Towards a paradigm shift in the Customer Data Platforms market

Customer Data Platforms or CDPs are very popular these days. The term “CDP” designates different things: “pure player” solutions, CRM, and Marketing tools that have skilfully taken up the term.

There’s probably a trend around the expression “CDP,” but this surface agitation hides a real underlying movement. More than ever, businesses should better leverage customer data to improve marketing and sales performance.

Off-the-shelf CDP solutions aren’t the only approaches to address this need. Many companies choose to personalize their customer database.

Contrary to what one might think, the big winners of this fundamental movement will not necessarily be CDP software publishers or CRM solutions but rather the major Cloud platforms.

🚀 The Rise of Customer Data Platforms

A Customer Data Platform is an off-the-shelf solution created to organize, unify and transform customer data.

Publishers always put forward the same promises:

  • The CDP manages all data, online and offline, including behavioral data, unlike traditional CRMs.
  • Thanks to many connectors that make CDP editors proud, it can connect to all data sources and activation tools.
  • It is easy to use and gives power back to marketing teams and, more generally, business users.

This is enough to justify the enthusiasm around this technology.

3 indices of CDP success

CDP is undeniably popular. Several indices prove this:

  • The volume of searches in Google for the expressions “CDP” and “Customer Data Platform.” Google Trends chart is very clear.
customer data platforms market trends
Source : Google Trends
  • The increasing number of software companies using the term CDP. Do you offer a customer data management marketing solution? Call it “CDP,” it sells better!
  • All consulting firms will tell you the number of CDP projects is increasing.

A simple fashion effect?

Sure, there is a fad, but as we said initially, it’s about the expression “CDP.” The drivers of this trend are very solid. The primary reason for CDP’s popularity is its capacity to respond to problems that are only growing:

  • Pressure from the market, from customers, to set up an ultra-personalized customer relationship on every canal. All companies want to offer an omnichannel customer experience, but the good old CRM can’t do it.
  • Data sources proliferation and the resulting increase in data dispersion.
  • Marketing teams are willing to gain autonomy to use data in their operational tools: emailing, retargeting, chatbot, etc. Marketing is fed up with the Data Lake.
  • The accessibility of AI / Data technologies to exploit behavioral data.

CDP’s promises recalled above seem to respond to all these problems and needs directly. Logically, CDP appears as the ideal solution, and its popularity increases.

📚 Many possible approaches to building a CDP

Several approaches are possible to build a CDP.

The first is to buy a CDP off the shelf. In this case, you will make your choice in a market of two types of actors: big ones and small ones, behemoths of CRM and pure players.

The other option is to build your custom CDP: the Build approach (vs. the Buy approach).

Big CRM publishers have invaded the CDP market

Almost all CRM giants have launched their CDP offers; it’s a reliable sign. Salesforce, Microsoft, Adobe, SAP, all these behemoths have followed the movement, surfing on the craze for the expression CDP.

These players develop “CDPs” as software bricks attached to the publisher’s CRM ecosystem rather than open platforms. Salesforce CDP, for example, is a brick of Marketing Cloud.

salesforce cdp

Salesforce’s offer sums up all CDP promises:

  • Data unification around a unique customer identifier to obtain the famous single customer vision.
  • Creation of audience segments from unified data to set up ultra-targeted actions and campaigns.
  • Data activation in marketing and sales tools.

The Salesforce CDP landing page is a breviary of CDP promises.

The rise of CDP pure players since 2015

Alongside these dominant players gravitates a whole galaxy of “pure players,” former DMPs or tag managers who have converted to CDPs.

customer data platform market
Source : Chiefmartec.

Source: Chiefmartec

One of the latest reports from the CDP Institute gives interesting information on the CDP market and its evolution, including:

  • The CDP market is made of a large number of publishers. The CDP Institute lists 151 in its July report.
  • The market is divided into two groups of players:
    • The big mature players, who existed before 2013. Thanks to resounding fundraising and takeovers, these leaders are getting stronger.
    • Small CDPs created after 2014 (when the expression CDP emerged). Many of them have been redeemed.

So, we’re witnessing a movement of concentration; big ones redeem little ones. Leaders drive market dynamics.

cdp market growth
Source : CDP Institute

Build vs. Buy

The “big” vs. “small” distinction should not hide the real structuring distinction: Buy vs. Build.

There are two ways to obtain a Customer Data Platform:

  • Buy a solution on the market, off the shelf solution > Buy
  • Build a tailor-made CDP designed for the company’s specific needs > Build.

The CDP craze has tended to overshadow the second approach. We finally associated the term “CDP” with off-the-shelf solutions.

But things are changing, and tailor-made approaches have become more popular. We’ll soon see why.

How do you choose between these two technological options?

