Martech Evaluation: Decoding DXPs with TCO

Editor's Notes

• #7: All of us here know that customer experiences are a businesses lifeline and great content is their currency. In order to provide meaningful and relevant experiences to their customers, the business has to know who that customer is, what they care about, what their intent is during that specific journey and then be able to serve up the most relevant content based on these items, in multiple languages, on any device, and any channel with speed and brand consistency. Content management then becomes the name of the game as the core thing to get right to optimize omnichannel experiences that convert for the business at scale.
• #8: And as consumer preferences and expectations shift, marketers are having to find new ways to reach them with meaningful interactions and today are using an average of 9.1 channels to engage with their customers. With all of these customer journeys, on all of these different devices and channels, for multiple different offerings, and multiple geographies and languages, the amount of content required for these small team’s explodes and the content crisis is compounded for the marketing teams. Whether its pressure to create more omnichannel content, inability to find and reuse content, ensuring consistency of that content across channels, or prioritizing content efforts and the speed of which it takes to create and deliver content, it can all be daunting. And content doesn’t tend to have a long shelf-life, so marketers must think of new innovative ways to optimize their content supply chain, like the adoption of atomic content, digital asset and workflow management tools, leveraging first party customer data capabilities, and staff augmentation with generative AI to enhance their content currency and fuel omnichannel experiences that help them optimize their investments in their digital strategies. Marketers are facing content challenges every day. It’s the technology that will help them turn those challenges into commercial opportunity, but it’s the technologists who will help them make this a fruitful reality.
• #9: Sitecore’s been around for 23 years and as the second largest vendor in this space, we’ve seen what makes a digital experience strategy implementation successful, and that’s to have both the business and the technical sides of the house aligned on what they need to do and the best way to do it. For any digital strategy to be effective, organizations need to ensure that the business goals are aligned to the technical principles in order to achieve meaningful results. In DXP this is seen between the CMO and CIO organization’s partnership, where marketing comes up with the what and IT comes up with the how. You can’t have a great digital GTM strategy without a tightly coupled execution plan and as the technical landscape continues to shift as fast as consumer preferences, the tighter partnership between marketers who are looking for easy to use tools to allow them to operate in a flexible and independent way, and IT who is looking for simple APIs and documentation to optimize digital investments, is more needed than ever. And just as marketers have to keep up with a moving target that is consumer preferences, IT leaders must maintain an expertise in all of the technical trends that make serving those everchanging preferences a reality today and in the future.
• #10: So with these swift shifts in consumer preferences and technical innovations, the DXP market continues to grow horizontally, as well as vertically, and thus it becomes hard to define, which can make it harder on consumers who are trying to understand what they need to support their digital initiatives. In fact, if you Google what a DXP is and you look at just the main analysts that review this space, you’ll find three very different definitions, but one consistent shared theme is that they all have a powerful CMS at their core with inherent personalization capabilities and the API-First infrastructure to support composable additions in the realms of digital asset management, content search, generative AI, and a few others that continue to grow, all the way through digital commerce.
