How Businesses Monetize Data on Cloud: Strategies and Best Practices

Step into a world where data is not just numbers but possibilities waiting to be explored. Picture this: by 2025, the global data sphere is predicted to burst at 175 zettabytes, according to IDC. Now, imagine the potential tucked within that sea of information.

It’s not merely about processing numbers; it’s about unlocking value– McKinsey’s insights reveal that those organizations which monetize data finds a way to an additional 20% in company’s revenue. It is not just about crunching numbers. It is about unlocking value.

And guess what? You are not alone in this journey. According to McKinsey, 41% of companies are monetizing data, and most of those companies started doing so in the past two years. They are seeing the treasure trove that data can be.

That is why we are pulling back the curtain on the magic of data monetization using the cloud.

Let us start with understanding data monetization!

What is Data Monetization?

Data monetization is the process of turning data into a valuable asset used to generate revenue and drive business growth. With the rise of cloud data platforms, businesses can now easily collect, store, and analyze data to gain insights for improved decision-making, optimize operations, and identify new opportunities.

There are two main types of data monetization: external and internal.

External data monetization involves sharing data with external partners, customers, or third-party organizations.

Internal data monetization focuses on utilizing data assets within the organization.

Here are some ways businesses can monetize their data:

• Sell data to third-party organizations.For example, a retail store could sell data on its customers’ purchase history to a marketing company.
• License data to third-party organizations.For example, a healthcare organization could license data from its patients’ medical records to a research institute.
• Provide data as a service. For example, a weather forecasting company could provide data on upcoming weather conditions to businesses that need to plan their operations accordingly.
• Use data to improve customer experience.For example, a streaming service could use data on users’ viewing habits to recommend new movies and TV shows customers enjoy.
• Use data to optimize operations.For example, a manufacturer could use data on its production process to identify areas where it can improve efficiency.
• Use data to make better decisions. For example, a financial institution could use data on its customers’ spending habits to make more informed lending decisions.

Now that we have the data monetization concept, let us know its benefits for organizations.

Data Monetization for organizations -The benefits & success stories

There are many benefits to data monetization, including:

• Increased revenue:Businesses can generate new revenue streams by selling their data to third-party organizations or using it to create new products or services.
• Reduced costs: Data monetization can help businesses reduce costs by improving operational efficiency, making better decisions, and identifying new opportunities.
• Improved decision-making: Data is used to gaining insights into customer behavior, market trends, and other factors that can help businesses to make better decisions.
• Enhanced customer experience:Data is used to improve the customer experience by personalizing products and services, providing targeted recommendations, and resolving issues more quickly.
• Competitive advantage:Businesses that can effectively monetize their data can gain a competitive advantage by better understanding their customers, predicting demand, and optimizing their operations.

Here are some success stories of businesses that have benefited from data monetization with Hexaware:

1. Hexaware collaborated with one of the leading MNCs operating in the health information technology and clinical research industryto create the Human Data Sciences Cloud, powered by Snowflake, by consolidating data from numerous sources globally. This initiative reduced manual data efforts by 75%, lowered costs by 60%, and accelerated analytics delivery by 80%. It also played a crucial role in expediting the delivery of three COVID-19 vaccines.

2. Hexaware assisted a mining company in migrating from Teradata and Hortonworks to Snowflake, enabling real-time insights powered by AI/ML. The project was completed in half the projected time, resulting in a 4x improvement in reporting performance, a 50% reduction in TCO, and significant operational benefits such as reduced fuel costs and improved equipment uptime.

3. Hexaware delivered the Corporate Data Exchange on Snowflake for a leading stock exchange firm in the UK, migrating legacy finance data and consolidating multiple Snowflake accounts. This streamlined operations, reduced complexity costs by 30%, and provided a unified global reporting platform with governance tools.

Data monetization can certainly up the game for organizations, but a set of challenges hold back the peak optimization of data monetization. Let’s delve into it.

Challenges in Data Monetization:

Access to the data: One of the foremost challenges in data monetization is the fragmentation of data across various silos within an organization. Bridging these data silos can be complex, requiring robust integration strategies to bring disparate data sources together for meaningful analysis and monetization.

Security of Data: It is a paramount concern in data monetization efforts. Protecting sensitive information from breaches and unauthorized access is essential. Implementing encryption, access controls, and regular security audits can help safeguard valuable data assets.

Delivery of data: Data monetization often involves delivering data to multiple channels, such as APIs, dashboards, or third-party platforms. Creating and managing these data delivery channels can be intricate, requiring careful planning and infrastructure investments to ensure data reaches its intended audience seamlessly.

Data exchange, Data sharing, Data privacy: One of the biggest challenges in data monetization is ensuring the privacy & security of data. Businesses must carefully collect, store, and share data and have reinforced security measures to protect it from unauthorized access. The right people having access to the right data needs to be ensured. According to a study by Statista, 41% of organizations cite data privacy and security as the top challenge in data monetization.

Lack of data quality: Another challenge is ensuring the quality of data. Data must be accurate, complete, and up-to-date in order to leverage it. Businesses need to have processes in place to ensure the quality of their data.

A study by Gartner found that 70% of data is inaccurate or incomplete.

Lack of data skills: Many organizations lack the skills and expertise to efficiently monetize data. Therefore, they must invest in employees’ training to collect, store, analyze, and use data.

According to a study by IDC, 45% of organizations say that lack of data skills is the major barrier to data monetization.

Governance & regulatory compliance: Organizations must comply with regulations that govern data collection, storage, and use. These regulations can vary from country to country, so businesses must be aware of the specific compliance that apply to them.

