Microsoft Corporation (MSFT) Stock Has a Powerful New Weapon

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For the better part of 2016, the bulk of investor concern surrounding Microsoft Corporation (NASDAQ:MSFT) was its budding cloud-computing war with Amazon.com, Inc. (NASDAQ:AMZN). While both were in the cloud business before last year started, the race didn’t heat up in earnest until around this time last year, and MSFT stock has benefited as investors see the old tech goliath show some teeth.

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Now, the initial dust is settling, both companies have formed a line and moved on to other fronts. As such, the key narrative for 2017 is going to be a slightly different one.

Rather than being pushed and pulled by Amazon-driven headlines, MSFT stock holders will want to keep an eye on the newly gelled offensive against salesforce.com, inc. (NYSE:CRM), and to a less degree, Oracle Corporation (NYSE:ORCL).

Microsoft’s unexpected ally in that fight? Adobe Systems Incorporated (NASDAQ:ADBE).

Salesforce.com Fires the First Volley

The battlefield is artificial intelligence.

It’s not a new venture by any means. Amazon has Alexa, and Microsoft built Cortana. But this isn’t the kind of tool that helps you look up phone numbers and set reminders. Salesforce built developed this one with a specific purpose: to help its customer-management customers get more sales out of their data.

It’s called Einstein, and appropriately so. DA Davidson analyst Jack Andrews explained after reviewing the Einstein platform earlier this month:

“CRM believes Einstein furthers its vision of achieving a single customer view, with specific use cases around predictive marketing, assisted service, guided sales, unified commerce, actionable analytics, etc.”

It’s the first practical, game-changing artificial intelligence tool out there that serves a viable commercial purpose.

To be fair, Watson from International Business Machines Corp.(NYSE:IBM) was the first and is still arguably the most meaningful of all artificial intelligence platforms out there, taking aim at cancer, and doing taxes. Cost-wise, it’s not a practical possibility for most business, but for those bigger companies that can pony it up, Einstein and Watson play nice together.

It’s a market most owners of MSFT stock think Microsoft should be in.

Well, it is.

The Microsoft-Adobe Partnership

Microsoft and Adobe just announced they’ve integrated Adobe Campaign and Microsoft Dynamics 365, allowing users of both to assemble data and make business decisions in an effective way that wasn’t possible when each platform was on its own.

This deal has been in the works for a while; it just came to fruition within the past few days. A joint statement from the duo explained:

“Bringing together Adobe’s and Microsoft’s sales, marketing and customer intelligence solutions enables brands to better understand and engage with their customers across all touch points.”

The partnership also adds Microsoft’s Power BI tool to Adobe Analytics, providing detailed visualizations of how well a marketing campaign performed, and how they can be improved.

Realistically speaking, the partnership’s offer doesn’t seem like it’s as potent as Salesforce.com’s Einstein is — yet. It’s also a relatively new venture, and in time, could prove to be a headwind for the customer-management company. MSFT could also leverage its existing cloud-based services like Office and Azure, further integrating them with ADBE’s tools to become a one-stop solution.

It might not be an AI in the traditional sense, but functionality is more important than a trendy categorization of tools.

In other words, Microsoft stock isn’t exactly shooting blanks here.

Bottom Line for MSFT Stock

As was the case with the advent of cloud computing (in the broad sense), where nobody really knew where Amazon.com and Microsoft would draw their dividing line, nobody really knows where Adobe and Microsoft will be able to stop the advance from Salesforce. This is all a work in progress.

There’s little doubt as to this being one of the hot buttons MSFT stock owners need to keep close tabs on though, as the resulting headlines of this war will establish one side as the winner and the other as a loser. Pay close attention to the rhetoric, because it will matter.

That being said, Microsoft (with Adobe) is the arguable favorite here, simply because it has a deeper bench and deeper pockets.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/03/microsoft-corporation-msft-stock-has-a-brand-new-weapon-adbe-crm/.

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