• #11: So, with DXP defined, now lets take a look at what some of those DXP market trends were over the past five years and how they will impact the digital first business today and in the future. First was in 2020, where platform was still king and allowed customers to purchase scalable solutions that they could grow into, which was emphasized during the pandemic as the shift to digital was expedited. This is where hybrid headless allowed for content as a service to support multi-experience strategies, agility, and quicker time-to-market by offering flexibility in content delivery modes and componentization. DXPs also became more prominent as organizations looked to compete more and more on digital customer experiences and adapt to changing market demands with varying needs for simplicity, scalability, and integration. Around the same time, cloud-based architecture was becoming more and more standard allowing organizations to focus on innovation rather than infrastructure, and APIs became strongly demanded functionalities to help organizations seamlessly integrate DXP technology with their existing enterprise architectures, leading to a focus on API design. Moving into 2021 and the second year of the global pandemic, DXPs became crucial components within complex technology stacks to enable organizations to deliver highly contextualized experiences across various channels and modalities throughout customer journeys. This saw to the increase in digital solution investments and the acceleration of each brand’s digital transformation to keep up with consumer preferences which saw a shift to composable architecture to offer flexibility and scalability which led to an uptick in those considering composable offerings over the legacy monolith platforms. 2022 then had traditional DXP vendors considering where they should focus and how to best support their customers with an integrated DXP solution, while composable continued to become the preferred approach by consumers. Customer data platforms also started to gain traction as organizations looked for a single view of the customer for digital experience improvement. These evolutions saw many DXP vendors start to acquire additional point solutions, like CDPs, to allow them to provide seemingly composable offerings to support the ecosystem’s shift in demand. This then gave rise to the future-proofed roadmap that allowed businesses to add additional capacity as their business scaled, as well as new functionalities as their strategies matured. The challenge though, was still in the integrations between these new acquired products and the mature legacy platforms. This was then a requirement in 2023 where organization’s expected composable maturity in a DXP vendor’s offerings, positioning DXPs at the center of the full content operations ecosystem to deliver contextualized digital experiences across various modalities and channels throughout customer journeys. Consumers also expected more options for business-friendly tools to help with low code and no code functionality to empower business users while reducing reliance on developer resources who could now be freed up for more high-value activities that required their unique skillsets. Software as a service and front end as a service then began to gain traction as developers looked for vendors who provided more front-end support within cloud services to simplify the headless adoption, while allowing them to focus on meaningful innovation vs. maintaining and upgrading infrastructure. Vendors also started disaggregating their CDP capabilities to provide customers with basic tracking and analytics functionalities, enhancing the utility of customer data within the DXP, and many vendors also started acquiring digital asset management solutions to support the full end to end content lifecycle from creation and collaboration through deployment. Now, in 2024, we all know GenAI is the hot topic, but there is still a lot of uncertainty when it comes to GenAI’s use cases and an organization’s readiness to effectively and safely adopt its technology. So even though this is the loudest innovation in the market, the main expectations from organization’s surround a vendor being able to provide a mature composable offering, exhibiting headless expertise to support multi-experience journeys, in a SaaS environment that enables them to action on their first party data as consumer privacy preferences continue to shift. And the last trend we have seen in 2024 is the rise of CMP, which is interesting as it seems to take the best parts of composability and marry it together to create a typical platform’s capabilities to best manage the content and campaign lifecycles from creation and collaboration through deployment and measurement. This is also one of the main areas we are seeing innovation in genAI start to take shape in the realm of prompt to content creation and even prompt to full cycle campaign management.
• #12: So, when evaluating a DXP partner in 2024, the core capability to evaluate is the CMS and namely it’s ability to manage various content types across different channels at scale and its multi-experience capabilities for presenting, orchestrating, delivering, and assembling digital experiences through hybrid or headless approaches to open up the offering to the benefits of composable architecture. Cloud then becomes a matter of preference whether you deploy a PaaS or SaaS solution, but as we’ve seen, the market is moving to full SaaS to support a greater return on investment by taking all of the system maintenance, upgrades, security, consumption monitoring and scalability, off the business to allow for more innovation and high value activities within their digital strategies. This will allow them to game plan for the future innovations to come, like how to best incorporate GenAI in a safe, secure, and efficient manner throughout their developer and marketer workstreams.
• #13: Now the challenge becomes evaluating vendors for best fit in a highly saturated market that doesn’t show any signs of consolidating. Additionally, the percent utilization of these tools has dropped from around 50% to near 30% in just a year. The right composable strategy can help with this, but for someone who has a day job and doesn’t purchase software for a living, where do you even start?
