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Microsoft, SAP and Adobe announced last week that they’re working on a new project called the Open Data Initiative that’s supposed to bring customer data from the three companies' disparate products together into a common data lake for processing and analysis. Under the new initiative, customers should be able to read and write data from all three companies’ business applications.

 

Pooling business application data is critical to enterprises’ futures. Companies that want to make the most of advanced analytics will need to access previously disparate data sources. Organizations must break down their internal siloes between functions to increase enterprise agility – and technology must follow suit. Microsoft CEO Satya Nadella said customer demand for collaboration and integration was the driving force behind this initiative.

 

It’s still early days, but trends in the enterprise technology market point to increased multi-party partnerships between vendors such as this one. Here’s what enterprises need to understand.

 

Partnership evolution

 

This initiative is the natural evolution of a trend toward increased partnership among enterprise technology companies, enabled by customers shifting their work to the cloud. Over the past several years, companies – even those that compete with one another – have begun forming deep partnerships that allow customers to integrate products.

 

Why now? When business applications are in the cloud, they are easier for vendors to integrate on a technical level. Customers also can more easily change vendors, which puts increased pressure on tech companies to provide products that meet enterprises’ needs. Typically, deep integrations help tech companies fortify the network effects of their products. After all, it’s harder for a company to abandon a product if it’s integrated with everything else that firm uses.

 

SAP and Adobe are logical choices for Microsoft in this ground-breaking initiative. The companies have deep, strategic relationships fostered by Satya Nadella. What’s more, although the three compete, they have a strong shared customer base, which makes integration more sensible.

 

Finally, if these companies don’t partner with one another, other firms will come along to do the job. A fleet of businesses like Informatica, Sapho and Mulesoft (now a part of Salesforce) exist to help enterprises create and operationalize connections between data sources.

 

How open is open?

 

Bringing other companies on board with this consortium and future ones will be the greater challenge. For all of Microsoft’s talk of openness in this partnership, it’s unclear what that will mean on a practical level. At first, customers will have to store their data in Microsoft Azure, not another cloud. And, at least so far, the companies are unwilling to provide details about key information like what common data model will underpin the initiative and if any components will be released as open source projects.

 

If Azure remains the sole storage option for this initiative, enterprises shouldn’t expect key players (and Microsoft competitors) like Salesforce and Oracle to participate. After all, their participation would drive additional usage of Microsoft’s cloud, while opening them up to disruption by other business app providers that could build on top of the same platform and poach business from existing customers.

 

That said, Microsoft knows how to successfully engage with open ecosystems. Last week, it announced the expansion of the Microsoft Intelligent Security Association, a group of 31 security vendors that integrate with the Advanced Threat Protection suite of products. It provides the best potential framework for how the Open Data Initiative could progress, with providers piling in to contribute data and empower shared customers. contribute data and empower shared customers.

 

Furthermore, industry trends toward increased collaboration and shared data could propel vendors to join this alliance or a competing one. Salesforce and Google have a deepening relationship that could blossom into something broader, especially given Microsoft’s alliance with Adobe (and the latter’s acquisition of Marketo).

 

Enterprises must make forward-thinking investments in their business systems, and this week’s news shows how the environment is set to change. As companies continue to move their businesses into the cloud, data connection and integration should be at the forefront of their decision-making.