Cloud by cloud, Adobe assembles a platform for creating differentiated experiences

At Adobe's Summit 2017 conference, the company made some moves to reorganize its marketing- and advertising-related cloud offerings under a single banner, unveiling the Experience Cloud as an umbrella containing Marketing Cloud along with the newly announced Analytics Cloud and Advertising Cloud.

Adobe is now competing to become the de facto platform for the business of digital marketing, and dominating its respective market as SAP does with ERP and Salesforce with CRM. The company emphasized its core domain expertise for leveraging the art of content with the science of data. Adobe has a compelling offering for businesses striving to create contextual experiences utilizing the Experience Cloud coupled with its core services platform, plus Creative Cloud and Document Cloud for enterprises. Adobe unveiled a new standard data model that makes it easy for companies to integrate content, data and intelligence into existing processes and data systems. The focus is to help customers create highly personalized experiences that are contextually aware and delivered in real-time – regardless of the device, time or location.

The company continues to invest heavily in its platform, including the earlier debut of Sensei and this month's news of integrations across clouds. And lurking in the background behind all the technology is the important relationship that Adobe has with Microsoft, which has grown to include Azure, Dynamics CRM and Power BI.


Experiences, not price or products, will be the battleground of the future. Adobe's platform will be a differentiator as companies look to leverage dynamic content, data and intelligent automation to improve customer experiences. Adobe is laying the groundwork for a long game – competing with the likes of Oracle and Salesforce as the overall platform for orchestrating customer experiences. While it remains content-focused, Adobe's commitment to connecting the Creative Cloud with the new Experience Cloud is important for its core marketing professional audience. While it is not yet in a position to meet its goal to become the dominant force across the entire customer lifecycle, it's plausible to argue that combining creative tools, big-data analysis, and ad-tech and campaign tools are a solid foundation. However, a key missing piece is the ability to launch conversational experiences across the buying lifecycle, including commerce and real-time customer collaboration tools.

Context

Adobe's digital-marketing business broke the $1bn mark in revenue in FY 2013. It grew further to hit $1.17bn for FY14, and reached $1.36bn for FY15 and $1.63bn for FY16. By the 2017 Summit, Adobe had just posted 26% YoY growth to $477m in the most recent quarter for its Marketing Cloud, which, starting with Summit, will now be called Experience Cloud and contain Advertising Cloud, Marketing Cloud and Analytics Cloud. The business now has $1.73bn in trailing 12-month revenue.

Products

Debut of Experience Cloud

When vendors talk about making tools for managing the 'customer experience,' they are often referring to systems that are narrowly targeted at the slice of the 'experience' that the business has some control over, e.g. a communications channel that features a type of message or behavior over which they can exert some influence. Control of the entire experience is aspirational because customer demand and expectations shift so quickly.

Although controlling the entire experience remains aspirational for now, this does not mean that vendors like Adobe aren't positioning themselves for a not-so-distant future point when broad platforms actually do contain enough muscle to manage larger swaths of the customer experience. The debut of Experience Cloud sweeps several of its cloud products under a single banner, providing a framework for integrating similar functions that are traditionally approached separately. Placing the new Advertising Cloud under the same umbrella as Marketing Cloud and Analytics Cloud implies a unity of function within businesses that isn't quite there. The core services platform is a critical connection point among the clouds, which provides an engine that allows people on either side of that execution divide to work with the same set of enterprise data. The processes that link campaign orchestration and media buying, although running on parallel tracks, can be better coordinated and measured with Analytics to create and identify audiences.

The new Advertising Cloud aligns advertising products with the needs of TV advertisers, combining the Media Optimizer search, and dynamic content optimization ad capabilities with the video and TV-ad-buying demand-side platform from TubeMogul (which is no longer sold as a separate offering).

Adobe did not explicitly announce a new version of the Marketing Cloud, but did add features to Adobe Experience Manager (a tool within the cloud that is used for the construction and management of the content needed for users to interact with forms, websites and mobile apps). In this release, Adobe emphasized the need to control much larger libraries of content, especially when trying to personalize user experiences at scale. Adobe has incorporated what it is calling 'fluid content,' which are chunks of content templates that get reused or reformatted on the fly when they are displayed or incorporated into multiple platforms. Adobe has identified the velocity of content management as a barrier to integrating retail in-store, offline and online experiences, making them friction-free and consistent.

