1. Significance for ActionIQ. Although ActionIQ has been a significant CDP since its founding in 2014, the company was always a bit different from most other CDPs. Rather than starting as a tag manager or messaging platform, ActionIQ’s roots were in big data technology: co-founders Tasso Argyros and Nitay Joffe were, respectively, the founder of big data engine Aster Data (purchased by Teradata in 2011) and a leading data engineer at Facebook. Not surprisingly, the company’s approach to CDP was also driven by data technology: in particular, it used in-memory storage to support high volume, real time use cases. In recent years, the company evolved its technology to offer component-based and warehouse-native options in addition to a conventional integrated CDP.
The company’s business results were less stellar than its technology. It primarily targeted large enterprises that could most benefit from its sophisticated approach, and had reasonable success in that market. But, despite raising a hefty $144 million (per Crunchbase), growth stalled in recent years. Headcount, which stood at 208 in mid-2021 (per LinkedIn) has declined steadily since then and last week was 161. We don’t know whether sales also fell; it’s likely that the headcount reductions reflected preemptive belt-tightening as new funding became less available, rather than tracking an actual revenue decline.
Either way, it doesn’t seem that ActionIQ was on a path for substantial growth as an independent company. So a sale to a friendly buyer like Uniphore makes good sense. I’m told that the ActionIQ product itself will continue to be sold, supported, and developed, so it’s a good outcome for ActionIQ customers as well.
2. Significance for Uniphore. I’ll admit I wasn’t familiar with Uniphore before this deal, even though they are in fact a well-established, fairly large company (founded in 2008, 800+ employees, $621 million in funding). Their specialty has been speech-related customer experience tech, such as self-service, phone agent and sales assistance and conversational analytics. Like others in that industry, they are currently focusing on enhancing their products with AI to improve worker productivity and business results.
What’s more interesting is where they differ with the competitors, which is a greater focus on the data infrastructure needed to support AI. This is where the ActionIQ acquisition makes sense, since it will help to support what Uniphore calls the “Zero Data AI Cloud”. As the name suggests, Uniphore’s vision is to provide AI systems with data without first exporting that data into a separate database. This is the “zero copy” or “warehouse-native” approach that’s increasingly popular in CDP circles. It’s also something that ActionIQ has evolved to support, so the acquisition is strategically sound. As you’re probably aware, Uniphore also announced its acquisition of Infoworks at the same time as the ActionIQ acquisition. Infoworks is an even more technical vendor, dedicated to managing cloud data migrations. At 75 employees and $71 million in funding since it was founded in 2014, it's smaller than ActionIQ but still a substantial business. Like ActionIQ, its head count has also fallen in recent years, from a recent peak of 112 in early 2023.
Uniphore’s pivot to AI data infrastructure seems like a good move, at least compared with the hugely overcrowded AI-based CX marketplace. I think “pivot” is a fair term here, since Uniphore’s earlier acquisitions – Hexagone and RedBox in 2023, Colabor in 2023, and Emotion Research Labs in 2021 – all firms applied AI to more conventional CX use cases, such as emotion detection and conversation analysis. Of course, the data infrastructure space itself is the playground of major cloud companies like Google and Amazon, as well as cloud data firms like Snowflake and Databricks. Whether Uniphore can carve out a unique niche for itself as a tooling provider to connect those systems is uncertain but it seems worth a try.
As an aside -- I don't think a true "zero copy" approach to AI data is really possible. We had this debate in the early years of the CDP industry, when companies including Salesforce and Adobe argued they could assemble customer profiles on the fly without a persistent database. They ultimately learned that didn't work. This doesn't invalidate Uniphore's strategy, even though the actual implementation will almost surely involve extracting, cleaning, and reorganizing data and storing the results somewhere that AI systems can use it. That "somewhere" could in fact be a data warehouse -- the approach favored by composable CDP vendors. This might more accurately be called "one copy" than "zero copy," although it wouldn't sound as appealing.
3. Significance for the CDP Industry. ActionIQ’s decision to sell to Uniphore obviously says something about the prospects for independent CDP vendors, but the implications are limited because ActionIQ’s technology was atypical. In fact, since ActionIQ already supported the “composable” and “warehouse-native” approaches that are often touted as successors to traditional CDP systems, you could argue the deal indicates that prospects for firms taking those directions are more limited than their advocates believe.
Given ActionIQ’s unique situation, I don’t think this deal presages a sudden burst of exits by mid-tier CDP vendors. Even though growth has largely stalled for those firms, I think most can keep afloat long enough to find their footing in a new world. This footing may well differ for different firms: for example, we’ve seen Lytics attempt to simplify CDP deployment enough to make it accessible to smaller businesses, while mParticle is moving more in the direction of combining customer data with analytics. All need to dodge the giant cloud, cloud database, marketing cloud, and messaging vendors who are trampling the heart of traditional CDP territory. Some will indeed take shelter within larger organizations like Uniphore. Others may stay independent but retreat to niches such as data management tools or serving specific industries. So even though the market for traditional, integrated CDP products is likely to shrink, I believe most of the vendors will survive in some form or another. This is because the fundamental need driving CDPs – the need for unified, accessible customer data – will only grow stronger. Companies that find a profitable way to meet that need will be able to thrive over time.
