Today’s applications run on data. Customers value applications not only for the functionality they provide, but also for the data itself. It may sound obvious, but without data, apps would provide little to no value for customers.
And the data contained in these applications can often provide value beyond what the app itself delivers. This begs the question: Could your customers be getting more value out of your application data?
Beyond what you charge customers to use your app, data opens up a multitude of new revenue opportunities. You have the ability to monetize data sets, differentiate your offerings, adopt new pricing models, and offer additional data services that drive higher profit margins.
These types of opportunities can help you achieve higher profitability with your applications and data, as well as deliver deeper user experiences that encourage customer retention and continued financial success.
Explore new revenue opportunities
As you imagine different ways to maximize your application data, the key is to think about what brings value to customers and then focus on ways to monetize that value. Here are two approaches you may want to consider:
1. Extending the use of data by sharing it with external parties
2. Leveraging data features as a means to distinguish your offerings and update your pricing models
Companies that deploy multiple SaaS applications spend significant time, money, and resources building processes to move that data into a centralized data platform. They are willing to undertake this effort because the value of analyzing all the data together is more valuable than analyzing it in isolation. But why force them to go through all of this?
Snowflake has the ability to expose data directly between a provider and consumer without requiring additional integration or ETL work.. As data is updated in the application, it becomes instantly visible for analysis to the end consumer. From a business perspective, there are two ways to think about sharing this data:
- Revenue source: As an application provider, you can charge for application data as a premium data service. You are enabling your customer to benefit from better data analysis and stronger insights when they use your data or combine it with their own internal data.
- Customer experience: You can view sharing data directly with customers as a retention or satisfaction strategy, especially since it doesn’t cost much to share this data. Sharing application data becomes a differentiator for you as an application provider.
Also, there’s no reason to limit yourself to sharing data with current customers. Your data is unique and may be valuable to other organizations. For example, information captured through your application workloads may offer insights about consumer behavior in various industries. Why not monetize your anonymized data by listing it in the Snowflake Data Marketplace? Selling data drives a new source of revenue that costs you next to nothing.
Beyond sharing and selling data sets, you can also offer data services as a new revenue source. Consider launching value-add products and services, such as data enrichment and data clean rooms, which open up your offerings to new customers and new personas (think data scientists).
Now let’s think about the data itself. You can use factors such as frequency, storage, and granularity to differentiate your offerings, establish customer tiers, implement new pricing strategies, and drive additional revenue.
- Frequency: Ingesting data can be done on varying timelines, ranging from near real-time to hourly, daily, or even monthly. Data can also be analyzed at different speeds. As an application provider, you can tie data ingestion speeds and data analysis to different pricing tiers. For example, perhaps data is brought in at a slower cadence (say, a nightly basis) for freemium or standard customer levels, while customers who want to benefit from near real-time analysis pay a higher price point to be at a premier customer tier.
- Storage: The more historical data you combine with real-time data, the stronger the analytics you deliver will be. Storage costs are another factor that can be passed along to customers. Maybe freemium or standard customers benefit from six months of data storage, while customers who want all historic data to be stored are charged more. These costs can be baked into subscription service costs or used to establish customer tiers.
- Granularity: Customers may also want to work with raw data in order to extend their capabilities and run deeper analysis on their own. This creates another opportunity for a tiered model or consumption-based pricing. For example, you can offer aggregated data to freemium customers and unlock access to granular data for advanced customers. To safeguard your margins, you can adopt a usage-based pricing model that enables you to charge the customer for exactly the amount of compute power used.
How Snowflake powers the revenue potential in your data
Monetizing data starts with all your data residing in a single location. You can’t be constrained by data silos, backend platform limitations, or the costs associated with storing and using data. In short, you need a modern data architecture if you want to make data work for you.
The Snowflake Data Cloud is built on a multi-cluster, shared data architecture that provides near-infinite scalability, instant elasticity, and high levels of concurrency. It provides a centralized source for all data (structured, semi-structured, unstructured), with near-real-time access and usage.
Snowflake allows you to tap into new revenue opportunities, ship applications and products faster, and benefit from different pricing models. Here’s how.
Snowflake Secure Data Sharing
The biggest game changer for unlocking new revenue comes from Snowflake Secure Data Sharing. This unique capability enables organizations to share data from its original location in a controlled and governed manner. Live, ready-to-query data can be shared across clouds and regions.
These capabilities open up opportunities beyond just expanding offerings to your joint customers. You can also sell to new customers already on Snowflake and extend your product offerings to customers that are not on Snowflake. Here are the models that make it happen:
- Direct share: If your customers already use Snowflake, it’s easy to do a “direct share,” which enables them to join your application data with their own internal data sets for extended analytics. They don’t need to build ingestion pipelines, which saves them money and development resources, and they can see real-time updates.
- Bi-directional direct share: Direct share also enables customers to share their data with you, which can be used to uncover opportunities for additional application functionality. In addition, it can deliver insights around new product opportunities based on your analysis of individual or aggregated customer data.
- Read-only sharing: For customers who are not on Snowflake, you can provide read-only accounts so they can use whatever tools they want to analyze your application data. The idea is not to compete with your application but to complement it by enabling your customers to run additional analytics as they see fit.
- Snowflake Data Marketplace: Secure Data Sharing powers Snowflake Data Marketplace, where organizations can buy and sell secure, governed data. As an application provider, you can benefit from the marketplace in two ways:
1. New data sources: Access third-party data to build new products or enrich the products you have. Rather than spend months acquiring data, sizing servers, and figuring out how to bring additional data into your application, you can streamline the entire data acquisition process. Simply find and trial data before buying it. Data shows up in your data platform without any engineering work required. From a time-to-market perspective, this ease of acquiring data is a huge benefit for leveraging external data sets to build new products or features and accelerating analytics.
2. Sell data: Create new revenue streams by selling your anonymized data. This opportunity represents a new source of revenue that costs you next to nothing and may even entice new customers to your application.
Snowflake is recognized as a leader in the market shift to consumption based pricing, which can provide significant benefits to both vendors and customers. (To learn more about consumption-based pricing and how it can benefit your business, check out our key considerations blog and our blog on why CFOs should champion the consumption-based model.)
While changing the pricing model of an application requires a lot of planning and strategy, new revenue streams can more easily adopt consumption-based pricing. Snowflake’s data sharing capabilities help make this easier for our partners.
For example, when sharing data with your customers, you have the option to charge per query—you set the price per query in Snowflake, and then Snowflake can handle all of the tracking and billing. (There is also a “try before you buy” option to attract new customers.) With a reader account strategy, Snowflake automatically tracks the consumption of each reader account and makes the data readily available. This allows you to mimic Snowflake’s pricing strategy of charging for the actual consumption by each client on a monthly basis.
Be open to new possibilities
It’s an exciting time to be an application provider. You have more product directions to explore and more financial levers to pull, but it all starts and ends with data. You must ensure your data is always accessible and challenges such as data integration never slow you down.
That means building your applications on a cloud data platform that supports growth and enables pricing models that protect your margins. It means retaining customers because you can share data without friction or headaches. It means looking with fresh eyes at the value your applications and your data bring to customers and leveraging it to drive new revenue.
Customers will continue to create and use more and more data, and you want to be able to match that demand. With Snowflake, you can explore all the possibilities that data opens up while protecting your business, improving customer experiences, and building a strong financial future.