Industry Clouds Offer Vertical Potential for Enterprises
Enterprise clouds have gathered significant momentum in 2022 as organizations increasingly realize that a generic one-size-fits-all public cloud offering is not always the best option.
With an industry cloud, configurations, policies and technologies are designed and tailored for a specific market vertical. For example, there may be industry cloud services just for retail, healthcare, financial services or any other industry. There are industry cloud offerings available from the major public cloud providers, including AWS, Google, and Microsoft, as well as application-driven vertical offerings from vendors such as VMware, Snowflake, and Databricks.
“We’ve seen a massive proliferation of industry clouds among the hyperscalers and from SaaS players over the past few years,” said Tracy Woo, an analyst at Forrester. ITPro Today.
The market is near saturation to attract end users willing to sign up for a “cloud for everything” offering that has been the message for the past decade, Woo said. According to her, the IT industry has reached an inflection point where those who have been reluctant to adopt cloud, especially in highly regulated industries, realize that they need the public cloud to remain competitive.
What industry clouds are – and what they are not
According to Woo, the biggest misconception surrounding enterprise clouds is driven by the marketing veneer surrounding these offerings.
For example, some may have the perception that Microsoft Cloud for Financial Services and AWS for Financial Services are just generic cloud services repackaged with a ton of industry-specific messaging around them. The reality, Woo said, is that there is a real movement to make this industry-specific. For example, AWS teamed up with Goldman Sachs and Nasdaq to make a financial services industry product, and Google invested $1 billion in CME Group to do the same.
The move to industry clouds is one that vendors and professional service organizations are increasingly embracing. Aki Duvfur, vice president of presentation and integration for horse ridings Cloud Services practices, told ITPro Today that industry clouds are vertical solutions that embed rules, regulations and industry value into the deployment models of public cloud providers.
“The focus is often on business outcomes versus a traditional public cloud deployment model, where the focus is often on feature/function pricing alone,” said Duvvur.
While there is growing interest in cloud offerings in the industry, Chris Noble, CEO and co-founder of Cirrus Nexus, tell ITPro Today that it is important to recognize that industry cloud is not a huge step change. As such, he suggests that expectations around what industry clouds can deliver should be set and managed accordingly.
“In practical terms, industry cloud is a logical grouping of applications and systems specific to an industry; however, it is not just that,” said Noble. “Enterprise cloud comes pre-packaged with all the security controls, policies, configuration and management tools needed to easily deploy solutions for specific business processes.”
What are the benefits of Industry Cloud?
Different industry verticals have different regulatory compliance requirements. A need to comply with specific industry regulations is a key driver of cloud adoption in industry, but it is not the only one.
“Highly specialized industries such as banking, medical or government have long adopted purpose-built cloud solutions,” Jared Haleck, chief product officer at Cantata, tell ITPro Today. “We are now starting to see industries with less regulatory oversight, such as legal and construction, also chasing purpose-built solutions.”
Haleck noted that data from a study conducted by Forrester Consulting on behalf of Kantata, shows that this shift towards tailor-made solutions tailored to the specific needs and use cases is happening in the professional services industry right now. Seventy-eight percent of business leaders agree that technology vendors limit professional service organizations when they provide generic, rather than industry-specific, solutions and services to address unique professional service needs.
“As enterprise clouds have evolved over the years, the core benefits have moved from mitigating regulatory risk to inevitably providing more value than horizontal solutions,” said Haleck. “Cloud computing is relatively new compared to other industries, and so, as time goes on, more specialized products will emerge.”
For example, the auto industry has advanced with cars aimed at almost every kind of specialized use case — from rugged utility vehicles to self-driving vehicles, he said. Haleck expects that over the years the IT industry will see the same trend toward specialization in cloud computing to meet specific needs and use cases.
Best practices for cloud adoption in industry
There are a number of best practices for enterprise IT leaders to consider when transitioning to an industry cloud model.
Christian Iantoni, Partner, Cloud & Digital, and PwC industry cloud co-leader, told ITPro Today that it is important to realize that not all industry clouds are the same.
“Everybody defines it differently, even the leading industry analysts, since it’s such an emerging market,” Iantoni said. “You really have to know what you want, and how you will measure success, to bring together the right partners best to deliver for you.”
Iantoni recommends three guiding principles for organizations looking to take an industry cloud approach:
1. Work together. Bring your business people and technical people together in agile work teams and update your operating model to improve speed and efficiency. Hire and grow the best business and technical talent to work together.
2. Partner. Choose your preferred ecosystem partners, and go deep with them to co-invest and co-build – hold them accountable with skin in the game to achieve your desired business results.
3. Compete. Really define your competitive points of differentiation and determine where you need to invest to differentiate and where you need to invest to be most effective in winning with your competition.
About the authorSean Michael Kerner is an IT consultant, technology enthusiast and tinkerer. He consults with industry and media organizations on technology issues.