Regarding the term “Composable CDP”, there are varying opinions on its relevance, efficacy, and applicability to enterprise-level companies. In our blog, “Complete Guide: What Is A Composable CDP? Is A Packaged CDP Better Than A Composable CDP?”, we cover the Composable CDP, functionality, recommendations, and more. 

What Is A Composable Customer Data Platform (CDP)?

A Composable Customer Data Platform (CDP) refers to a customer data management solution designed by combining modular components from multiple vendors, heavily using Application Programming Interfaces (APIs), to achieve the same capabilities as traditional CDPs. To level set, here are a few things you should know: 

1. The “Composable CDP” concept is a marketing term, not a specific product (As MarTech.org says, “A tool itself is not composable. Architectures are composable.”)
2. A “Composable CDP” is not the same as “composability” – “Composable CDP” describes a combination of vendors and tools that mimic the capabilities of a CDP using a Cloud Data Warehouse (CDW) for centralized data storage. “Composability” is a system design principle and can be achieved without taking the approach represented by the term “composable CDP”.
3. The Composable CDP approach is built upon a Cloud Data Warehouse (CDW), leveraging multiple vendors to provide key CDP functionalities such as data collection, profile unification, segmentation, personalization, and experimentation. 

It has flexible components that on the surface look like an advantage. Unlike traditional CDPs, which are typically offered as all-in-one solutions with standardized features, a Composable CDP is touted for its ultimate flexibility and control. However, the Composable CDP can quickly become a drain on internal resources, become very costly to maintain, and ineffective if all of the pieces do not work well together.

We would also like to highlight that it is possible to have the best of both worlds when it comes to a packaged CDP and Composable CDP. With Tealium’s CDP, we give you the flexibility to work in real-time and connect to your CDW to use it as central data storage to minimize costs and simplify management. 

What Is The Difference Between Composable Customer Data Platform (CDP) And Reverse ETL?

Reverse ETL (otherwise known as Extract, Transform, Load) is a core component of the Composable CDP that accesses data from the central CDW and moves it to business systems. While a Reverse ETL solution can access data in real-time, neither a Reverse ETL solution nor the overall Composable CDP system that it powers, are able to effectively power real-time customer engagement as there are significant limitations with real-time data collection and real-time processing. With Reverse ETL, the business is limited to backward-looking customer experiences leveraging data that does not have up-to-the-second context (which is a problem when you’re trying to own the moment with customers and use the freshest data for AI initiatives). 

Let’s say a customer lands on your site, and you use a Reverse ETL solution. As that customer is browsing your site, you wouldn’t have access to incremental real-time information for personalization like the products they’re browsing, the items they’re adding to their cart or purchasing, the content they’re engaging with, etc. Instead, you’d only be able to leverage data from the historical customer relationship. This data is important but does not include the most important data of all— what they are doing right now. 

Now, let’s take the same example but pretend that you use a real-time CDP instead of a Reverse ETL or Composable CDP. With Tealium, you could identify this VIP customer as soon as they enter your site, with access to whatever they are browsing, purchasing, or engaging with RIGHT NOW to provide the best experience. Additionally, you can personalize your VIP’s experience in real-time, leading to higher conversion rates. It is important to note that Tealium works with Cloud Data Warehouses, and complements your CDW with a real-time data layer.

What Is The Difference Between Composable Customer Data Platforms (CDPs) and Packaged Customer Data Platforms (CDPs)?

When it comes to the key differences between composable Customer Data Platforms (CDPs) and Packaged Customer Data Platforms (CDPs), there are key differences. 

Architecture

A Composable CDP is built using modular components from numerous vendors. However, while this gives ultimate flexibility, you lose system reliability, support for the overall solution, and a business-friendly interface democratizing access to data. A packaged CDP like Tealium is an all-in-one solution built with modular components (adopted based on how they fit into a company’s overall architecture) that provides a full suite of pre-configured features and functionalities.

Real-Time Capabilities

As we previously mentioned, a Composable CDP relies on a CDW at the center of its functionality. As a result, it has significant limitations when working in real-time. With Tealium’s real-time capabilities, you can own the moment with customers, which is the most critical time in any customer relationship (when the customer chooses to interact with your brand). 

Customer Support

When you create a Composable CDP, you are using a multitude of vendors – each with their own customer service representatives and configurations. Sometimes, these different vendors don’t integrate well with one another, and you don’t have a unified source for help getting the kinks worked out! With a packaged CDP, you have a dedicated support team that can act as a single support source. Plus, you can work with your dedicated support team to build use cases, helping you advance faster.

