In today’s business world, companies are discovering that data–both their own and that of others–can help them grow both their business and their customer base. Data analysis, for example, can provide greater insight into the needs of current or future customers, or help spot new opportunities. Data sharing can promote goodwill, enable stronger collaboration among peer companies and generate cost savings for the participants. And monetization of new or enhanced data sets can provide revenue and a competitive edge.
Data marketplaces can provide a virtual setting for all of these transactions.
Underpinned by secure, high-bandwidth, low-latency digital infrastructure, data marketplaces allow companies to buy, sell, or share data in accordance with agreed-upon guidelines for privacy and data integrity. From airline manufacturers seeking to share engine performance and fuel economy data with commercial airlines, to manufacturers of construction and mining equipment delivering real-time asset health and performance data to its customers, data marketplaces offer a disciplined, transparent environment in which all industries can make the best use of data at their disposal.
Leaders’ guide to digital infrastructure
Learn how 50%+ of the Fortune 500 have leveraged Platform Equinix to implement and capitalize on their digital-first strategies.DOWNLOAD THE GUIDE
Entering the age of data marketplaces
Traditionally, a company might share data electronically with another company on a peer-to-peer basis. These transactions, however, forfeit any control the data supplier might have over if, when and how the data gets used. And as the number of peer-to-peer relationships grows, the amount of company resources dedicated to copying and sending data to others can become overwhelming.
That’s where data marketplaces come in. They offer a smarter, more cost-effective way to share and leverage data.
Unlike peer-to-peer relationships, data marketplaces offer “one-to-many” or “many-to-many” relationships. Data is no longer transferred, either digitally or physically, from company to company. Instead, each company simply grants access to its data—typically stored in a controlled environment—along with specific use guidelines. Companies engaged in data marketplaces never cede control of their data.
Designing a data marketplace
Few real “many-to-many” data marketplaces exist currently. In a perfect world, however, they would have the following characteristics:
- Shaped by data gravity: As data sets become larger, so too do their storage requirements, which makes them more difficult to move. “Data gravity,” the concept that large data sets attract smaller data sets, relevant services and applications, suggests that it then becomes smarter to move applications and processing power closer to that data. This shift will increase the efficiency of data transactions, and minimize latency. In the same way that a centrally located town market can serve many customers efficiently, data marketplaces work best when all data assets are located close to the logical “center of town,” which will speed the transfer of data among suppliers and consumers.
- Built for speed, security: Absent a compelling reason to put data on an open, unsecured server where anyone can access it without restrictions, data marketplaces should avoid routing their traffic over the internet. The internet is not private, is vulnerable to hacking, and can deliver inconsistent performance due to peer sharing among internet service providers. When possible, data should flow via private, high-speed private connections among data suppliers and data consumers.
- Governed by rules that ensure accuracy, transparency: In a data marketplace, every data provider has the right to stipulate the rules of engagement for accessing and using data sets–as long as those rules also comply with local and regional data regulations such as Europe’s General Data Protection Regulations. Still, marketplaces should be monitored to ensure that agreed-upon rules of engagement are being followed, that transactions are being logged with full transparency, and that appropriate audit trails are being created.
- Designed for processing in a neutral place: Just as a company’s data is intellectual property, so are the algorithms that companies design to operate on data. A company might not want to move their data and the algorithm owner may not want his creation to be applied in an ‘untrusted’ environment. A potential solution is to have the algorithm operate on the data in a neutral, mutually trusted environment and only allow the result to be exported. Data gravity dictates that such an environment should be close to where data often sits (such as clouds) to allow easy access to multiple sources of data.
The concept of data marketplaces is still in its infancy, but some companies are already creating Data Marketplace as a Service (DMaaS) software to help monitor, manage and ensure the transparency of data marketplace transactions. Some data marketplaces even provide templates for the smartest, most efficient way to format and exchange data.
Creating a data marketplace
Data marketplaces can evolve in one of two ways–bottom up, when companies feel the need to share data and collaborate to mutual benefit; or top down, typically when governments recognize the value of having government agencies share their data in safe, productive ways.
A good example of a top-down data framework already underway is Gaia-X, an international nonprofit association whose primary objective is to create a trusted, sovereign digital infrastructure for Europe that interconnects and governs many single data marketplace offerings. Its sponsors describe it as “an open, transparent and secure digital ecosystem, where data and services can be made available, collated and shared in an environment of trust.”
Among Gaia-X’s goals are identifying common data standards that will make it easier, not harder to exchange data among government, industry and private organizations; i.e., not rules for the sake of rules but rules for the sake of making things easier.
Getting started with data marketplaces
If you’d like to take advantage of the benefits of data marketplaces, here are five steps you can take to begin the process:
- Identify sources (including location) of data needed to expand your company’s product offerings.
- Establish a digital point of presence close to those sources.
- Identify how best to interconnect new data sources with current business to meet frequency, volume and response requirements.
- Manage growth by staging data and processing applications locally.
- Expand services to subscribers as appropriate to monetize the data.
Enabling data marketplaces
As the world’s digital infrastructure company™, Equinix can help companies deploy digital infrastructure to establish, and/or interact with, a data marketplace. Equinix has guided companies in the manufacturing, healthcare, automotive and financial sectors on how to interconnect with data marketplaces available through Platform Equinix where they can share, enrich and even monetize their own offerings. By provisioning digital services adjacent to high value data marketplaces, these companies have gained access to new data sources, reduced risk, decreased data transfer fees and benefited from rich new relationships with the broadest choice of partners.
To learn more about how companies are deploying digital infrastructure read the Leaders’ Guide to Digital Infrastructure.
You might also be interested in reading: