Microsoft Enters The CDP Fray With Its Cloud Platform And Its Own Data

Microsoft CDPThis is the eighth in AdExchanger’s “Meet the CDPs” series. Read previous interviews with mParticleAcquia-owned AgilOneAmperitySegmentActionIQ, Lytics, Bluecore, Tealium, OptimoveAdobe, Treasure Data and BlueConic.

Microsoft Dynamics, the company’s customer relationship product suite, has surged lately as it repositions itself as a customer data platform (CDP) competitor, which launched last year.

 Satish Thomas, a 14-year Microsoft veteran and head of product for Microsoft Dynamics 365, has been working fully on it for about 18 months.

Microsoft is a late mover to the CDP category, but it has important differentiators, such as its connection to the Microsoft Azure cloud platform and Microsoft’s own internal identity graph.

“It’s one thing to have unified data,” Thomas said, referencing the common CDP pitch to consolidate customer data into a single asset.

“It’s quite another thing to have device-level insights and be able to use cloud-based AI systems to derive insights like churn or lifetime value based on your unified data,” he said.

AdExchanger caught up with Thomas about Microsoft’s plans for its new CDP.

AdExchanger: What are the defining characteristics of a CDP?

SATISH THOMAS: The CDP is about collecting the data sources attached to any given individual. It’s critical to have a consolidated view of the customer, and that’s what’s driven demand for CDPs.

It’s also about enrichment with third-party data. That could be B2B businesses layering in data about where and how people work. We have a rich set of third-party providers. And from the Microsoft graph we can enrich customer profiles with aggregated information about brand affiliation, or factors like lifetime value or churn measurement.

What’s in the Microsoft graph?

It’s aggregated insights from all of our (Microsoft’s) touch points.

Specifically in the context of customer insights, we can light up aggregated signals on, say, people in a certain age, place or other demo.

Think of it like segment lookalikes. So a brand like BMW can see that their customers in Seattle have strong affinities for certain car models, and maybe index highly for fans of Formula One racing.

Does having LinkedIn as a Microsoft asset fuel what you can do with the CDP?

Not right now.

In the context of B2B, we have third-party providers like Leadspace or Madison Logic. But it’s clear to foresee how information from LinkedIn could be useful. We are focused on B2C, where there’s the most traction for CDPs, but B2B is part of the product and there will be more use cases.

What kinds of customers are you seeing traction with?

Wherever there’s a consumer at one end and the need for tracking data. Retailers and airlines are natural adopters. They have so many data touch points and parts of the overall experience they need to keep track of.

Especially in today’s times, a lot of the energy is about preventing churn. One thing I hear a lot from companies considering or using Dynamics 365 is: “Reducing churn is the new growth.”

Do you tend to work with agencies or directly with the customers advertising?

CDPs have traditionally had this marketing connotation. We see traction with marketing, but also a lot on the services side, with customer service departments, as well as in sales departments.

The need for a CDP is usually being driven by the business. Like maybe they have a priority to reduce churn by n percent, or increase cross-selling revenues by x percent if they have multiple business lines. And to reach those goals, or at least to demonstrate that they’re reaching those goals, they need a unified view of their customers.

In terms of the nuts and bolts of implementing the CDP and rolling it out, we deal with the CIO office, often a mix of the business and finance side with IT or technology and engineering within a company.

Who are your competitors?

There are the usual enterprise business application players. Often the ‘competition,’ so to speak, is an internal solution that they had built.

There are typically other companies in the mix. The businesses with the biggest need for CDPs have data everywhere – so they could have a Salesforce system, web and app analytics, vendors for CRM and customer service.

An important factor is that a lot of our CDP customers came from a place where they did not use Dynamics or the Microsoft suite, and its their first experience with a product in our portfolio.

Is the connection with Microsoft’s cloud infrastructure offering Azure an important differentiator in the CDP business?

Absolutely. I never talk about customer insights without the broader platform story.

Honestly, a lot of enterprise customers and the big wins we’ve had – even in the past few weeks – it’s about their overall cloud and data infrastructure strategy.

For example, when you build a unified view of the customer, it is your most strategic data. So with a flip of the switch we can enable them to take that unified data stored in an azure data lake. That means if there’s a scenario or application we don’t support out of the gate, that’s ok, because they can go build the use case themselves. In retail in particular you’re seeing that unified data for things like shopper marketing programs.

It’s an important differentiator that this is natively integrated and built on top of that cloud system that’s driving those efforts. I see the CDP as inextricable from those cloud infrastructure strategy discussions that are happening.

What’s the timeline for onboarding a new CDP customer?

We talk about the “five by five.” New customers can spend five minutes learning the system and five minutes to set up.

How many employees are there in the Customer Dynamics 365 unit?

We don’t share specific numbers within the Dynamics org. But it’s a big investment.

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