• #14: That’s where an objective third party expert can make all the difference Industry analysts focus on market and vendor research to produce objective reports that help consumers narrow that 14,000 number to just a handful or two. But these analysts have different views and approaches, so it’s important to understand how they approach their evaluations when selecting a best fist solution’s partner for you. Gartner and Forrester are the most alike. They both evaluate a vendor’s capabilities based on the market’s needs today and their viability for supporting future market needs. Where they differ is Gartner puts a little more emphasis on the vendors ability to execute on their future strategies, while Forrester focuses a bit more on that vendor’s ability to assure market adoption of their current capabilities. IDC on the other hand mainly focuses on the most impactful trends and progressions of more granular market segments and the core solution capabilities needed to support that market’s needs today. Understanding these different approaches can help you as an evaluator, objectively shortlist the right DXP vendors who are best fit for purpose for your organization.
• #15: So now that we have a background on the DXP market and can narrow the vendor landscape down to just a few fit for purpose vendors, here are some simple steps to ensure you select the best one for your current and future use cases. One of the main themes we’ve heard from our customers is that they are not looking for another vendor transaction, they’re looking for a long-term partner with a scalable solution they can count on, an extensible offering they can grow into with an aligned innovative roadmap, interoperability within their existing systems, and of course, that it can reduce tech debt, generally through consolidation of multiple CMSs and DAMs. And though these evaluations have many more steps, these five simplify the approach in promoting the right vendor selection for ensuring a successful digital transformation. First is to always start with the business outcomes for today, and three to five years out before backing those into use cases and solutions needed to support them. This is where we would highly recommend working with an expert, either a trusted partner like Altudo, or a trusted vendor like Sitecore to help consult on additional possibilities and an objective evaluation methodology. The benefit in this approach is that these folks buy, sell, and implement these types of solutions every day, and the right one will ensure you’re asking the right questions. Next is to set yourself up for success by ensuring the goals of the project are aligned between the business and technical teams, including non-starters from a technical and security side as well as must haves from a business user’s perspective and you should do that for your needs today and in the future to ensure you’re selecting the best solution’s partner for the long-term. Then do your research. Evaluate those DXP vendor’s own customer experience efforts on their own technologies and evaluate them based on your objective criteria alongside your trusted business and technical partners and those who will actually be implementing and using the systems. And finally, build your business case with your selected vendor calculating value in the way that makes the most sense to the budget owners and finance teams.
• #16: Sitecore firmly believes that technology should conform to strategy, not the other way around and that’s why we’ve spent the last 20+ years developing solutions that help our customers optimize their investments of their digital initiatives. As a leader in various categories in all three of the analysts reports, we pioneered the way the market approaches content management and personalized digital experiences and we’re proud to be the only fully cloud native end to end DXP vendor with the strongest integrations that support best of fit interoperability and high usage. We’re also the only full suite DXP vendor with a hybrid headless SaaS offering that supports both marketers and developers with the right tools to help them focus on more mission critical activities that drive meaningful outcomes with unique capabilities like WYSIWYG editing, reusable components and templates, embedded pixel perfect preview with real-time publishing and scalability at the edge. And SaaS means NO MORE UPGRADES!!!! You get the latest and greatest innovations, like embedded GenAI, as they come out with your licensed products without the need for any additional investment on your end. You pair that with the global scale and support of the second largest DXP vendor in the market and our differentiated customer success assurance programs, like Sitecore360, and you get a DXP vendor who has the strongest Hybrid Headless SaaS CMS at it’s core, an extensible offing that allows you to seamlessly scale and grow with new capabilities when you need them, seamless integrations with the rest of your ecosystem, and a customizable offering that allows you to tailor it to your digital strategies resulting in higher returns from the rest of your customer experience ecosystem and higher value of your selected DXP capabilities. So now I’m happy to turn it over to Vasiliy to walk us through best practices for objectively evaluating these types of DXP vendors in the market to ensure you’re getting the most value out of your DXP systems, but also seeing the highest rate of return when optimizing your digital experience strategies.