BESSEMER CLOUD COMPUTING LAW #8:
Leverage and monetize the data asset.
While Cloud Computing is about providing a subscription service to your customers, one of the happy consequences is that you end up hosting their data. This becomes a critical asset that you can monetize by increasing the value of your offering; by leveraging it across your customer base in the form of benchmarks; or for specific businesses, by using the data to generate leads (within the contracted obligations). In these difficult economic times, where prices are under pressure and customers are tightening their budgets, data can be a difference maker.
As a Cloud Computing service, your company captures a lot of business information on each individual customer, information that is typically peripheral to the delivery of your service, but could be very interesting for your customer’s executives. This information can generally be packaged and synthesized into a set of management dashboards that you can provide to your customers, potentially for an incremental subscription fee, or as a way to expand usage and increase product stickiness. Within our own portfolio, successful examples include the “CMO dashboard” (Eloqua), “Merchandising Dashboard” (Retail Solutions), “CFO Dashboard” (Intacct), and “HR Dashboard” (Cornerstone OnDemand) .
A second way to monetize your data is to identify the key performance indicators that you can derive from them – typically the ones that you have identified for your executive dashboards – and develop benchmarks across your customer base. These benchmarks can be customized along several dimensions (e.g., by company size, sector, geography) and be provided separately to your customers and even included in the executive dashboard. One of the early companies to sell benchmarks was Concur, the leading public company in the expense management space. With Concur reports, customers can compare their travel costs and business expenses against their peer group and track the evolution over time. We believe this “data-as-a-service” model has a lot of potential and will become more prominent as companies mature and need to find additional revenue streams.
Finally, another way to take advantage of your data is to use it to generate leads. While we recognize that this may not be possible for many of the B2B businesses for obvious reasons, this practice has proven to be successful for the lower end of the market, including small businesses and consumers. A company like Mint for example (now part of Intuit), even based its business model around it. Mint launched a SaaS financial application for consumers, competing against Quicken, but while the Quicken and Quicken Online business models used a license or a subscription fee, Mint was free and generated revenue by using its consumer insights to generate leads that were sold to service providers. For example, if Mint identified that your savings account had a 2% rate, it would notify you by email that another bank could offer you 2.5% and sell your click (or whatever action you would perform if interested) to a provider. Mint was so successful in this customer acquisition model that it ended up being acquired by Intuit in 2009 and will now replace the Quicken Online product.