DaaS and DMaaS – What’s the Difference?
As we’ve reached out to the buy-side community over the past few weeks to talk about the latest evolution of Rimes Managed Data Services (MDS), I’ve noticed that one question keeps cropping up: what’s the difference between Data as a Service (DaaS) and Data Management as a Service (DMaaS)? It’s an important question when building a business case for data services.
DaaS and DMaaS (or MDaaS as it’s also known) are closely related, but the problems they solve are quite different and so too are the business benefits they bring about.
Let’s start with Data as a Service. DaaS solves a key challenge facing firms today: that internal legacy tech fails to provide the cost effective and rapid access to the ever-growing data sets that investment management firms need to be successful in a highly competitive, data-driven environment. DaaS is the technical solution for providing just that.
However, the data delivered by DaaS solutions is “near native” in form and shape, and data management technology, people and processes are still required to ensure governance and make the data useable across the organization. To that extent, DaaS is similar to ETL outsourcing and is unlikely to get the CFO or CEO excited about the business case, even though it is an important foundational data technology. Today, the DaaS market is served by a large number of providers and, to me, seems ripe for consolidation.
DMaaS, on the other hand, is a business service that builds on the technical foundations of DaaS. For want of a better word, DMaaS ‘outsources’ the technology and processes of the Chief Data Officer function to a managed services provider. DMaaS frees firms from the shackles of legacy enterprise data management platforms, which lock them into restrictive technologies and data policies, and allows them to put their data to strategic use. DMaaS helps investment management firms move to a cost structure that’s focused on business-aligned Opex, rather than the traditional heavy long-term Capex and Opex exposure.
With DMaaS, a firm’s value proposition is the service, not a technology – and a service that puts a data foundation in place to launch offensive strategies that generate value while still having the flexibility to satisfy defensive strategies, such as governance and supporting regulatory demands. When assessing DMaaS solutions, look for a provider that’s independent of platform and data sources, and ensure they can answer your organization-wide data supply chain needs, think of it as a sort of Amazon for all your data management requirements.
At present, there are only a few true DMaaS providers. This is because DMaaS services combine best-practice data management expertise, operational excellence and specialist data knowledge – all of which is underpinned by scalable, cloud-based technology. This isn’t something that can be put together overnight.
Both DaaS and DMaaS can play a role in buy-side firm’s data management strategies. However, firms should recognize that DaaS is not an end in itself. Rather, they should view it as a necessary stepping-stone to a DMaaS solution, with the latter providing organization-wide data enablement.
How to measure success? Always validate outcomes with business case objectives. If you see restrictive, legacy data management practices that limit how data can be used give way to more flexible, customer-focused approaches you will know you’re on the right track. When implemented effectively, DMaaS allows the way in which the data is being used to determine how it is managed.
RIMES has deep industry and data expertise and can provide much more information on this topic. If you would like to hear more, or set up a call to discuss, please get in touch.
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