The DXP Catalyst Update - Jan 10, 2025

INTRO
Welcome to This Week’s DXP Catalyst Update

This week, as I prepare for the upcoming CMS Kickoff Event in Florida, I’m looking forward to escaping New York’s 20-degree weather for a couple days. The event promises to be an exciting start to the year, and I’ll be sharing insights and takeaways in next week’s edition.

Meaningful, I’ve spent the past few days starting to learn about an organization’s complex and fragmented digital ecosystem - a common and understandably frustrating challenge.

In this edition, I’ll explore some of the latest trends and observations in the DXP and MarTech world. From composable CDPs to the growing role of AI in DXPs, these insights will help you stay ahead of the curve as you navigate your own initiatives.

MARTECH & DXP INSIGHTS
Key Observations & Trends

Headless CMS Vendors Expanding into Composable Suites?

Traditionally, pure-play headless CMS vendors have focused on content delivery, relying on integrations with best-of-breed solutions for capabilities like personalization and customer data platforms (CDPs). However, recent acquisitions suggest a strategic pivot.

• In Aug 2024, Contentful acquired Nailtailed for AI-driven personalization and optimization capabilities.

• Contentstack announced acquisition Lytics, a composable CDP, just this week (deal closing in Dec 2024).

These moves indicate a shift toward positioning themselves as composable suites, competing with established leaders in the DXP market.

The Rise of Composable CDPs

Composable CDPs, designed to operate directly on top of data warehouses without duplicating data, are becoming a preferred choice for enterprises managing vast data ecosystems. This approach makes sense:

• Data warehouses serve as a source of truth, encompassing more than just customer data.

• Composable CDPs stand on top of these systems, enabling marketers to leverage this data for personalized campaigns.

While composable CDPs have been around for awhile, their popularity is surging as enterprises seek more streamlined, scalable solutions that work with their existing data warehouse investments. A recent CDP vendor analysis I did highlighted just how crowded this market has become.

SaaS Continues to Dominate the DXP Landscape

Most DXP vendors are moving toward SaaS while continuing to support legacy PaaS solutions. Recent developments include:

• Optimizely launched its SaaS CMS part as part of the broader Optimizely One suite.

• Magnolia plans to release a SaaS version of its DXP soon, albeit later than its peers.

• Acquia will soon launch Starshot, which can be seen as a SaaS version of Drupal CMS.

• Sitecore and Adobe have pushed in this direction in recent years.

• Squiz has long focused on SaaS and been ahead of the curve amongst peers.

These advancements reflect the increasing demand for SaaS, particularly among organizations seeking flexibility, scalability, and rapid deployment.

Growth in Digital Experience Orchestration (DXO)

DXO is gaining traction among enterprises with complex digital ecosystems. DXO is a zero-code platform that connects and harmonizes backend systems, data, and content into unified APIs, enabling personalized omni-channel experiences while empowering non-technical users to manage business logic and reduce reliance on developers. Solutions like Conscia are leading the charge, enabling seamless orchestration across multiple platforms without requiring custom middleware.

• DXO can help agencies and consultancies avoid over-engineering solutions and focus on value creation. An senior product management director at a global footwear and sportswear company I spoke with a few months ago emphasized the importance of agencies recognizing when to recommend a solution like this rather than attempting to build a custom one from scratch.

• For enterprises, it ensures consistently across fragmented ecosystems while driving agility and innovation.

Having spoken with Conscia’s team at the MACH Three event this past June, their offering stands out as a key enabler for enterprises seeking orchestration across their digital properties.

AI-Driven Innovations in DXPs

DXP vendors are heavily investing in GenAI capabilities across their portfolios. Use cases span the entire spectrum of DXP functionality, including DAM (i.e. automated metadata tagging and asset categorization) and customer journeys. Then there are the more obvious use cases like image generation.

While these advancements offer immense potential, the sheer volume of announcements can overwhelm organizations.

AI Agents: The Next Frontier

AI agents are poised to play a transformative role in DXPs, and MarTech more broadly, automating customer interactions, content delivery, and experience optimization. Tools like Salesforce’s AgentForce, showed at their recent event in NYC, highlight the potential for AI-driven autonomy across digital ecosystems.

Key Takeaway for IT Leaders

Navigating these trends requires a strategic approach. Whether you’re evaluating composable CDPs, consider a SaaS DXP migration, or exploring DXO solutions, the key is aligning tech decisions with long-term business goals. With the right strategy, these advancements can drive meaningful transformation, positioning your organization for sustained success.

WHAT’S NEXT
Upcoming Topics

• Next Week: A recap of the CMS Kickoff event in St Pete, FL, along with highlights from other recent events.

• The Week After: Unlocking Value in PE-Backed Consumer Brands: CIO Challenges and Strategic Opportunities.