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Segment Unveils a Suite of Platform Updates During CDP Week
by Daniel Newman | October 23, 2020

The News: SAN FRANCISCO, Oct. 19, 2020 (GLOBE NEWSWIRE) — Segment, the world’s leading customer data platform (CDP), today announced a suite of new platform updates designed to give enterprises the speed, flexibility, and agility needed to thrive as digital-first organizations and meet the real-time, hyper-personalized expectations of consumers. The announcement was made at CDP Week, a week-long event designed to help companies create superior customer experiences using first-party customer data, and comes on the heels of the news that Twilio has entered into a definitive agreement to acquire Segment to create more personalized, timely and impactful engagement across customer service, marketing, analytics, product and sales. Read the full news release here.

Analyst Take: The past couple of weeks have been big for not only Segment, but the Customer Data Platform category as a whole.

The $3.2 billion deal for Twilio to acquire Segment served as a massive indicator that the CDP category has hit a new peak in its maturity and that 2021 should be a very important period for its continued growth. This, of course, is on the back of a 2020 that has been ripe with uncertainty and shifting consumer behaviors as a byproduct of the global Covid-19 pandemic and the continued growth of digital commerce.

This week, at CDP Week and Segment Analyst Day, I had the opportunity to hear about the company directionally as well as some deeper insights into a number of new releases that the company is making for its platform to guide customer adoption and value from the company’s CDP.

Segment Announces Tools to Support Scale and Drive Customer Growth

The company spent a lot of time focusing on the new demands being created by the pandemic. This means digital-first is even more important and that enterprises must be able to support this shifting demand. I believe this will require greater investment in evolving revenue streams to support a more digital journey, the incorporation of machine learning and AI wherever possible and a disciplined approach to meeting consumer privacy and compliance that is in a constant state of change. All of this, of course, has to be done with greater personalization and in real-time. This is a significant burden on companies.

To address these challenges, the company’s CDP week announcement of platform updates included simplifying development, improvements to identity management and a new approach to data preparation for machine learning. Here are the company’s platform updates (per release):

  • New low-code features for business teams: Brands require continuous and agile experimentation to optimize the customer experience, but dependencies on engineering resources or app release cycles can leave these critical initiatives in backlog for weeks or months — leading to missed revenue opportunities at a very critical time. Edge Functions allow brands to enrich and transform mobile app events instantly as they flow into Segment, while Destination Actions give users the ability to better control the behavior of their data in downstream data destinations.
  • Flexible identity resolution: No two businesses have the exact same customer journey. Unlike the black boxes of other CDPs, Segment’s Identity Configuration UI gives businesses the ability to easily define their user identity resolution rules to achieve an accurate single view of the customer to power personalization.
  • Data preparation for machine learning: Data lakes offer companies a faster path to creating cutting-edge customer experiences using machine learning. Segment Data Lakes significantly reduces the time spent cleaning and preparing customer data for machine learning, so companies can connect their data to a Data Lake and instantly drive advanced analytics and AI initiatives.

I believe, from a technology standpoint, these are important additions for the company’s CDP. Low-Code is becoming a standard on so many tools and the ability for business and software users to queue insights will continue to gain importance.

Additionally, the user identity issue is problematic based upon both differing journeys and the desire to streamline identities, which can be riddled with complexities from incomplete data to duplication and difficulties assigning identities to actions in real-time.  I also think the Segment Data Lakes strategy is sound as this is something many companies are trying to take on, but for Segment users this can streamline the process of ingestion and data prep in the cloud to work more effectively in Segment’s CDP.

A platform for the privacy-first world

Privacy was another focus area for the company in its CDP Week presentations to analyst. This is an area that I would have been concerned had it not been a key focus for a CDP vendor.

Here are the privacy focused announcements that the company released:

  • Comply with local data regulations: As more countries around the world pass privacy and data residency laws, Segment will introduce new functionality to help customers control their data collection, starting with the ability to configure endpoints to collect data exclusively in APAC, EMEA, or in the US.
  • Keep up with browser changes: As companies navigate new browser developments like Safari Intelligent Tracking Protection (ITP) and the death of the third-party cookie, In-Domain Instrumentation makes it easy for companies to collect user data via their own domain, without any proxies or additional infrastructure. This helps them to stay compliant with browser updates while saving time and costs.
  • Align with IDFA restrictions: At this year’s WWDC, Apple intends to make a number of privacy-related changes around the IDFA (Identifier for Advertisers). Segment continues to support privacy-first changes and intends to release updates to its SDK and integrations to enable customers to easily adapt to these changes.
  • Limit PII visibility by default: Customer data collection can sometimes contain sensitive information about users. As of today, all personally identifiable information (PII) is automatically masked within the Segment application, unless workspace owners are explicitly granted access.

All of these announcements are critical as I see it. Privacy and compliance aren’t fads, and the expectations of organizations to manage and respect customer data and privacy will continue to grow with more regulation likely to come.

The approach by Segment here to also manage the browser updates, Apple’s IDFA restrictions and PII visibility are all potential cracks in the customer data and journey management. Being able to keep up and adapt to these changes will be important to the future of Segment, CDP providers as a whole, and perhaps even more so to the enterprise CDP user. I suggest companies investing in CDP become familiar with the growing privacy and data management complexities and discuss these at length with potential providers.

Overall Impressions of Segment Analyst Day and Updates to Segment CDP 

Segment has had a solid few weeks and I’m confident the likely marriage with Twilio will further enhance the business in the future.

The announcements during its CDP week addressed important customer needs and I expect the company to continue to gain momentum as the category grows in entirety and the company continues to innovate to meet dynamic customer needs.

Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice.

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Image: Segment
Daniel Newman