packaged offering. Comparing Packaged vs Composable CDPs

“Composable CDP is not a thing. Composable architecture is,” my colleague Craig Howard previously penned in an internal missive. He explained that Customer Data Platforms (CDPs) gained traction when organizations could not implement their own cloud-native customer data store and could purchase a commercial, off-the-shelf solution — a “packaged” CDP — that could help them realise the benefits of cloud technologies by managing their customer data.

But things have changed more recently:

• IT organisations have evolved and built skills around cloud technologies.
• Data integration needs have often surpassed the CDP capabilities. Many CDPs struggle to manage complex data structures or handle answering complex questions about the data.
• Policies and a patchwork of global laws have introduced complexity around privacy, consent and data residency.
• Brands are now creating their single customer view with cloud-native identity resolution, data integration and data storage capabilities. CDPs are adjusting to this paradigm, the data clouds and the resulting composable architectural pattern, calling themselves a “Composable CDP.”

Packaged vs. composable

A composable CDP is based on an architecture anchored on a cloud data store for customer data. In composable, the CDP becomes an orchestration platform — managing audiences and journeys and activating the customer data.

Yet, deciding to go with composable vs. packaged CDP is not straightforward. First, if you’re shopping for either, your head is in the right place. Activating first-party data across channels is the future. If your decision is composable vs. standalone, there is much to unpack.

Convergence

In 2021, one had to choose between reverse ETL (composable) or CDP. Today, that choice is not clear-cut. Many CDPs and marketing technologies can query a database. For example, Lytics, ActionIQ, mParticle, Blueshift and others have made strides towards connecting natively to a client data warehouse and the valuable data that lives in it. One can effectively practice composable with some CDPs previously considered packaged.

Implementation

It sounds simple — slap a reverse ETL over an existing data warehouse. Yes, “composable” may be easier to implement. Time to value is typically faster if you have the following:

• All key data streams easily accessible in your data warehouse.
• Identity resolution strategy worked out.
• An engaged analytics or enterprise data team.

Thus, a composable CDP pushes dependencies to the client data warehouse. A CDP may provide comparable or superior time to value if you do not meet the above criteria. For example, an identity resolution strategy is established during onboarding with many packaged CDPs. Additionally, common connectors for email platforms and other martech may provide the client with datasets it hadn’t previously stored. This new data and the identity resolution strategy give many clients a “customer 360” as a value-add.

Use cases

The use cases achieved in a composable approach do not fundamentally differ from packaged CDP. There are exceptions — CDPs such as Lytics and BlueConic offer simple site personalisation. If the data underlying the segment is reliable for marketing purposes and the identity resolution strategy permits activation in a given channel, use cases are limited only by the capabilities of the team using the tool. However, packaged CDPs may have built-in machine learning (ML), reporting and support for real-time that composable practitioners may need to solve for separately.

Identity resolution

A composable solution will not create identity resolution. Composable architectures rely upon pre-existing join keys, cloud-native identity resolution for disparate data sets or a pre-existing customer table with all relevant segmentation criteria. CDPs can work with a pre-existing identity resolution strategy, similar to composable architectures — or they can create an identity resolution strategy for the client as part of their

Originally reported by Martech: https://martech.org/composable-cdps-how-do-they-differ-from-packaged-solutions/
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