The European Union’s General Data Protection Regulation (GDPR) is one of the most stringent data privacy regulations globally.

Lack of trust: Businesses need to build trust with their customers and partners in order to be able to share data with them. Customers and partners must be confident that their data will be used responsibly and securely.

A study by PwC found that 63% of consumers are concerned about their data usage by organizations.

High upfront costs: Data monetization can be expensive, especially for businesses that need to invest in new technologies and infrastructure. Organizations must carefully consider the costs and benefits of data monetization before deciding to implement it.

A study by McKinsey found that the average cost of data monetization is US$1 million.

To overcome traditional data movement challenges, consider building full-stack applications on cloud platforms like Snowflake. By moving applications to the data rather than the data to applications, you can enhance performance, reduce latency, and simplify data access, streamlining the data monetization process.

Empowering Data Monetization Through Cloud, AI, Gen AI, and Advanced Analytics

Cloud, AI, Gen AI, and analytics form a powerful quad-squad that fuels the engine of data monetization, ushering in a new era of value extraction:

1. Cloud Infrastructure: The cloud provides a scalable and flexible environment to store, process, and manage vast data. It eliminates the need for hefty upfront investments in hardware and infrastructure. With cloud resources, you can swiftly adapt to changing demands, optimizing costs and enhancing agility.

2. Artificial Intelligence (AI): AI adds intelligence to data monetization. Machine learning algorithms can unearth hidden patterns, predict trends, and generate insights that traditional methods might overlook. AI automates decision-making, allowing you to act swiftly on real-time insights, enhancing the precision and speed of your data-driven strategies.

3. Gen AI: Gen AI can automate data analysis, generate valuable insights, and even create data-driven content, enhancing the efficiency and profitability of data monetization efforts. Its ability to uncover hidden patterns and generate predictive models empowers businesses to make informed decisions and unlock new revenue streams from their data assets.

4. Advanced Analytics: Analytics turns raw data into actionable insights. Employing various analytics techniques such as predictive modeling, clustering, and sentiment analysis, you can extract valuable information that drives decision-making. Advanced analytics goes beyond hindsight, enabling foresight crucial for effective data monetization.

These components work together remarkable well.

• Data Enrichment:AI can enhance data quality and completeness by identifying anomalies, correcting errors, and filling gaps. Clean and enriched data is essential for accurate monetization strategies.
• Personalization and Customer Insights:AI-driven analytics can decipher individual preferences and behaviors, enabling tailored experiences that resonate with customers. This personal touch boosts engagement and loyalty.
• Real-time Insights:Cloud infrastructure and AI combine to deliver real-time insights, empowering you to make split-second decisions and capitalize on emerging opportunities.
• Cost Savings:Cloud’s pay-as-you-go model prevents overspending on resources, while AI and analytics identify cost-saving opportunities within your operations.
• Innovation and New Revenue Streams:Cloud, AI, and analytics pave the way for innovative data-based products and services, opening up avenues for new revenue streams.
• Agility and Adaptability:The cloud’s flexibility and AI’s adaptability enable rapid experimentation and adjustment of data monetization strategies, ensuring relevance in an ever-changing landscape.

In essence, the cloud provides the canvas, AI adds colors of intelligence, and analytics sculpts insights—combined, they create the masterpiece of data monetization.

Ready to embark on your data monetization journey with the cloud? Here’s a roadmap of best practices to kickstart your success:

Starting your data monetization journey in the cloud requires careful planning. First, understand your data by looking at how it’s organized and the insights it holds. Set clear goals, whether it’s increasing revenue, improving decisions, or fostering innovation, to guide your direction.

Once you’ve established your objectives, choose the right cloud platform that suits your needs and budget, considering the various options available. Streamline your operations by centralizing your data in a data lake. Utilize AI and machine learning to extract valuable insights and patterns.

Prioritize data protection through encryption and access controls to maintain data security. Build trust with customers by being transparent about data usage and complying with regulations. Continuously monitor the impact of data monetization on revenue, operations, and decisions to refine your strategy as you move forward.

For a smoother journey, consider these extra tips:

• Start Small, Scale Smart: Begin with manageable steps and expand as you gain insights.
• Collaborate for Success:Partner with like-minded organizations to amplify data monetization efforts.
• Empower Your Team: Train your team on data collection, analysis, and usage.
• Stay Ahead:Stay updated on data monetization trends to stay relevant and innovative.

Remember, success in data monetization thrives on preparation, adaptability, and a commitment to learning. Get ready to unlock your data’s potential and transform it into tangible value.

Monetize your Data with Hexaware

Hexaware’s Amaze® is a comprehensive platform that helps organizations accelerate their data monetization journey. The platform’s three core pillars, “Build,” “Monetize,” and “Govern and Secure,” provide a holistic approach to data management and governance.

Amaze®’s “Build” pillar helps organizations migrate their data to Snowflake’s Data Cloud quickly and efficiently. This minimizes business disruption and risk, while also enabling organizations to take advantage of Snowflake’s advanced data-sharing and analytics capabilities.

The “Monetize” pillar of Amaze® helps organizations unlock the value of their data by enabling them to share, exchange, and sell their data. This can be done through Snowflake’s data marketplace or through custom data-sharing arrangements.

The “Govern and Secure” pillar of Amaze® helps organizations ensure the security and compliance of their data. This is done through a variety of features, such as data encryption, access control, and auditing.

Overall, Hexaware’s Amaze® is a powerful platform that can help organizations of all sizes accelerate their data monetization journey. By providing a comprehensive approach to data management and governance, Amaze® can help organizations unlock the value of their data and achieve their business goals.