Adobe and Microsoft Azure Partnership - Much Ado About Nothing?

Microsoft and Adobe announced that Azure will be the strategic platform for all Adobe cloud applications going forward. The two vendors are pitching the news as a "massive, massive milestone" that will "enable businesses to dramatically strengthen their brands."  But for enterprise buyers of marketing technology, this is mostly hot air.

What's the partnership about?

Adobe sells several cloud software products -

Currently, the cloud infrastructure underlying these products is a mish-mash:

  • AEM and Creative/Document Clouds run mostly on Amazon Web Services
  • Analytics products run in colocation centers (or CoLos) in US/Europe/Asia, plus Adobe has it own data center in California
  • A relatively new product in the Marketing Cloud called Prime Time runs in Azure

To sum it up, Azure has only been nominally supported or not at all. 

Indeed, Adobe has been a featured customer for AWS Cloud. 

Adobe is a case study for Amazon Cloud Services

Figure 1: Adobe is a featured customer of Amazon Web Services. Source: Amazon

Now, Adobe plans to make Microsoft's Azure the preferred platform for all its applications. 

Yes, it is a big deal for Microsoft

Amazon is the dominant market leader for cloud infrastructure while Azure is a distant second. (AWS market share = 3X Azure). Adobe has arguably been the first major incumbent enterprise software vendor to go all-in with the cloud model (though others have aggressively followed suit). Obviously, landing a major software player and aggressive marketer like Adobe as a customer is a big deal for Microsoft. For its part, Microsoft will resell Adobe Marketing Cloud and make that a preferred marketing tool in its Dynamics enterprise CRM/Marketing software suite. 

But likely, nothing much changes on the ground

Firstly, there is no exclusivity in this deal. It would be foolhardy of any software vendor to completely ditch the market leader that customers prefer (AWS) in favor of Azure - particularly given that MarTech is such a competitive market with several viable options for customers.

Single-tenant Adobe tools, particularly those related to marketing technology, will continue to run in AWS. Currently, many AEM customers, even if they use Azure for other cloud services, won't want to run their AEM instances on Azure.

Secondly, you can't turn a ship on a dime. It is going to be at least 12 - 18 months from the announcement before Marketing Cloud will be Azure-enabled. At that point, heavily Microsoft-oriented enterprises among their joint customers may wish to consider Azure cloud. The companies are touting the potential benefits of having all the data on a single platform, along with possibilities of unleashing machine learning techniques for better customer experiences. Well, those are easy promises to make when it's more than a year off, and AWS can offer similar benefits as well.  

To be fair, Creative and Document clouds may move to Azure earlier than Marketing Cloud tools. Currently, some of these users complain that they get only a limited amount of storage as part of their licenses (particularly compared to what users have come to expect from consumer-clouds like Google) and they may benefit from Microsoft-scale and cheaper storage options of OneDrive. 

Finally, note that Dynamics also has a marketing automation tool but Microsoft won't be sunsetting that in favor of Adobe Campaign (a much more expensive and complex offering). Redmond itself runs a global deployment of Adobe Marketing Cloud competitor Marketo (also reviewed in our research) and they won't be migrating out of that as well.

In short, this is co-opetition of sorts between Adobe and Microsoft. Co-operate and compete with each other opportunistically, while agreeing on a flashy announcement that makes you both look good in the press.  For you the MarTech enterprise buyer, it's going to be business as usual.

Pardon my pun, but this deal is much Adobe about nothing.


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