to data-as-a-products. Generally speaking, DaaS is sold according on a subscription basis. There are some golden rules for pricing which apply to any DaaS business. Firstly, it’s sensible to offer samples, freemium services, and trial periods for your DaaS. From there you can build a base of PQLs - product qualified leads. Also reduces your customer acquisition costs (CAC) - satisfied buyers become recurrent subscribers.
As our CEO Thani explains, one of the most advantageous decisions any aspiring DaaS company can make is integrating in as many sales channels as possible. This is because the data buyer market is fragmented and nascent - which brings unpredictability. Increasing your presence across channels increases the chances of your data products being seen by high-intent leads.
The easiest way to establish an omni-channel presence for your DaaS company is to leverage a data commerce platform like Data Commerce Cloud™️ (DCC). DCC enables you to set up your storefront just once, then publish your DaaS offering across multiple sales channels including Datarade Marketplace and SAP Data Warehouse Cloud.
Still with us? Let’s have a look at probably the most important topics for data provider companies in Chapter 3: how the data-as-a-service business model works.