Mark de Reuver, TU Delft, Leader WP 2
Introduction
What are viable business models for Safe-DEED technologies? Safe-DEED is not just about bringing cutting-edge technologies that preserve privacy on data marketplaces. It is also about innovative business models for these technologies.
To understand the business models for Safe-DEED, the notion of decentralized data marketplaces is crucial. Data marketplaces are platforms that bring together access to datasets from different private and public organizations. The common architecture is that of a data lake. Companies or government organizations bring in datasets, which are collected in a central repository. The idea is that this architecture creates value, because by combining data we get new insights. While there are many initiatives and pilots, the adoption in practice is very low, presumably to a lack of value for businesses to share data and concerns over risks of privacy and confidentiality breaches.
However, in Safe-DEED, we focus on a different architectural paradigm, which is that of a decentralized data marketplace. We assume that data is not stored in a centralized repository but instead companies hold on to their own datasets. The platform does not contain a centralized database, but consists of a stack of algorithms that conduct computations on the decentrally stored datasets. This is possible thanks to technologies of multiparty computation and private set interaction, which are currently being developed in the project. With this solution, actors are exposing data to a marketplace but do not require storing the data centrally.
This new architectural design leads to several questions:
- What does a decentralized architecture mean for value created, is it still possible to get meaningful insights that have value for businesses that participate?
- How to get such a decentralized platform started, because for the first couple of actors to join the value will be very low?
- What does the decentralized architecture mean for value for citizens and users: more trust, ethics, security? Or less because companies will expose even more data of their customers now that confidentiality concerns are removed?
- What does a decentralized architecture mean for control, for distribution of power and leverage? Who should be in charge of such a decentralized data marketplace, who’s liable if it goes wrong? And what does it mean for the operational processes, is this scalable and feasible?
Without an answer to these questions, it is difficult to bring the cutting-edge technologies for privacy preservation to market in a sustainable way. Therefore, in Safe-DEED, we conduct multi-actor business model research in order to answer these questions.
Example case: Decentralized data marketplace in telecommunications
Take for instance the perspective of a telecom operator selling premium pay TV packages to customers. They are currently market leader, and especially successful in selling live sports TV packages, but they would like to increase their revenues and subscriber base still. They have recently started experimenting with adding live streams via Facebook and YouTube just before a match starts, but have no insight yet in usage patterns. For such a telecom operator: should they participate in the decentralized data marketplace, why? What are the implications for the customers and their values, and for the telecom operator’s business and operations?
One example of a use case we are looking into in Safe-DEED would be the following. If the telecom operator would give access to its customer relationships management data in such a data marketplace, and a banks does the same, perhaps they can identify opportunities for cross-selling. Perhaps there’s an area where the bank has a lot of high-value customers, and these are not yet customers of the telecom operator. And then the telecom operator can put flyers in the bank office to attract customers to their premium pay TV package.
Multi-actor business models
In Safe-DEED we consider the business model of not just of the provider of a data marketplace or the user. Viable business models will need to benefit all stakeholders involved. Hence, the scope of our work entails both business models of the Safe-DEED technologies, and the business models that the Safe-DEED technologies enable. Also in terms of stakeholders, the scope of the business models is broad and includes the providers of Safe-DEED technologies, users, buyers of data and data sharers.
Technologies have no inherent value, but only when used in a specific context. The main use context within Safe-DEED is data marketplaces. These data marketplaces entail complex value networks, composed of data providers, data owners, data users and data marketplace providers. How roles are divided among actors is not always clear up-front, (1) one actor may fulfil multiple roles (e.g. a data owner may also be a data user); and (2) a role may be fulfilled exclusively by one actor only (e.g. in-house data marketplace).
The value of Safe-DEED technologies depends on how roles are being divided (e.g. multi-party computation technologies pose greater value if many data owners expose their data to solve the problem of a single data user).
As Safe-DEED technologies (are meant to) incentivize data owners to expose datasets on data marketplaces, data users will gain by having more relevant datasets and information. The value of these datasets in turn depends on the use context by the data owner. The use of datasets to improve business is referred to as data-driven business models. In this way, there are two important interactions between data-driven BMs and Safe-DEED:
- Safe-DEED technologies are (assumed to) lead to increased availability of datasets through data marketplaces, thus enabling data users to implement data-driven BMs
- Data users will only use data marketplaces and/or pay for datasets if they derive value from the data, hence data-driven BMs are conditional for any viable BM of Safe-DEED technologies
The mission of Safe-DEED is to contribute pieces to this complex puzzle of multi-actor business models for data marketplaces, and to help to unleash the great potential of data marketplaces for businesses and society.
