Know thy customer

Everything everywhere all at once

In the wake of data privacy changes by mobile platforms last year, the enterprise tech world is suddenly very interested in customer data platforms (CDPs). With Twilio’s acquisition of Segment, Treasure Data’s $234 million fundraise late last year and Salesforce’s push into CDPs, the hot new buzzword is potentially a hot new market.

“The way I think about [CDPs] is, it’s trying to create a 360-degree view of each of your customers to help you more accurately identify what would most resonate with this customer,” said Derek Zanutto, a general partner at CapitalG.

• The term first started appearing in mainstream conversations back in 2017. In short, CDPs are centralized places to store all the first-party data a company collects from its customers.
• “It’s fundamentally a data platform that unifies the data, and processes it, and then activates the profiles across many channels,” said Treasure Data CEO Kazuki Ohta. The key is not just collecting and storing that data, but making it available to use.
• The need for CDPs first arose as companies realized they had this data but didn’t know what to do with it.
• “The transformation of the data, the ability to personalize that customer information, I think is a key value prop of the customer data platform,” said Twilio Segment Vice President Jodi Alperstein.

It’s also why CDPs are most commonly talked about in a marketing context, because it’s the most natural extension of using data about customers. After Apple and Google restricted the use of third-party cookies in apps and on the web, marketers needed to find new sources of customer information.

• “It's taking pieces of different marketing technology [and putting] them together so that as the consumer record exists in all those different systems, whether that's a cookie, a CRM record, an email, whatever it is, we can actually create one profile of that person and then use it more effectively in different marketing,” said Cory Munchbach, COO at BlueConic.
• Still, the applicability of CDPs extends far beyond just marketing, into sales, service and any other areas of an enterprise that could benefit from a more complete customer view.
• “I absolutely think it's critical to extend beyond that,” said Bobby Jania, senior vice president of Marketing at Salesforce. “We're uniting marketing with commerce, with service, with sales, with IT.”

CDP vendors include companies such as Segment, Amperity, mParticle and Treasure Data, as well as smaller companies like Lytics and BlueConic. Outside of the focused CDP players, marketing cloud vendors like Salesforce and Adobe can’t afford to ignore this trend. And ERP players like Microsoft and Oracle want to extend customer data into purchasing, products and supply chain software.

The challenge is that vision hasn’t always materialized.

• Early attempts at CDPs led to a few false starts and some disillusioned customers, and the appetite for CDPs almost threatened to fizzle out.
• “If you roll the clock back two or three years ago, there's a lot of buzz around CDPs, and how it's played out has sort of underwhelmed a lot of folks in the industry, at least on the investment side of things,” said Zanutto.
• But what prevented CDPs from having their breakout moment three years ago? A combination of over-promising and under-delivering, and bad market timing, according to industry practitioners and investors.
• “Have I seen any kind of large-scale deployment of a CDP where it works as advertised? No,” said Valoir principal Rebecca Wettemann.

CDPs may have struck out the first time around, but it’s not over yet. Since 2017, the enterprise tech world has shifted dramatically.

• The pandemic accelerated the need for digital transformation; regulatory changes and mobile platforms forced a shift toward first-party data; and more options arose for companies looking to outsource complex data operations.
• Consumer protection laws such as GDPR or CCPA, along with the decline in third-party cookies, have also made a first-party data strategy not just competitive but necessary for survival.
• “If you believe consumer behavior is becoming digital and that consumer privacy is becoming stricter, then CDPs will be required in most of the brands and businesses,” said Treasure Data’s Ohta.

All of those forces combined have brought CDPs to the surface again and spurred more competition than ever.

• “It's just a matter of when, not if,” said Zanutto. In the enterprise tech market, timing is everything, he explained, and coming to market too late or too early can actually be detrimental.
• “I think there's a lot of good reasons why now is different, it’s heading in that direction. But is it going to be a year to greatness, or five years to greatness? That's a really hard question to know.”

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“Morally reprehensible” AI in classrooms

Intel and Classroom have partnered to integrate an AI-based technology developed by Intel with Class, which runs on top of Zoom. Intel claims its system can detect whether students are bored, distracted or confused by assessing their facial expressions and how they’re interacting with educational content.

“We can give the teacher additional insights to allow them to better communicate,” said Michael Chasen, co-founder and CEO of Classroom Technologies, who said teachers have had trouble engaging with students in virtual classroom environments throughout the pandemic.

But critics argue that it is not possible to accurately determine whether someone is feeling bored, confused, happy or sad based on their facial expressions or other external signals.

“Students have different ways of presenting what’s going on inside of them,” said Todd Richmond, a longtime educator and the director of the Tech and Narrative Lab and a professor at the Pardee RAND Graduate School. “That student being distracted at that moment in time may be the appropriate and necessary state for them in that moment in their life,” he said, if they’re dealing with personal issues, for example.

While some teachers may have found this system helpful, Angela Dancey, a senior lecturer at the University of Illinois Chicago, said she would not want to use the Intel system.

“I think most teachers, especially at the university level, would find this technology morally reprehensible, like the panopticon.”

Financial corner

Salsify was valued at $2 billion after raising $200 million to build inventory management products for retailers.

Observe.ai raised $125 million from Zoom and other investors for its natural-language-processing tools.

Obsidian Security raised $90 million to help companies identify and fix SaaS security risks.

Silverfortraised $65 million to connect identity management across IT systems and environments.

Around the enterprise

Alibaba’s cloud computing operation, once expected to challenge the Big Three in scope, is struggling under the weight of new regulations in China that favor state-backed companies, according to Bloomberg.

A senior Pentagon IT official resigned, complaining that the slow pace of the federal bureaucracy is causing the military’s technology prowess to fall behind private-sector companies.

OAuth tokens stolen from Heroku and Travis-CI were used to download data belonging to npm users on GitHub, GitHub Security said in a blog post.

The Big Three cloud providers might be considered “critical infrastructure” if proposed legislation is brought to Congress for consideration and passed, according to Nextgov.

A MESSAGE FROM LENOVO

Lenovo’s broad portfolio of end-to-end solutions provide organizations with the breadth and depth of services that empower CIOs to leverage new IT to achieve their strategic outcomes. Organizations also have the flexibility to scale and invest in new technology solutions as they need them.

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