Adobe’s Marketing Cloud Continued to Rise in 1Q16

Adobe’s Marketing Cloud grew 21% in fiscal 1Q16

Previously in the series, we discussed Adobe’s (ADBE) operating segments’ performance—namely Digital Media and Digital Marketing in fiscal 1Q16. The Digital Marketing segment continued to enjoy growth in 1Q16 on the back of double-digit growth of Adobe’s cloud marketing platform—Marketing Cloud.

Adobe’s Marketing Cloud revenue grew 21% to $377 million in fiscal 1Q16. An increase in the transaction size, “multi-solution adoption” by customers, expansion as well as growth in partner-driven business contributed to Marketing Cloud’s growth. Adobe’s Marketing Cloud managed ~51 trillion customer data transactions in the past year.

Adobe stated that bookings remained strong in Marketing Cloud. The company is on its way to close fiscal 2016 with 30% bookings growth.

Adobe’s Marketing Cloud Continued to Rise in 1Q16

Adobe rules the Marketing Cloud space

A few days ago, Adobe was referred to as a “leader” by Forrester Research and the IDC in the Marketing Cloud space. Recently, the IDC ranked Adobe as a leader in its report titled “MarketScape: Worldwide Marketing Cloud Platforms 2016 Vendor Assessment.” Adobe analytics was ranked as a leader by Forrester Research in the customer analytics solutions space in 2016. Adobe Analytics is the data and analytics component of Adobe Marketing Cloud. Adobe’s position as a leader in the marketing cloud space will likely push the growth in its Digital Marketing segment.

Later in the series, we’ll discuss the increased competition in Marketing Cloud due to increased participation from Salesforce.com (CRM), Oracle (ORCL), and IBM (IBM). A few days ago, Google announced a beta version of its new enterprise marketing tool—Google Analytics 360. Although Adobe holds a dominant position in the Marketing Cloud space and Google’s enterprise marketing tool is still in its early stage of development, Google’s scale and presence is sufficient enough to cause concern for Adobe.

Adobe accounts for 0.24% of the iShares Core S&P 500 ETF (IVV). For investors interested in exposure to application software, IVV has an exposure of 8.5% to the sector.