Dive Brief:

• Adobe and Microsoft announced Monday that they will partner to help businesses better engage customers in the cloud. The partnership was announced during the Microsoft Ignite conference in Atlanta.
• The collaboration will create standardized data models for both companies' marketing and business applications using artificial intelligence, machine learning and advance analytics to help create data-driven sales and marketing capabilities, according to an announcement. 
• Under the partnership, Adobe will make Microsoft Azure its preferred cloud platform for the Adobe Marketing Cloud, Adobe Creative Cloud and Adobe Document Cloud while Microsoft will make Adobe Marketing Cloud its preferred marketing service for Dynamics 365 Enterprise edition

Dive Insight:

The companies said they will also work together to help mutual customers implement the solutions. Satya Nadella, CEO of Microsoft, said the partnership will "help companies digitally transform and engage customers in new ways."

Even though Adobe will use Microsoft's cloud, it also has a standing partnership with Amazon Web Services. But the company plans to use both Azure and AWS in the future, according to an Adobe spokesperson, Network World reported. An Amazon spokesperson told ZDNet that the existing agreement between Adobe and AWS has not changed.

The agreement Adobe has with both AWS and Microsoft shows the nuances of the market, and the way in which companies try to spread their capabilities through partnerships. 

As the cloud expands, companies like Adobe — which traditionally focused on selling on premise software — have had to pivot to more cloud-focused business models. If their infrastructure supports it, enterprises will likely continue to choose hosted services over traditional products. Rather than putting up their own infrastructure, organizations instead turn to hosting companies with the technical aptitude for continuous service. 

An IDC report published last month predicts cloud-based software will grow three times faster than traditional products over the next five years. Worldwide revenues from public cloud services are expected to reach reach $195 billion by 2020, from $96.5 billion this year.