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PHOTO: Cory M. Grenier

A new class of customer data platform (CDP), called Operational CDPs, has emerged and is expected to grow rapidly, according to findings in a report from the CDP Institute. Operational CDPs are “primary customer-facing systems that include a CDP capability,” according to the CDP Institute. “They will take an increasingly prominent role in the industry as operational vendors including Salesforce, Adobe and Oracle add CDP products,” researchers added.

So what does this mean to CDP buyers? More confusion? Well, maybe. There’s always a little of that when it comes to any talk of CDPs. It's a growing segment of customer experience software — and a fast-growing one: in the first half of this year, the industry added 19 new vendors, 2,300 employees and $680 million in cumulative funding, and results confirm a previous estimate of $1 billion industry revenue in 2019, according to the CDP Institute.

What Buyer's Should Know About Operational CDPs

So what should buyers know about Operational CDPs? The CDP Institute found an increasing number of firms offer a CDP as part of a larger operational system. They are included in the Campaign CDP category, but will eventually be categorized separately as “Operational CDPs," according to the CDP Institute. Operational CDPs are primary customer-facing systems that include a CDP capability and include Salesforce, Adobe, Oracle, Gainsight, Totango and Healthgrades.

The big players like Adobe and Salesforce and Oracle have a separate data store and naturally offer a broad set of products, said David Raab, founder of the CDP Institute. They, along with new players like Gainsight, Totango and Healthgrades, have a CDP that is an add-on to existing products, which have other functions that are more directly related to business operations, according to Raab. “So, on the one hand, you don't want to say it’s not a CDP because it does what a CDP does,” he said. “It does keep a particular set of functionalities in terms of building those unified customer profiles. But that doesn't mean it’s a CDP vendor." Raab defines a CDP as "packaged software that creates a persistent, unified customer database that is accessible to other systems.”

Related Article: Is That New CDP Truly a Customer Data Platform?

Operational CDPs Set to Grow Rapidly

Organizations have their operational systems already in place such as cash register systems, reservation systems, a CRM system, etc. Because many are starting to recognize the need for a CDP requirement, vendors are “very motivated to add the capabilities to make that possible,” Raab said. “It’s just going to be something to add on to an existing product that's not that hard to add on,” Raab said. “The requirements of a CDP are pretty well-defined at this point, and the technology to do this is pretty well understood. So now (vendors) can actually partner with somebody or white label it if they really wanted to.”

Be Leery of CDP Promises

Make sure as a buyer, though, it’s you crafting your omnichannel architecture and not a vendor defining it, said Tony Byrne, founder and CEO of Real Story Group. No matter what new class of entrants enters the mix for CDPs, buyers should be leery of vendor promises when it comes to CDPs and CDP-like capabilities. New entrants to the CDP industry and longtime vendors of related technologies will claim they can provide CDP services but this is almost never true, according to Byrne. And buyers should also be leery of vendors that don’t have a CDP offering but say they have existing capabilities that obviate the need for a CDP.

“They’ll say we’ve got this cloud package that allows you to start gathering anonymous and first party data and personalize against it, and so you don't need a CDP because we've got one,” Byrne said. “A lot of these vendors to the extent that they want to do personalization will argue that they can also help provide customer data stores of some kind or another. In general, we recommend decoupling your CDP from your engagement systems, particularly at an individual engagement level. It’s got to be channel-neutral.”

Related Article: Customer Data Platforms: The Truth Behind the Hype

We Have CDP-Like Capabilities

Some big customer experience software providers are pulling no punches with CDPs, coming out with their own versions: Salesforce and Adobe each announced plans to release CDPs this year. Oracle and SAP did, too.

But what about those vendors you’re already invested in who have not (yet) debuted a CDP, officially, but say they have CDP-like capabilities? Would that satisfy your needs? Byrne made his case about these promises being empty. Some argue there are vendors that can produce CDP-like capabilities. David San Filippo, director at Perficient in the Microsoft Customer Experience practice specializing in Sitecore Solutions, wrote a blog that compared Sitecore’s existing customer data offerings with what CDPs offer. 

“Although Sitecore isn't technically a CDP, it does handle a number of scenarios cleanly out of the box, and has the needed API's to support building what it doesn't have,” San Filippo wrote in his blog post. “That being said, there are clear use cases and value provided by CDP platforms, and if you are in need of them, a better solution would be to use both.”

Know Your CDP Requirements

Whether you're buying a CDP as a standalone product or CDP as part of the component of a larger system, it still needs to do what a CDP needs to do, according to Raab. “It needs to take the data in from sources, keep all the detail, store the data, store profiles and share the data,” he said. “It's supposed to do all that stuff, otherwise you're not going to get what you want. So it really depends from the buyer's point of view and the scope of their needs and their requirements.”