A few short years ago, the concept of a Composable Customer Data Platform (CDP) was nowhere to be found in industry discourse. But today, things have changed. Composable CDPs stand firmly entrenched in the industry, proving its effectiveness time and again. The emergence of Composable Customer Data Platforms (CDPs) has reshaped the way businesses approach data infrastructure. With traditional monolithic CDPs giving way to more flexible and modular solutions, understanding the key aspects of Composable CDPs is essential for businesses looking to maintain a competitive edge. In this blog post, I’ll outline the five key points you need to know about Composable CDPs.
Composable CDP runs on your own data infrastructure.
Composable CDPs revolutionize the management of customer data by breaking free from the constraints of proprietary systems. Unlike traditional CDPs that often require businesses to store their data within the platform’s infrastructure, Composable CDPs operate on the principle of data sovereignty. CDP stores no data and instead integrates with your existing data assets, allowing you to avoid long implementation times. Your organization already has data storage like a data warehouse, which should be the underlying storage layer that powers your CDP use cases. By running on your company’s own data infrastructure, Composable CDPs offer complete control, security and scalability. You do not need to rely on another vendor. Compared to traditional CDPs, which often face challenges in achieving HIPAA or data-residency compliance, Composable CDPs breeze through compliance requirements. This ease stems from the secure and tightly governed nature of data stored within your warehouse. This approach not only leverages existing investments in data infrastructure but also ensures compliance with data governance policies and regulations. Businesses can make use of the full potential of their data assets without being bound by the limitations of external platforms, paving the way for agile data management strategies.
Modular Architecture Promotes Flexibility:
The modular architecture of Composable CDPs brings a new era of flexibility in customer data management. Every company has their own data infrastructure before buying a CDP. The Composable CDP works with the data you already have and then adds any extra features you might need. By breaking down the various components of the CDP stack, such as event collection, identity resolution and data activation, businesses gain the freedom to mix and match solutions according to their specific needs. This modular approach not only mitigates the risk of vendor lock-in but also fosters innovation and creativity. Organizations can seamlessly integrate best-of-breed technologies and adapt to evolving business requirements without undergoing costly and disruptive migrations. Interoperability between different components ensures smooth data flows and enables seamless collaboration between different systems, empowering businesses to achieve maximum value from their data ecosystem.
Composable CDP is Schema-Agnostic:
Unlike CRMs that revolve around contact lists or CDPs that revolve around web events, Composable CDPs embrace a schema-agnostic approach, allowing businesses to structure and organize their customer data according to their unique requirements. Unlike traditional CDPs that have rigid data models and predefined schemas, Composable CDPs accommodate diverse data structures with ease. This flexibility enables organizations to represent complex relationships, hierarchies, and attributes within their data, facilitating more granular segmentation and analysis. By using a schema-agnostic approach, Composable CDPs empower businesses to adapt to changing market dynamics, evolving customer behaviors, and emerging use cases without constraints.
CDP is Cost-Efficient Through Unbundled Pricing Models:
Composable CDPs offer unbundled pricing models, allowing businesses to pay only for the features and services they utilize. Many companies choose to adopt a more modular Composable CDP architecture, assembling individual components like event collection or identity resolution around their existing infrastructure rather than buying into an all-in-one platform. This eliminates the need to invest in redundant functionality, resulting in significant cost savings.
Moreover, by leveraging existing data infrastructure and investments, Composable CDPs minimize the need for costly migrations or infrastructure upgrades. Businesses can optimize their IT budgets, allocate resources more efficiently, and achieve a higher return on investment (ROI) with Composable CDPs.
CDP is Easy To Implement:
The implementation process of a traditional CDP can take between 6-12 months,but implementing a Composable CDP is straightforward, thanks to its inherent flexibility and compatibility with existing data infrastructure. Unlike traditional CDPs that often require lengthy deployment processes, Composable CDPs streamline the onboarding process. By leveraging existing data assets and infrastructure, businesses can rapidly integrate a Composable CDP into their existing environment without disrupting ongoing operations. With technologies like Reverse ETL, you can basically circumvent the entire implementation process and start activating your data immediately. This reduces time and costs associated with deployment, and enables organizations to start deriving insights and value from their customer data more quickly.
Embracing the Composable CDPs paradigm represents a strategic shift towards data agility, empowerment and efficiency. By understanding the key points of Composable CDPs, businesses can navigate the evolving data landscape with confidence and clarity. As more businesses adopt composability, the strategic adoption of Composable CDPs represents not merely a choice but a strategic imperative for organizations seeking to thrive in the digital era.
