Sep 30, 2016
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How the newest Adobe-Microsoft partnership resembles ‘Jerry Maguire’

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The Adobe Marketing Cloud logo, rendered as 3D

The Adobe Marketing Cloud logo, rendered as 3-D

Microsoft has its Dynamics customer relationship management (CRM) system, but no tools for, say, website experience or content management. Adobe has a Marketing Cloud, but no CRM.

Like a well-matched couple, the two tech giants announced earlier this week they were getting together for a more serious relationship. It seems to fit. To paraphrase a key phrase in the movie, “Jerry Maguire,” they complete each other.

In this strategic partnership, Microsoft said it will make Adobe’s Marketing Cloud its preferred marketing service for Dynamics 365 Enterprise edition, while Adobe will make Microsoft Azure its preferred cloud platform for its Marketing, Creative, and Document Clouds.

How does this complementary match-up affect the trajectories of these major players, and how will it affect the balance of power among the big marketing platforms? Last year, rumors flew that Microsoft was considering getting its own marketing platform by buying Salesforce. I pinged several industry-watchers for their takes on this latest move.

The deal “makes perfect sense for Microsoft,” Technology Business Research analyst Kelsey Mason told me via email. A partnership with Salesforce has helped Microsoft build out Dynamics’ sales component, she pointed out, and the purchase of FieldOne last year addresses customer service. Now, Adobe helps fills out the marketing need.

“It’s smart for Microsoft to hitch its wagon to Adobe, rather than trying to beat Adobe at its own game,” Mason said, noting Adobe’s growing strength in marketing and ad tech. There had been an integration between Dynamics CRM and Adobe Marketing Cloud back in April of last year, she pointed out, but this seems to be “more strategic.”

The upgraded alliance won’t significantly change Adobe’s position compared to the other major marketer clouds, she said, but it’s more than just another integration.

“Having Adobe as the ‘preferred’ marketing piece (rather than just another integration) to Dynamics,” she wrote, “gives Adobe the sales and customer service aspect that it’s missing from having a true customer engagement suite, making both Adobe Marketing Cloud and Dynamics CRM attractive to enterprise customers looking to transform their front-office business processes.”

‘All goodness’

Charles King, principal analyst at Pund-IT Research, noted that the two companies had been strategic partners for over two decades, although this steps up the alliance. They probably have thousands of mutual customers, he pointed out, and there’s nothing about “preferred” that makes it “exclusive.” In other words, they can have their cake and eat it, too.

“I expect that if Dynamics customers prefer or demand to use other marketing clouds,” he told me, “Microsoft will find a way to accommodate them.”

The partnership, IDC’s Melissa Webster noted in a recent blog post, means that Azure will replace Amazon Web Services for Adobe’s large accounts, and Adobe gets “a key ally (and a new channel – including both direct enterprise sales and partners).”

She added:

“This agreement addresses Microsoft’s marketing cloud shortcomings for enterprise customers in one fell swoop. Microsoft and Adobe plan deep integrations that will make Adobe Marketing Cloud solutions ‘native’ Dynamics 365 Enterprise applications (though Adobe branded). Microsoft is partnering with a leading marketing cloud vendor — and the only leading marketing cloud vendor that is not a direct competitor to its CRM offerings,” since Salesforce, SAP and Oracle all have CRMs.”

Webster wrote that the deal boosts Microsoft’s position vis-a-vis Salesforce and Oracle, especially since it gets access to Adobe’s experience management, digital asset management and content management tools.

“It’s all goodness for Microsoft’s customers,” she told me on the phone.

Adobe gets a better entry into IT departments where Microsoft remains strong, she added, and that entry will be accompanied by sales incentives for 365 customers.

In fact, she said, enterprises increasingly want to integrate their complementary customer-facing operations, including digital marketing, digital experience management, ec-ommerce, customer relationship management, sales and customer support.

Add in the kind of analytics and machine intelligence that Microsoft and Adobe are promising, and it looks like they could become a new power couple.

 

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