Compliance

Using different vendors for a Composable CDP approach is risky for unified compliance. Who is to say that each vendor is compliant across regions or remains compliant in the face of changing regulations? With Tealium, you can use a packaged CDP that helps you collect consented data, and remain compliant with global privacy regulations.

Ultimately, this composable approach will not work for addressing many of the problems that CDPs were built to solve. We talk more about this in our blog, 6 Reasons Why Composable CDPs Miss The Mark For Enterprise Businesses.

The Fundamental Disadvantages Of A Composable Customer Data Platform (CDP)

Composable Customer Data Platforms (CDPs) aren’t the “holy grail” solution they claim to be. Where a Packaged CDP is purpose-built to connect and activate data, adopting a Composable CDP will bring additional headaches.

1. Deep technical knowledge required: Building a Composable CDP is no small feat and requires comprehensive technical knowledge. The component technologies of a Composable CDP demand technical expertise to manage each system and the overall combination.
2. Unmanageable complexity and integrations: Building a CDP from various components can quickly become unmanageable due to conflicting interfaces, protocols, and the resource-intensive task of integrating and maintaining multiple vendors and APIs. While composable CDPs promise seamless integration, they often lead to data silos and bottlenecks, whereas a purpose-built CDP like Tealium offers flexible, optimized integrations to enhance business growth and customer experience.
3. Compliance risks: With a Composable CDP, your data privacy and compliance rely upon a combination of external vendors. Each module has its own vulnerabilities and compliance standards, making it an unreliable patchwork.
4. Scalability: Composable CDPs may struggle to scale effectively as data volumes grow, leading to performance issues. This overleveraging of manual data management may increase the strain on your teams, preventing them from reaching their business objectives.
5. Lack of unified vision: A composable CDP, assembled from multiple vendors, often lacks cohesion. Conflicting roadmaps and priorities can hinder long-term support and development. A unified platform like Tealium offers clear direction and alignment with your business goals.
6. User Interface: Using a packaged CDP has a more user-friendly interface, making your data accessible to all teams and allowing less technical employees to collaborate with more technical resources. In contrast, a Composable CDP is highly technical and less user-friendly for other teams, which can make collaboration more challenging.

We dive deeper into each of these points in our blog, 6 Reasons Why Composable CDPs Miss The Mark For Enterprise Businesses. 

Why A Packaged Customer Data Platform (CDP) Is A Better Approach

A Packaged CDP like Tealium is a more sustainable, and comprehensive approach to managing your customer data. 

1. 1. Ease of Implementation: With comprehensive customer support, a Packaged CDP offers resources to help you gain a deeper understanding of the tool. Tealium’s renowned customer support offers a plethora of white-glove service, guidance, and one-on-one support for every stage after go-live.
   2. Vendor Neutrality: A packaged CDP that is neutral (not part of a larger suite of engagement tools or marketing cloud) helps you connect to your existing MarTech (Marketing Technology) stack, offering superior flexibility over the long term, with reliability. The Tealium Partner Network is composed of 1,300+ global system integrators, consultants, digital agencies, and Conversion APIs (CAPIs) like Meta, Google, TikTok, Snapchat, Reddit, and more, to drive value no matter what vendor you choose to work with.
   3. Better Time To Value: When using a Packaged CDP, you can get up and running more quickly. That means running new use cases faster and progressing with more advanced use cases at a speedier rate. 
   4. Comprehensive Data Privacy Approach: A packaged CDP offers centralized security and compliance management, reducing the risk of fragmented governance across multiple components and ensuring data privacy is uniformly enforced. At Tealium, we believe in a data privacy-first approach, where privacy and consent are thought of as the core to building trusted customer relationships.
   5. Dedicated Support: With a packaged CDP, you can get white-glove customer service from a single source. 
   6. Reduced Technical Reliance: Using a packaged CDP helps your data become more accessible across teams, and makes collaboration more effective. Essentially, it is better democratized because there’s a system intended for less technical employees to collaborate. Whereas with a Composable CDP, the vendors you use are highly technical and separate, making collaboration more difficult and siloed. 

We do a deeper dive into Tealium’s composable approach (delivering the best of both worlds from a Packaged CDP + Composable CDP perspective) in our blog.