24 Apr

How the Microsoft-Adobe Partnership Threatens Salesforce

WRITTEN BY Anne Shields

Adobe-Microsoft partnership threatens Salesforce

Earlier in this series, we discussed Salesforce’s (CRM) initiatives to grow in the consolidated and extremely competitive cloud space. In late March 2017, Adobe (ADBE) and Microsoft (MSFT) took their partnership one notch higher by announcing the collaboration of their marketing cloud and sales cloud offerings. Adobe plans to build an interactive data format that uses its marketing software suite, Adobe Experience Cloud, with Microsoft Dynamics as its sales software tool. This will enable a smooth integration of the companies’ leading software systems.

How the Microsoft-Adobe Partnership Threatens Salesforce

Let’s see how this move poses a threat to Salesforce. Adobe leads the marketing cloud space, and, according to Gartner, digital marketing hubs as well. The acquisition of TubeMogul strengthened Adobe’s position in this space. Adobe’s position in the marketing cloud space will be enhanced by the Microsoft collaboration, which industry analysts believe poses a serious threat to Amazon (AMZN), the leader in the cloud space.

This partnership could impact Salesforce, which acquired Demandware to boost its marketing cloud. Similarly, Oracle (ORCL) announced the acquisition of AddThis and NetSuite to bolster its offerings in the marketing cloud space. This merger and acquisition spree indicates the huge growth and mounting competition in this space.

Microsoft leads the enterprise software-as-a-service arena

In fiscal 2017, Salesforce’s sales cloud grew 13% to become “the first $3 billion cloud.” Excluding Demandware and Krux, its marketing cloud grew 25%.

Salesforce, which pioneered the SaaS (software-as-a-service) concept, and ruled this space until mid-2016 when Microsoft ousted it. Microsoft (MSFT), a dominant player in the cloud space, has been an enterprise SaaS leader over the last three calendar quarters. Through Adobe’s partnership, Microsoft aims to improve its sales cloud offering, Microsoft Dynamics, in the successful B2B (business-to-business) software space. LinkedIn’s acquisition also boosted Microsoft’s stance in the B2B market. New Technology, citing a Technology Business Research study, stated that five vendors—Microsoft, Salesforce, Adobe Systems, Oracle (ORCL), and SAP (SAP)—are leading the SaaS space.

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