Microsoft, Adobe Partner on Azure and Creative Cloud

Microsoft announced that Adobe is moving its core cloud businesses—Creative Cloud, Marketing Cloud and Document Cloud—to the Azure platform.

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ATLANTA—At its Microsoft Ignite 2016 conference here, Microsoft today announced a new strategic partnership with Adobe where Adobe is moving its Marketing Cloud, Creative Cloud and Document Cloud to the Microsoft Azure cloud infrastructure platform.

With this partnership, Adobe will make Microsoft Azure its "preferred cloud platform" for the Adobe Marketing Cloud, Adobe Creative Cloud and Adobe Document Cloud, said Shantanu Narayen, president and CEO of Adobe. Adobe officials said Azure provides Adobe with a trusted, global cloud and a data platform designed for intelligent services, including machine learning and cognitive capabilities in Microsoft Cortana Intelligence Suite and SQL Server.

Under the partnership, customers of the two companies will be prepared to more readily address their digital transformation requirements and provide personalized experiences for their customers. Moreover, the companies enable users to combine the capabilities of Microsoft Azure, Adobe Marketing Cloud and Microsoft Dynamics 365—Microsoft's cloud-based customer relationship management (CRM) and enterprise resource planning (ERP) solution. Microsoft will make Adobe Marketing Cloud its preferred marketing service for Dynamics 365.

"Business leaders in every industry are focused on how to better engage their digital customers, wherever they are," said Satya Nadella, CEO of Microsoft, in a statement. "Together, Adobe and Microsoft are bringing the most advanced marketing capabilities on the most powerful and intelligent cloud to help companies digitally transform and engage customers in new ways."

Meanwhile, Microsoft officials said the two companies are collaborating on data integrations to ensure customers can easily work across Adobe Marketing Cloud and Dynamics 365 business applications, tapping into the products' artificial intelligence, machine learning and advance analytics. Customers will be able to use these integrations across Adobe and Microsoft solutions to create new data-driven sales and marketing capabilities.

Microsoft said the underlying data models will be extensible to enterprise customers, as well as third-party developers and partners, to help enrich the shared ecosystem.

"Customers today expect a well-designed, personalized and consistent experience every time they engage with a brand," Narayen said in a statement. "Adobe and Microsoft will bring together the cloud horsepower and end-to-end capabilities brands need to design and deliver great digital experiences."

Adobe last week announced its third-quarter 2016 earnings results. The company reported record quarterly revenue of $1.46 billion, representing year-over-year growth of 20 percent. Adobe's Digital Media segment revenue was a record $990 million, with Creative revenue growing 39 percent year-over-year to a record $803 million. Also strong Creative Cloud and Document Cloud adoption drove Digital Media annualized recurring revenue to $3.70 billion exiting the quarter, a quarter-over-quarter increase of $285 million. And Adobe Marketing Cloud achieved record revenue of $404 million.

"Adobe is humming on all cylinders," said Al Hilwa, an analyst with IDC. "Its decision to shift its business to a cloud subscription model has been a categorical success and serves as an example for the software industry as a whole. The company's transition has been a well-executed case of how to take a large mature business and shift it to a cloud distribution and engagement model to further enhance its value proposition."

Hilwa added that the benefits for the company have been significant, including reducing piracy and enhancing the level of engagement with its customers.

"The company's regular investments in new assets and capabilities like the Behance network and Adobe Stock have stimulated greater customer stickiness and loyalty over time," he said. "Adobe's three key businesses, Creative Cloud, Document Cloud and Marketing Cloud, are all on a growth trajectory, and the company appears to be increasing the level of synergy across these businesses."