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How Did Adobe Become a Leader in the Marketing Cloud?

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Adobe’s Marketing Cloud continues to be a leader

On March 1, 2016, Adobe (ADBE) announced that it continues to be a leader in the Marketing Cloud space. IDC ranked Adobe as a leader in its report titled “MarketScape: Worldwide Marketing Cloud Platforms 2016 Vendor Assessment.” The report stated, “Adobe has world class marketing solutions that many will prefer over alternatives.” It also stated, “Adobe should be a strong consideration for medium and large enterprises that want to reduce the complexity and increase the performance of very large scale digital marketing infrastructures.”

In fiscal 4Q15, Gartner and Forrester said Adobe enjoys a commanding position in the marketing cloud space.

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What puts Adobe ahead of its peers in the marketing cloud space?

Adobe Marketing Cloud encompasses a comprehensive set of analytics, consumer targeting, social media optimization, web experience management, and cross-channel campaign management solutions. Adobe got the earliest start in the digital marketing cloud space and is rapidly moving ahead in the integration process. Through acquisitions of Omniture, Day Software, Auditude, Efficient Frontier, and Neolane, Adobe has enhanced the functionality and product offering of its marketing platform. It has developed a comprehensive digital marketing platform that caters to digital marketers’ varied needs.

Adobe Marketing Cloud could be a $27 billion market by 2018

Adobe expects Marketing Cloud bookings to grow 30% in fiscal 2016. In its January 2016 presentation, Adobe stated that it manages ~41 trillion customer data transactions through its Marketing Cloud every year. Marketing Cloud measures 80% of all online transactions from the top 100 US retailers. As the above presentation shows, Adobe expects Marketing Cloud to have a total addressable market of $27 billion by 2018.

The expected growth in this space shows why Oracle (ORCL) and Salesforce (CRM) have aggressively turned to acquisitions over the past couple of years to strengthen their footholds in the marketing cloud space. Adobe makes up 0.24% of the SPDR S&P 500 ETF (SPY). SPY has 7% exposure to the application software sector.

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