Many of Adobe's customers are in verticals such as financial services, retail and telecom where insight-driven experiences have been difficult, but an abundance of data is available. Yet these businesses are prioritizing digital transformation strategies that emphasize one-on-one personalization. Our 2H VoCul data shows 42% of businesses with a formal strategy prioritize personalization strategies, which is 14 points higher than businesses with no formal plans. Businesses also want to offer more contextual recommendations; 49% of respondents with formal digital transformation strategies show interest in using machine learning for automated contextual recommendations to create personalized customer experiences. Machine-learning technologies are essential to provide scalability as intelligent applications take over the execution. Businesses can build deeper connections, recommend next 'best actions' and create more contextually-driven interactions.

Experience Manager now supports a richer integration with the Creative Cloud product, and allows users to access social content directly via the company's recent Livefyre acquisition.

Work continues on the underlying platform

Adobe also indicated that it is working on deeper level integrations between the members of its Cloud families, particularly between elements of the Experience Cloud like Adobe Campaign and Creative Cloud offerings like Dreamweaver. Adobe is executing these connections through its Adobe Cloud Platform, which is the underlying, cross-cloud architecture that unifies content and data. It includes services for blending and analyzing data while harnessing machine learning via Adobe Sensei to amplify marketing effectiveness and efficiency. The Adobe Cloud Platform also makes its data, content and insights available to partners and third-party developers via APIs.

One of the mechanisms it will be using is a new standard data model for customer experience. This multi-vendor effort will attempt to build a single language (and applications that use the language) for customer experience processes. Spearheaded by Adobe in conjunction with Microsoft, it will also include application partners Acxiom, AppDynamics, Dun & Bradstreet, Mastercard, Qualtrics, Zendesk, and [24]7 – all of which are companies that come from the service, support, data and commerce segments.

The new standards will be a common data language for sales, marketing and service data. Plans are for it to enable the seamless exchange of data between applications that support the standard, and thereby help break down the operational silos that prevent those three key customer experience domains from working together on frictionless experiences. Adobe says it will have a progress report on this effort by the Microsoft Build conference in May.

Adobe also took the wraps off Adobe Cloud Platform Launch, a tag management solution for third-party developers to build and maintain their own integrations with Adobe Experience Cloud, and several new Sensei capabilities for the enterprise. Fluid Experiences allows marketers to connect and repurpose content across different platforms including virtual reality, IoT devices and physical screens. Auto-Target streamlines the process of content personalization, Enhanced Anomaly Detection and Contribution Analysis, and can identify statistically significant events, pinpoint sources and take action to optimize the user experience.

Microsoft connection to be expanded

And speaking of Microsoft, the two companies are expanding their partnership in several ways. Adobe announced a deeper connection between Adobe Campaign and Microsoft Dynamics CRM, and between Adobe Analytics and Microsoft Power BI.

Bringing Adobe Campaign and Dynamics together integrates data and processes to better align sales and marketing, as well as providing an actionable view of the customer throughout the customer journey. With Power BI allied to the Analytics application, users will be able to visualize the impact of campaigns across segments and see which customer touchpoints are most effective.

Also of note, the web content management service that is part of Adobe Experience Manager is now offered on Azure, promising faster web experiences with greater geographic regions.

Competition

When considering Adobe's Marketing Cloud as a whole – including the extended platform it is a part of along with the Experience Cloud – the company's primary competition comes from Oracle and Salesforce. While there is certainly piecemeal competition to each individual element within Marketing Cloud in terms of scale, range of offering and now platform, only these behemoths can be seen as challengers.

Oracle lacks the halo effect that Adobe has from its legacy in creative tools, as well as much of the specific marketing-focused analytics. To counter that shortcoming, the utility-grade data services Oracle has assembled within its Data Cloud, and a technically weighty partner channel, give it a different set of smarts to wield.

While Salesforce appears to be a competitor, it does not have the content assets. With the acquisition of Demandware, Salesforce did create a Commerce cloud that can manage and personalize web experiences. However, it is still fundamentally a transactional platform. The company is creating an environment where technology buyers can have the underlying connections between systems that they crave, along with the ability to work with a broad array of ISV partners. With multiple heavy-duty acquisitions still being integrated, Salesforce is also extending outward with new clouds (notably Commerce), and is committed to making sure that the core platform can stretch to accommodate applications for just about any aspect of customer engagement.

While Adobe is primarily in larger organizations, other competitors primarily used in mid-market customer experience management and commerce include Sitecore, Episerver and CoreMedia.