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PHOTO: Nicolas Alejandro

The Customer Data Platform Institute has released its CDP industry report for 2018. David Raab, founder of the CDP Institute, reported that the CDP industry added 15 new vendors, 1,256 employees and $317 million in cumulative funding, a roughly 23 percent increase for each measure over six months. 

About 60 percent of the added vendors were founded in 2014 or after. "These represent," Raab wrote, "a new wave of small, purpose-built CDPs, focusing largely analysis and campaign functions." As for previous entrants, 66 percent of those companies were founded before 2014. Most of those products, Raab found, were built for other purposes and later repositioned as first-generation CDPs.

As for acquisitions, Raab predicted acquisitions are "likely in the future" because CPD vendors will become large enough "to appeal to strategic buyers." Raab cited 2018 acquisitions of major CDPs by large industry players: Salesforce acquired Datorama, and ARM Holdings acquired Treasure Data. "Fragmentation will likely increase as new vendors create niches based on industry, region, and client company size," Raab wrote in the report.

Further, the CDP vendor market will reach $1 billion for this year, Raab predicted, after a reported $740 million in revenue for 2018. Raab's $1 billion projection will account for revenue in acquired CDPs, but will not count revenue for CDP-like modules within other systems.

"Taken together," Raab added, "these developments point to significant changes in the CDP industry. Competition will increase from new, specialist CDPs and from companies offering CDP functions within larger systems. Software vendors looking to add CDP functions are likely to purchase existing CDPs to speed this process." 

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