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Analyst Blog

Microsoft Corporation (MSFT - Free Report) and Adobe Systems Incorporated (ADBE - Free Report) have collaborated to ramp up their stake in the creative cloud space.

In a joint declaration yesterday, the duo confirmed that they are integrating each other’s cloud computing products to offer advanced data-driven sales and marketing capabilities to clients.

More About the Partnership

Per the terms of the partnership, Microsoft Azure will host Adobe’s business software tools that include Adobe Marketing Cloud, Adobe Document Cloud and Adobe Creative Cloud. Adobe Marketing Cloud in turn will host Microsoft’s Dynamics 365 business applications.

In short, Azure is now the “preferred cloud platform” for Adobe products and Adobe Marketing Cloud the “preferred cloud platform” for Dynamics 365 product.

The two companies are partnering on data integration so as to offer customers a powerful and advanced marketing service. This will enable them to work on Dynamics 365 business applications and Adobe Marketing Cloud.

MICROSOFT CORP Price

Our Take

We believe that by integrating their cloud offerings, the two companies are trying to put up a joint effort to leapfrog other public cloud vendors such as Amazon.com, Inc. (AMZN - Free Report) , Alphabet Inc. (GOOGL - Free Report) and salesforce.com, inc. (CRM).

Notably, the deal is not exclusive and thus the extent of benefits that each company will derive is not clear. Adobe already has similar deals with Amazon and SAP.

However, the scales seem to be tilted slightly in favor of Adobe. This is because Adobe’s customers will now be able to utilize Microsoft’s capabilities in machine learning, artificial intelligence and advanced analytics around their marketing cloud data.

Zacks Rank

Currently, Alphabet is a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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