What Segment’s Acquisition Means and the Opportunity for Data Standardization
It’s likely you saw that Segment, the leader of the Customer Data Platform (CDP) category, is being acquired by Twilio in a 3.2B all-stock deal. This effectively doubles their valuation from their last funding round from a little over a year ago in April 2019. The thesis behind this acquisition signals the value behind companies focused on data standardization and reduction of data silos.
As someone immersed in this space, I can’t help but see the similarities between Segment and Datazoom: where Segment captures, standardizes, and routes customer data from end-users’ digital touchpoints, Datazoom does the same across video’s touchpoints, which includes the end-user’s application. While Segment’s data is primarily used by marketing teams to improve customer identification and segmentation, Datazoom is used by product, engineering, and infrastructure operations teams to improve observability and optimization efforts. Both are focused on leveraging data to make it actionable for their audience.
I’m so glad Segment has been recognized for the value they bring to customer data, but the opportunity for data standardization is still much larger.
The vision behind Twilio’s acquisition of Segment is to be able to gain a more complete understanding of the customer (Segment), and leverage that data to act intelligently based on those unique insights (Twilio). The challenge to apply what these two companies have built so far to the world of streaming video is that the relevant data needed to take action comes from an ecosystem that hasn’t been explored by Segment — it’s data created by video players, CDNs, ad servers, encoders and other pieces of an end-to-end system. Furthermore the actionability of video data extends far beyond only the content publisher – to really drive value and improvements with data in the video space will require not only data standardization but real-time industry alignment and coordinated actions across an ecosystem of third party vendors, cloud solutions, and internet service providers.
Additionally the volume of data created by these systems, and the speed at which this data needs to be leveraged, is best served using a different infrastructure and business model than the current CDP model. To be generous, a CDP might log 15 events per customer interaction. By comparison, you might track 120 events across the end-to-end video delivery for a 2-minute video. Twilio claims that they will be close to powering 1 Trillion customer engagements this year. By comparison, Youtube alone will stream 1.8 Trillion videos this year. That’s not including other industries incorporating video beyond media & entertainment, such as distance learning, remote work and telehealth.
With the OTT video market projected to reach $169.4 billion by 2023, better harnessing video data is critical to understanding viewers and content engagement, improving and measuring video advertising, and optimizing the end-to-end workflow for improved efficiency and streaming experience. And this is just the Media & Entertainment vertical. Video is becoming a service within other verticals such as Education, Remote Work and Telehealth.
Datazoom is well-positioned to tackle the ecosystem that needs to be created around video data in the same way that Segment has tackled the ecosystem around customer data. Segment’s announcement cements even further the unique market opportunity we have in front of us in the Video Data Platform market.
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