Let’s recall the strengths and weaknesses of each option on the main selection criteria:

  • Cost. When it comes to deployment cost, the off-the-shelf CDP option is the most attractive because building a custom CDP requires more work than buying a license and installing pre-configured software. But, the operating costs of a tailor-made CDP are lower. Off-the-shelf CDP licenses are costly.
  • Customization. Building a CDP is the best way to have a platform that perfectly meets the company’s target use cases. On the other hand, “ready to wear” CDPs impose their data models and don’t always allow you to deploy all target use cases.
  • Data security. When you choose the off-the-shelf CDP option, your data is hosted on the publisher’s servers. But with your own CDP, you host on your servers (on-premises) or in the cloud on rented servers. So you have better control over your data.
  • The complexity. A Customer Data Platform is powered by many data sources, each with its own language and data model. Succeeding in unifying this data in a tailor-made database is a challenge. As always, Tailor-made always travels with its sister, “Complexity.” If you aim for simplicity, choosing a tailor-made CDP is very tempting.
  • The deployment time. Installing and configuring an off-the-shelf CDP is faster than creating one from scratch. It takes one month of deployment in the first case and between 2 and 4 months in the second.

Each of the two options (Buy or Build) has advantages and disadvantages. So, making a choice is not easy.

But do we really have to choose between these two options?

Why not combine the best of both worlds?

We’ll present a third approach; hybrid and Data Warehouse first.

The hybrid approach, Data Warehouse first, is soaring

History direction increasingly favors the hybrid approach that involves building the CDP into your Cloud Data Warehouse. Therefore, you can benefit from all the functionalities offered by a modern CDP: many possible integrations, the identity resolution essential to building a Single Repository, etc., while keeping control over the data.

This approach deserves attention.


For at least 3 reasons. It’s:

  • The most profitable. You don’t have to pay a CDP publisher to host your data on its servers. CDP publishers’ data storage charges far exceed those of a Cloud Data Warehouse publisher. By using DWH, storing your data becomes convenient.
  • The most secure. The data is not controlled by the CDP editor, only by you.
  • The most flexible. Connectivity is a strong point of Data Warehouse Cloud solutions. Each DWH platform offers hundreds of connectors with leading MarTech data sources and tools. But native connectors offered by the CDPs don’t limit you. DWHs offer more flexible and broader integration solutions.

🏆 A paradigm shift that will benefit (big) cloud platform publishers more than SaaS publishers

The hybrid approach leads to a paradigm shift. Its main characteristic is the central place of the Data Warehouse Cloud. Actors offering DWH Cloud solutions certainly have a bright future ahead of them. The time when the MarTech market was dominated by an oligopoly made up of Salesforce, Oracle, SAP, and Adobe is almost over.

What if the main MarTech actors became BigQuery (Google), Redshift (Amazon), Azure (Microsoft), or even Snowflake Obviously, they have everything to gain from the development of DWH-first approaches.

Off-the-shelf CDPs are ETLs with a software layer

In the past (but this past is still actual for many organizations), companies used applications that each worked with its database, whether developed by the same or different publishers.

For example, suppose you use Salesforce Marketing Cloud (for marketing), Salesforce Commerce Cloud (for commerce), and Salesforce Service Cloud (for customer service). In that case, you have three independent systems, each with its own database. Your data is not unified.

CDPs emergence is due to scattered data. These CDPs on the shelf are just ETL tools designed to build data pipelines and synchronize data between applications.

They work similarly (Extract – Transform – Load) with the same limits: pipelines are expensive to set up &maintain, and subject to leaks.

Cloud data warehouse solutions have great advantages

And then came cloud platforms, BigQuery, Snowflake, offering a radically different approach. These technologies allow you to build your unified database in the cloud and work like a CDP…without pipelines.

Connecting a data source to your Data Warehouse BigQuery is all about adding the right permissions to your data source’s BigQuery API key.

Connecting data becomes incredibly simple:

  • There’s no data migration.
  • Storage is no longer a problem; your DWH can put a potentially infinite volume of data without requiring any maintenance.
  • A cloud platform is an open system that makes it easy to add third-party tools to your infrastructure, unlike CDPs on the market, which confine themselves to a rigid environment.
  • The computing power offered by the DWH Cloud solutions is much higher than what CDP solutions on the market offer.
  • You can centrally and granularly manage rights and access in a DWH Cloud.
  • Third-party applications can access large amounts of data and query it as much as they want without impacting its operation and availability.
  • The data connection causes no leaks (because there are no pipes) and no synchronization lags.

The time where tool stacking meant data stacking might soon be a bad memory.

Building your CDP in your Data Warehouse allows you to easily connect your data sources, unify this data and then redistribute it to business applications.

This approach makes it possible to build a “platform” in the strict sense of the term, not a software suite.


A business that wants to get more out of its customer data and a good technology solution should consider the hybrid alternative presented. No, off-the-shelf CDP is not the only option. No, you don’t necessarily have to choose between Buy and 100% Build approaches.

The DWH first approach is growing in popularity to the delight of the major cloud platforms… The three-digit growth of an actor like Snowflake is emblematic of this major development. To be continued!