I can be mean. My two decades as an analyst in the marketing technology industry have turned me into that guy whose inspiring keynote speakers at the conference warn you—the one who often replies, “Be there, try it.” Hard training and experience have taught me to see patterns, and in the world of self-defense that emphasizes the new and the shiny, patterns often repeat.
So let me tell you a story. It has to do with the birth and growth of an important part of marketing technology, devised by some novice sellers exploiting new and modern frameworks.
It is told like this. A new technology has emerged for non-technical marketers to perform agile work yet intended for developers, thus eliminating frustrating bottlenecks. The new platforms were introduced as “liberated” technology and quickly became an essential part of the enterprise’s martech stacks. These new vendors quickly grew in disdain from the major software players, who finally realized they needed to enter this market. But it was too late: Dozens of startups had the expensive lead, and major vendors proved too hidden with their current, outdated structures. So a highly fragmented market continued, with fast innovation and low prices for everyone. This made institutional marketers very happy.
This story is about the Web CMS market, circa 2001.
It was in 2001 when I founded CMS Watch, now Real Story Group, to analyze, track and evaluate dozens of Web Content and Experience Management (WCM) players coming to the market. Now in 2021 I see an almost identical story emerging with Customer Data Platforms (CDPs).
Of course one should avoid overestimating the historical similarities, but the parallels between the rise of the WCM and the rise of CDPs are curious. Most importantly, I believe this story can teach you, the commander of the military, some important lessons.
WCM Market Evolution
WCM Marketplace is founded and sponsored by dozens of start-up vendors and (mostly commercial) open source projects. The sheer variety of approaches amazed me at the time, but nearly all vendors took advantage of the new models possible with thin clients, database-driven dynamism, and new template frameworks. The need for website self-management was ubiquitous – How could we possibly manage without CMS? – The rising tide of demand has lifted almost all sellers’ boats.
do not unite
When Microsoft acquired WCM vendor NCompass in late 2001, traditional analyst firms translated “commoditizing the market” and predicted an imminent merger of entry-level vendors. Well, that didn’t happen. Microsoft abandoned NCompass (as the big vendors used to do…), while IBM, SAP, Oracle, EMC and others largely failed in the market, even after some acquisitions. The WCM market has seen some M&A activity, but it turns out that these are not easy platforms to combine or standardize, so today’s enterprise customers can still choose from at least twenty reasonable resources.
Fast innovation with eternal trade-offs
This diversity of players has resulted in consistently rapid innovation, along with generally lower licensing prices over the years (albeit increasing somewhat with the move to PaaS subscription models)
Dealing with the fundamental business and technical trade-offs has led to periodic answers to some of the tough questions in the world of WCM. Want to manage content or experiences? What is the best place to work? Do we curate our content and experiences top-down or bottom-up? Is our WCM platform the center of our digital content world or is it just one channel? I have learned over two decades that there is no one universal answer to any of these questions, but there is ولكن He is A resource out there that can provide a specific solution depending on how you answer.
Lessons for CDP Buyers
Dominance of independent sellers
Over the next five years, you’ll likely see most of the energy in the CDP space continue to come from independent sellers. They have several years leading in majors such as Adobe, Microsoft, Oracle, and Salesforce. Independent vendor solutions can more easily fit into diverse groups, while larger vendors have proven reluctant to extract themselves from legacy investments in their legacy engagement level platforms. Their CDP offerings tend to be parochial as a result, and have largely regressed to relationship-oriented CDP sales strategies — or imprecise bullying — rather than demonstrating technical and commercial fit.
Unification is unlikely
As with WCM platforms, you cannot easily combine two different CDP solutions. You may see some attempts at consolidation, where one vendor acquires multiple solutions to meet different market needs (this rarely ends well). You may see tech aggregators take over a discontinued CDP vendor to exploit lovable maintenance and hosting revenue (not great, but not disastrous for you licensee). You’ll see some adventure-fueled CDP players being sold to private equity concerns as a transition from growth to earnings game (again: not necessarily bad) If the WCM market offers anything similar, you won’t see many CDP sellers disappear completely.
Scope as a key differentiating factor
As with the early stages of the WCM marketplace, CDP sellers seem to differentiate primarily on scope, and secondarily on cost/complexity. Over time, I expect the latter dimension to become more important as the organization’s capabilities shake and the market elongates as it matures. In the near term, though, CDP sellers can be increasingly distinguished by scope:
- vertical depth in terms of the backward-facing enterprise data management functions that it may (or may not) accommodate, and the forward-facing sharing and coordination services that it may (or may not) provide; And
- Horizontal breadth in terms of the number of customer experience use cases in the organization that they handle outside of the marketing department only
Note that the wide depth and breadth of a CDP may not prove to be appropriate for your architecture and certainly comes with heavy resource burdens. Also, the lines get blurry here. Much of RSG’s advice to CDP buyers in recent quarters has focused on the finer details of the services in your larger group. (This recorded summary shares more ideas.)
what should you do
As always, run a feasibility check on any vendor you are considering. An independent CDP vendor may only employ 100-200 employees, so they may be smaller than some other technology vendors. But don’t rule it out completely; The lesson from the WCM market is that smaller sellers can often be more flexible and more permanent.
As the CDP market breaks down into complex levels as it matures, be careful not to overbought here. You may be tempted to choose a multi-deal CDP, but it may be less agile and more resource intensive, thus slowing you down at the wrong time.
Regardless of the vendor, don’t underestimate the services aspect of CDP. Many CDP initiatives never end. Requests for new data entries and additional activation channels usually don’t stop. You may need outside help on a consistent basis, particularly with data integration and events. Think carefully about whether the supplier’s service department offers the best long-term fit here. The WCM story has been full of systems integrators playing leading roles. Today on the CDP side, your integration calls will result in a thinner implementation knack, but that shouldn’t stop you from trying.
In other words, this quack is telling you to take some reasonable risks. why? Because I believe accessible customer data is essential to the future of your Martech group. Sometimes history can inspire, too.
Real Story on MarTech is offered through a partnership between MarTech and Real Story Group, a non-vendor research and advisory organization that helps organizations make purchasing decisions about marketing technology applications and digital workplace tools.