In late September 2018, Microsoft, Adobe and SAP announced a partnership to remove data silos and give a unified customer experience. This alliance, which is a clear attack against Salesforce, aims to create a single data model for consumer data that is then portable between platforms.
This Open Data Initiative(ODI) is very interesting initiative and I would like to take readers on the journey to decipher this partnership. What kind of data does this partnership support? ODI makes it possible for behavioral, transactional, financial and operational data to come together with one data model, making it possible for the first time to have a comprehensive, real-time view of customers across all touchpoints. This means, that the data could be standard CRM data, but also information about purchase behavior and other information about customers.
I am on a quest to finding answers to more deeper questions like why did they partner? What is in it for each company, Adobe, Microsoft and SAP? Who is going to gain the most from this partnership? To answer these questions, let’s take a step back and see if we can see the bigger picture.
Microsoft ( ~$110+ Billion in Revenue, 2018)
Satya Nadella, CEO (2014 – present) has revised Microsoft’s mission statement to “empower every person and every organization on the planet to achieve more”. In the past, under his leadership, the company has partnered with Apple, IBM, Salesforce, and Dropbox. Given the Apple and Microsoft rivalry, Office for iPad was a bold step but still, the most uncharacteristic action for Microsoft was to join Linux Foundation as a platinum member in 2016.
All these partnerships are in perfect alignment with the mission statement and investors are happy, the stock price has more than doubled (from $50 in 2016 to $114 a share now) in the last 2 years. The most recent Open Data Initiative is one more step towards cloud dominance. Microsoft Azure Cloud has seen approximately 100% growth YoY, and is crossing $25B (this revenue number includes IaaS, SaaS, and PaaS revenue, whereas AWS revenue is purely IaaS) in revenue for the calendar year 2018.
Let’s dig a little deeper to gain some more insights. No cloud story is complete without bringing in Amazon and Google in the picture. Amazon was the first one to offer Cloud services and clearly had first mover advantage. Google, masters of distributed computing, with its Data First, AI First focus differentiated by offering Artificial Intelligence, Machine Learning (AL/ML) as a Service. Tensorflow is an open source machine learning framework for everyone. In addition, Google at its core believes in open source. So, they further differentiated by offering open standards and open source technologies in the cloud. This open sourcing made it possible for customers to have multi-cloud as well as no vendor lock-in.
This required Amazon and Microsoft to react. Amazon, in addition to their not-open offerings, added support for kubernetes, tensorflow etc. on AWS. A very good move by Amazon. Microsoft, on the other hand, needed a more holistic way to solve this problem. Microsoft Azure’s primary customer segment has been customers who were already on Microsoft Ecosystem ( CIFS/AD/ SQL Server). This meant that customers are locked in with the vendor and can not do lift-shift operations to go to another cloud or have multi-cloud. Open Data Initiative, platinum membership in Linux Foundation, and buying GitHub are all the steps Microsoft has taken in order to stay competitive.
“We want this to be an open framework,” Microsoft CEO Satya Nadella said during his keynote at the company’s annual Ignite conference. “We are very excited about the potential here about truly putting customers in control of their own data for our entire industry,” he added.
Coming back to our ODI discussion, ODI is a multi-cloud, no-vendor-lock-in solution by Microsoft. In this particular partnership, Dynamics 365 (Microsoft’s ERP and CRM application), Customer Experience Platform (Adobe) and C/4HANA or S/4HANA (SAP) come together to ease the pain and help make AI driven business decisions to the customer.
Adobe (~$8+ Billion in Revenue 2018)
Adobe has always focused on the creation of multimedia and creativity software products but as content marketing, digital marketing and cloud have become the reality, Adobe has following three clouds to meet to specific needs of customers.
- Creative Cloud – Creative Cloud gives you the entire collection of Adobe desktop and mobile apps, from essentials like Photoshop CC to next-generation tools like Adobe XD CC.
- Experience Cloud – It’s a collection of best-in-class solutions for marketing, analytics, advertising, and commerce. All integrated on a cloud platform for a single experience system of record.
- Document Cloud. With Document Cloud, featuring the all-new Adobe Acrobat DC, get every ounce of potential out of your PDFs from any device. From shared PDF reviews across devices to collecting the most secure e-signatures from right inside your favorite apps, including Microsoft Office.
Adobe according to Gartner’s report is a Leader in the 2018 “Magic Quadrant for Digital Experience Platforms” Oracle Marketing Cloud a clear leader with 27% market share, Adobe and HubSpot are both at 2nd position with ~14% market share in Marketing Automation technologies. This particular alliance with Microsoft aids Adobe Experience Cloud to reach a wider audience and enrich the customer experience.
SAP (~$27+ Billion in Revenue 2018)
The SAP is a German-based European multinational software corporation that makes enterprise software to manage business operations and customer relations. SAP’s ~44% revenue comes from EMEA, ~40% from the Americas and the rest from the Asia Pacific. SAP stands to gain from this partnership by potentially being able to increase its revenue in the Americas. Conversely, Adobe and Microsoft have a huge opportunity to penetrate into EMEA market even deeper by leveraging this partnership.
To conclude, based on this ODI, the Data will be stored centrally, (as shown in the picture above), on Microsoft’s Azure cloud platform. Microsoft definitely stands to gain the most since the underlying storage is always going to be Microsoft Azure. The data is able to freely move between participating applications and platforms. The companies argued that this initiative will provide more transparency and privacy controls for consumers. This partnership will make it easier for enterprises to move the customers’ data around. Definitely, through this partnership, customers get more control over their data as there is a more cohesive view of data is available with AI powered analytics. This is a step towards being more open, giving more power to users and in turn more opportunities to monetize for Microsoft, Adobe and SAP.