Since the late 90s, if a company wanted to know more about their virtual users, tags were the way to go. However, that’s all starting to change.
Client-side tags are falling out of favor in a significant way. With the rise of smartphones, legislation over data, and the emphasis on customer experience, tags can’t keep up with modern e-commerce. Instead, companies are starting to lean on server-side data to get the information that they need.
Major players, even those who formerly relied on tags as a core part of their business, are starting to make a move to server-side and away from tags. By studying these major players, we can find out a lot about server-side and how it provides a multitude of benefits for users and businesses alike.
Although many companies are moving away from client-side tags because of security concerns, there are also plenty of other benefits of embracing server-side data. From better innovation to an improved customer experience, there are many reasons for businesses to take their information server-side.
In this article, we will take a look at three major players in business: Netflix, PayPal, and Capital One.
Why these major players moved away from client-side tags and how it has strengthened their business:
Netflix: Better Customer Experience
When it comes to online entertainment, you can’t get much bigger than Netflix. Despite Amazon’s push to take over streaming, Netflix continues to lead the way.
Since their start in 1997, Netflix took over the home entertainment and streaming, pushing out even the behemoth of the time, Blockbuster. Netflix currently enjoys 148 million paid memberships that are spread out over 190 countries.
They famously offered a $1 million reward to any developer that could come up with an algorithm that could make their predictions 10% more accurate. It took three years, but a team finally came up with the magical algorithm. Netflix paid the prize… and promptly trashed most of the algorithm.
Why?
During those three years, Netflix changed considerably. They started as an online movie rental business, but they had found their true niche: video on demand. Customers were streaming their movies now, and Netflix needed to find a way to make their site as fast and user-friendly as possible.Their goals no longer had to do with predicting their customer’s desires because they were streaming enough movies that they could confidently make recommendations without issues. Instead, they needed to make streaming as seamless as possible. If it took their customers too long to pull up their TV show or movie, they would likely lose out on their business.
To improve the customer experience, Netflix began to look at their use of client-side data. Because they needed to use so much customer data, they realized that client-side data could be slowing down their performance.
They were right.
However, no one expected how beneficial it would be for the company. They reported a 50% performance improvement on their landing page as a direct result of removing client-side tagging and moving it to the server.
Because server-side requires less code, Netflix users were able to get information loaded faster than ever. Netflix, on the other hand, are still able to collect valuable data that they need to provide the best level of the customer experience through their hundreds of A/B testing.
PayPal: Faster and More Efficient Development
PayPal is central to the world of making online payments. As the online alternative to checks, it is one of the leading technology platforms and was valued at $98.2 billion in 2018. It’s spinoff app, Venmo, has become so popular it’s become a verb in the Millennial and Gen Z lexicon: “Venmo me."
Because of the nature of their corporation and the innovations that they were trying to roll out, PayPal needed to work faster than ever. The leadership wanted to find a way to develop their website and applications more effectively and not have to hire a large team to do so.
Some of the developers from Netflix joined the team at PayPal at this point and were singing the praises of server-side over client-side tags to create efficiency. The leadership was a bit skeptical that it really could do everything that the former-Netflix employees were saying and weren’t willing to change their whole development based on a theory. They decided to do a “bake-off” between two development teams. They created a larger, client-side development team and a smaller, server-side team and had them build the same application.
PayPal was shocked at the results. Even with the smaller team, the server-side finished their application much faster than the competing team. They were convinced: client-side was no longer the way to creating efficient applications.
Since then, PayPal has continued to develop and innovate using server-side. They released KrakenJS, which gives an extra layer of security and scalability to the server. As they continue to innovate and develop, they lean on server-side for greater efficiency.
Capital One: Cost-Effective Cloud Computing and Increased Innovation
Capital One thought that they already had a decent plan in place for their data. They had spent nearly 20 years building up a traditional model, and the thought of moving away from what seemed to be more work than it was worth.
However, CIO Robert Alexander knew that innovation is critical to avoid becoming redundant. He encouraged the IT department to act more like a startup than the giant corporation that they were. They embraced the concept of open-sourced development and were willing to experiment and see whether it could help them.
Initially, they were attracted to moving some of their data server-side because they wanted to improve the efficiency of their applications for auto loans. It was then they realized, though, how much their business could save by moving to the cloud.
When they moved the information server-side on the cloud, they also found that not only were they saving money, but their server response time significantly improved.
Because of the ease that their developers could work to implement ideas and improved efficiency as they moved away from client-side, Capital One developers became more innovative than ever. They no longer had to worry about the consequences should an idea not work out for their corporation.
Now, developers are more willing to take chances and potentially make mistakes. They know that they can learn from their mistakes and quickly create something even better. As a result, Capital One is more creative and growing faster.
Moving Away from Client-Side Tagging for a Better Business
When businesses move server-side, they usually consider the security benefits. The advantages don't stop there, though. As these three significant players show, it can make business faster, more efficient, and cost-effective.
When a major player is willing to change the structure of their online business that was already profitable, you can bet that they have compelling reasons. Their outcomes also shows tremendous results and how it has taken their companies to new heights with their customer experience, innovation, and cost-effectiveness.
If you’re looking for ways to grow your company (and who isn’t?) it might be time to take a page from these corporations and consider moving away from client-side tagging. You’ll be surprised how much it can improve your business.
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