Microsoft and Adobe are joining forces to offer cloud-based products to their respective markets which have share a lot of common consumers. This will help them compete with the likes of Amazon who are currently the leading cloud service provider.
The plan basically goes as follows, Microsoft will promote Adobe's marketing programs while Adobe will bring programs like Photoshop and Illustrator to Microsoft's Azure cloud computing service.
“This is a good, solid relationship” said Brad Reback, an analyst at Stifel Nicolaus & Co. “Bringing the two products together in a more integrated way makes the combined offering more attractive to customers.”
Both Microsoft and Adobe are trying to promote their cloud offerings, subscription-based services can be way more profitable than installed software - which they have realized since offering cloud-based services. Their main opposition being Salesforce will find this partnership hard to compete against as they both will bring out the best in each other.
"“This plugs a major hole for Microsoft,” said Rodney Nelson, an analyst at Morningstar Investment Services. “They are the beneficiary of Adobe moving onto Azure. It gives them more clout when competing for big deals instead of being a point vendor for Salesforce.”"
"Redmond, Wash.-based Microsoft reported revenue from Azure doubled in the quarter ended June 30. Chief executive officer Satya Nadella, well into his third year at the helm of the world’s biggest software company, has been reorienting Microsoft’s business around cloud and productivity services to fuel growth as traditional software sales shrink. Annualized revenue from commercial cloud products was more than $12.1 billion, a number that Microsoft has pledged will reach $20 billion by fiscal 2018"
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