Editor’s note: Adobe and Microsoft partner up in a series of moves that are strategic on multiple levels, as each company looks to simplify complexities of front- to back-office systems while fending off competitors such as Salesforce, Oracle and SAP.  

HAMPTON, N.H. – Adobe and Microsoft announced last week an update to their strategic partnership, specific to CRM and customer engagement.

Adobe Experience Manager, a leading content management solution and Adobe Marketing Cloud component, is now integrated with Microsoft Dynamics 365, a CRM system tailored for supporting sales and lead management needs of the largest enterprises. While details are still forthcoming, the move is another in a trend whereby enterprise technology vendors operating in high-growth segments (e.g., customer experience [CX]) and mature segments (e.g., CRM) opt to integrate suites that are highly complementary, with very little overlap, if any.

[VIDEO: Watch a video about Microsoft and Adobe announcing a partnership targeting Microsoft Azure and the cloud at https://www.youtube.com/watch?v=GLxoAk0ul70 ]

These moves are strategic on multiple levels, as each company looks to simplify complexities of front- to back-office systems while fending off competitors such as Salesforce, Oracle and SAP, each of which offers competitive stacks. 

  • Extension to platform integrations

Integrations between Adobe Marketing Cloud and Microsoft include:

• Adobe Campaign integrated with Microsoft Dynamics 365 provides tools for customer cross-channel campaigns.

• Adobe Audience Manager enables segmentation and ad targeting on Microsoft Bing.

For the short term, TBR believes integration between Adobe and Microsoft to support large enterprise clients is a viable alternative to acquisition and consolidation — a small possibility, expected in the next 12 to 24 months — based on success of the alliance. Microsoft and Adobe’s technology integration will address customers’ greatest challenges in CX technology adoption: Although some customers would like integrated systems across one vendor’s CX offerings, they have been mixing and matching technologies across different vendors that serve their unique needs.

  • Vendor ecosystem impact

In TBR’s digital marketing technology customer research, incidence rates across most CX technology vendors have increased as customers built out their CX technology stacks to include many different offerings. Prebuilt integrations across two leading vendors will make the process easier, especially with competitors such as Oracle and Salesforce still lacking technology stacks with integrations between their own offerings. The integration of marketing and sales suites by Adobe and Microsoft mirrors a similar move by midtier players Marketo and Infor.

With a joint go-to-market, Infor’s sales-enablement technology (i.e., CRM) integrates with Marketo’s marketing automation suite. Since being taken private in 2Q17 by Vista Equity Partners, Marketo also entered a partnership with Google (Nasdaq: GOOG) leveraging Google’s cloud infrastructure, offering synergies similar to Adobe by opting to leverage Microsoft Azure for its CX suite. TBR believes market traction via integrations and joint go-tomarket initiatives may result in M&A across any of these partnerships.

According to TBR’s digital marketing technology customer research, Adobe and Microsoft are within the top six (also including Oracle, Salesforce, IBM [NYSE: IBM] and SAP) in adoption across the digital marketing technology market, including in the programmatic marketing, data management, media and content management, core marketing, and marketing operations and analytics subsegments. Similar to most vendors, the two experienced increased incidence rates across customers’ CX stacks, indicating increased usage, if not increased market share. Adobe Marketing Cloud, Adobe Advertising Cloud and Adobe Analytics Cloud are double-digit revenue growth segments.

TBR anticipates Adobe’s CX triumvirate will collectively reach $2 billion in revenue for 2017, growing 25% year-to-year. Meanwhile, Microsoft’s 365 Suite, which includes Dynamics CRM and ERP, represents business units in more mature segments. TBR estimates Microsoft 365 will generate single-digit growth in 2017.

(C) TBR