Customer Data Platform vendor Treasure Data today confirmed earlier reports that it is being purchased by Arm Limited, which licenses semi-conductor technologies and is itself a subsidiary of the giant tech holding company SoftBank. The price was not announced but was said to be around $600 million.
The deal was the second big purchase of a Customer Data Platform vendor in a month, following the Salesforce’s Datorama acquisition. Arm seems a less likely CDP buyer than Salesforce but made clear their goal is to use Treasure Data o manage Internet of Things data. That’s an excellent fit for Treasure Data’s technology, which is very good at handling large volumes of semi-structured data. Treasure Data will operate as a separate business under its existing management and will continue to sell its product to marketers as a conventional Customer Data Platform.
While Arm is an unexpected CDP buyer, the deal does illustrate some larger trends in the CDP market. One is the broadening of CDP beyond pure marketing use cases: as critics have noted, unified customer data has applications throughout an organization so it doesn’t make sense to limit CDP to marketing users. In fact, the time has probably come to remove “marketer-managed” from the formal definition of CDP. But that’s a topic for another blog post.
A complementary trend is use of CDP technology for non-customer data. Internet of Things is obviously of growing importance and, although you might argue thats IoT data is really just another type of customer data, there’s a reasonable case that the sheer volume and complexity of IoT data rightly justifies considering it a category of its own. More broadly, there are other kinds of data, such as product and location information, which also should be considered in their own terms.
What’s really going on here is that one category of CDPs – the systems that focus primarily on data management, as opposed to marketing applications – is merging with general enterprise data management systems. These are companies like Qubole and Trifacta that often use AI to simplify the process of assembling enterprise data. These systems do for all sorts of information what a CDP does for customer information. This is a new source of competition for CDPs, especially as corporate IT departments get more involved. There are also a handful of CDP systems, including ActionIQ, Aginity, Amperity, and Reltio, that have the potential to expand beyond customer information. It’s possible that those vendors will eventually exit the CDP category altogether, leaving the field to CDPs that provide marketing-specific functions for analysis and customer engagement. (If that happens, then “marketer-managed” should stay in the definition.)
In any case, the Treasure Data acquisition is another milestone in the evolution of the CDP industry, illustrating that at least some of the systems have unique technology that is worth buying at a premium. I can imagine some of the other data-oriented vendors being purchased for similar reasons. I can also imagine acquisition of companies like Segment and Tealium that have particularly strong collections of connectors to source and target systems. That’s another type of asset that’s hard to replicate.
So we’ll see how the industry evolves. Don’t be surprised if it follows several paths simultaneously: some buyers may take an enterprise-wide approach while others limit CDP use to marketing. What I don’t yet see is any type of consolidation around a handful of winners who gobble up most of the market share. That might still happen but, for now, the industry will remain vibrant and varied, as different vendors try different configurations to see which most marketers find appealing.