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Consumption based pricing for data
Matt Ober
July 25, 2023
When will we see consumption-based pricing as the standard for data sales?
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Data marketplaces have seen their fair share of innovation over the years. One thing that hasn’t taken off at scale is a consumption-based data marketplace.
As a large data buyer for 12+ years in the hedge fund space and having worked at Bloomberg for many years, consumption-based pricing never seemed to be offered by most vendors. Understandably most public companies like more easily digestible, steady pricing so that they can forecast quarterly numbers, and your VC-backed data companies want to have a simple recurring revenue so they can grow ARR for their next round. Unfortunately, customers are demanding consumption-based pricing and many believe that if this was offered they would ultimately spend more with vendors in the long run.
A data marketplace that is successful at negotiating with top, in-demand, data vendors and can offer a simple way to search and sample data across the marketplace, I believe will be the big winner of the future. One of the hardest pieces of this puzzle is getting the data vendors on board. Customers can then buy credits and spend based on consumption across all their data needs in real-time. Once this data is obtained by the marketplace, the LLM-AI potential makes this really interesting. The idea that you can leverage a ChatGPT-like interface to search for the type of data you are looking for and buy the pieces of data you need is an exciting thing to think about. Think about being able to not only buy a slice of data but buy a slice that is combined with another slice from multiple vendors and easily have AI transform that data with different calculations and deliver that in a visual format that can be presented to management.
Consumption-based data via an AI-backed marketplace is only a matter of time. This will change the way we consume data and I think will ultimately benefit not only the consumers but the data vendors that participate.
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