Optimizely adds real-time customer data tracking with Zaius acquisition

Optimizely, a provider of tools for building websites and applications that drive digital experiences, today announced it has acquired Zaius to add a customer data platform (CDP) to its portfolio. Terms of the acquisition were not disclosed.

The addition of a CDP that tracks user behavior in real time will enable organizations to create digital experiences that are personalized down to the individual level, Optimizely CEO Alex Atzberger told VentureBeat.

Zaius is able to accomplish that by creating a predictive model using a neural network that analyzes the data an organization collects about each user to determine, for example, what products they are likely to purchase next. Atzberger said this insight makes it possible to surface a highly personalized online experience in real time.

That specific capability is what attracted Optimizely to Zaius, Atzberger said, adding, “Not all CDPs are structured the same.”

Vendors offering CDPs range from Salesforce, Adobe, Microsoft, Teradata Oracle, and SAP to a host of smaller rivals, such as Segment and Emarsys. However, Atzberger said a CDP platform that is integrated with the web platform organizations are employing to build digital experiences offers a strategic advantage over a CDP that might be integrated with a customer relationship management (CRM) application.

Zaius also comes with 50 prebuilt connectors for pulling data into the platform, in addition to providing over 120 predictive models for analyzing user behaviors, Atzberger noted.

Optimizely has gained traction via a platform for building websites and applications that incorporates feature flagging, also known as feature toggles. This software development technique enables specific functionality to be turned on and off during runtime without deploying new code. That capability makes it easier to either test certain capabilities on a segment of end users or only make specific features of an application available to a subset of those end users.

By acquiring Zaius, the company can extend that capability all the way down to a specific end user as part of a larger digital experience management (DEM) strategy, Atzberger said.

As organizations continue to invest heavily in digital business transformation initiatives to engage customers directly online, interest in CDPs has risen. Most recently, digital experience management software provider Sitecore acquired Boxever to gain a CDP. It’s not clear whether we can expect a wave of CDP mergers and acquisitions, but there are a host of standalone CDP platform providers. Many organizations are looking to consolidate the number of vendors they need to engage to drive their digital business transformation initiatives as part of an effort to reduce integration costs.

In the meantime, a report MarketDigits published last week predicts the CDP market will grow from $2.4 billion in 2020 to $10.3 billion by 2026, representing a compound annual growth rate of 34%. In general, CDP is considered a type of data warehouse that includes tools to address everything from personalized recommendations using predictive analytics to marketing data segmentation, customer retention and engagement, data monetization, and data enrichment.

Most organizations are data-rich today because of the investments they have made in platforms such as data warehouses, Atzberger noted. However, those same organizations are often “insight poor” because they lack the tools and expertise required to analyze that data within the context of real-time customer engagement, Atzberger added.

It’s too early to say how many organizations will need to invest in a CDP. However, there is a pressing need to harmonize customer data that today resides in multiple application silos, especially as those customers begin losing patience with vendors that don’t understand their preferences.