Why Modern Companies Need a Customer Data Platform?

In case you haven’t already been sold on the vision and promise of a customer data platform (CDP) by the two dozen-plus vendors pitching it, here is the summary of why it is the best thing since sliced bread.

The future of marketing is 1-to-1 conversation with customers. That is only possible if your marketing team can unify every touchpoint that your customer has with your brand in one central data platform and implement your marketing actions on top of that data. Until that happens, your customers will continue to get email promotions for the product they have already bought and push notifications for things they didn’t like and have returned. Even if you have the most tolerant customers, it is still a risky way to market in 2020. Hence, you need a CDP.

For anyone wanting to know more about CDP vision and products, CDP institute (cdpinstitue.org) is a good vendor-neutral source.


Buying is the easy option when dozens of vendors are selling the vision of CDP magic – an off-the-shelf solution that requires zero hassle and can get your results in less than a week. That seems like a perfect solution, particularly if you don’t have an engineering team backing you.

But is it always the right choice?

Vendor lock-in may be an overused term but for something as important and as core to business as your customer data – centralizing it around a vendor which is 1/5th your company’s age and may not be the most pragmatic strategy.

Data lock-in is another big problem. Sure, the vendor can give you a CSV dump or API access of all your data if you ask for it but is it accessible and ready-to-use for your analytics team? Can you process the customer data in real-time? Can your data-science team use the myriad of AI/ML tools from vendors like Amazon or Google for training a recommendation engine on top of this data? Wait, you don’t have a data-science team yet? Trust me, you will have it sooner than later – most cutting edge engineering and marketing teams have started to have one already.

Thanks to the myriad of regulations like GDPR and CCPA,  you can’t ignore the issue of data-ownership and data-privacy. While you are still figuring out the implications (as everyone is), one thing is for sure – it is no longer ideal to have your customer’s data sent to 3rd party vendors over whom you don’t have much control. They are your customer and you are liable if any data is leaked or stolen.

Cost should be another big driver in this decision. Collecting and processing all customer interactions (which can easily run into billions of events easily) requires huge computing infrastructure on top of which vendors charge their margins. The end result – even for a moderately sized business (a few million users or a couple of billion events per month), you can end up shelving quarter to half a million dollars annually plus all your internal cost to actually use one. Not an easy investment to make when it can take a while to get results. 

So, what’s the way out? It’s easy to assume you can just hire a developer, feed him or her pizza and beer and alas, your CDP will be built.

Well, it may be slightly more complicated than that, but not too much either. Thanks to the advent of open-source CDP solutions as well as platforms like Kubernetes and other tools & data-systems from cloud vendors like Amazon, Google, and Azure, you no longer need a team of dedicated engineers to develop and manage this system.

Want to learn more? Talk to us @ Rudder to see how our customers are leveraging our open-source technology to put together a CDP while avoiding vendor lock-in, keeping ownership of their data and at a fraction of the cost of a commercial offering.


GitHub: https://github.com/rudderlabs/rudder-server