The next phase of cloud will see the technology take on a much stronger industry flavor as enterprises seek to reinvent themselves.
That's the word from consulting and managed services executives who contend customers must push beyond cloud migration to maximize their investments. Just getting to the cloud can provide some initial efficiency and agility wins. But customers can obtain greater value if they use the cloud as an agent of business change. Emerging industry clouds aim to make that happen, offering resources that target an organization's vertical market needs and, in doing so, providing a path to transformation.
Industry-specific clouds have grabbed the attention of organizations that believe the offerings can help them expand their businesses, launch new products and catch up with more digitally mature companies. A forthcoming research report from Accenture of 1,900 clients found 72% of respondents cited business growth as the key driver behind their interest in industry clouds, while 70% identified innovation and 68% listed cost cutting.
Beyond those considerations, the companies Accenture polled also focused on the ability to gain first-mover advantage -- that is, building industry clouds to enable new products, services or business models and seize a competitive edge. Overcoming digital disruption is another plus: Respondents view industry clouds as a way to compete with digital natives, as well as traditional enterprises that have invested heavily in cloud technology.
"The leading companies are doing way more than cloud migration -- they are investing to transform their businesses," said Andy Thompson, managing director and industry cloud lead of technology strategy and advisory at Accenture. "Industry cloud is only going to accelerate."
For service providers, the trend opens opportunities to work with clients ready to deploy verticalized clouds. Customer engagements are likely to involve a mix of business consulting, technical advice and customization services.
Types of industry clouds
Industry clouds come in a variety of forms, with the top public cloud providers typically supplying the core components. AWS, Alibaba, Google, IBM and Microsoft rank among the companies rolling out verticalized offerings, industry executives said.
Those offerings include frameworks, templates and reference architectures, which serve as blueprints for building industry clouds. A cloud provider's framework describes how customers can apply a specific group of services to meet the needs of a particular industry, noted Carm Taglienti, distinguished engineer at Insight Enterprises, a solutions integrator based in Tempe, Ariz. White papers, architectural diagrams and best practice documents deliver the guidance in this cloud approach. Taglienti cited AWS' Architecture Best Practices for Manufacturing as one example.
Another approach involves hyperscalers providing industry-specific features and products built on their clouds. Many industry cloud efforts fall into that category.
"The dominant approach is building features and bundles that help industries adopt cloud with less customization," said Miles Ward, CTO at SADA, a consulting firm and Google Cloud partner based in Los Angeles.
Google Cloud, for example, offers products such as its Recommendations AI API, which lets retailers deliver purchasing suggestions across web, mobile and contact center channels. While the term industry cloud might conjure the image of a separate, physical data center infrastructure for Google's retail customers, the product-based approach offers greater value to such organizations, Ward contended.
The reason? Specialized clouds cost more. "We see more vertical-specific buyers advocating for the big clouds to meet their needs directly, rather than splintering off into smaller -- and thus necessarily more expensive -- niche systems."
That said, some cloud providers are investing in full-service clouds for a particular industry or several industries across a value chain. IBM's Food Trust, which uses IBM Cloud's blockchain technology, fits into the latter category. The cloud aims to boost efficiency in the food supply chain -- from produce growers and food processors to wholesale/distribution companies and grocery retailers.
AWS GovCloud, meanwhile, offers an isolated region within the hyperscaler's public cloud that focuses on the U.S. federal government. Ward cited AWS GovCloud as one way to create an industry cloud as a separate infrastructure. In this case, a hyperscaler clusters demand from a specific industry and creates a subset environment to serve it.
In another separate infrastructure variant, a cloud provider creates an industry-specific overlay environment that combines its private systems with hyperscale cloud resources, Ward said. He cited Unity Technologies' Multiplay as a case in point. The company, best known for its video game development software, hosts video game makers' products on its Multiplay hosting platform, which can burst to the public cloud to handle spikes in demand.
Benefits for clients
Industry clouds, whether frameworks, discrete products or full-service offerings, have one thing in common: They speed up deployment because organizations don't have to build everything from scratch.
"Right now, if a healthcare company asks their cloud provider if they're HIPAA-compliant or if a gaming company asks if network latency is low enough, the answer is: 'It can be, with the right effort and technical skill on your end,'" said Michael Ames, managing director of vertical markets at SADA. "That's not a bad answer, but it shifts too much work and risk to the customer, which is a drag on time to value. Customers are looking toward industry clouds as a means to reduce that drag and get to ROI much more quickly."
The need to compress time to value has become a key market driver for every technology investment, Ames added.
Time to market, meanwhile, helps customers fend off digital disruption.
"Disruption is a big motivator," Taglienti said, noting businesses seek competitive advantage and market viability.
Nicholas MerizziPrincipal, Deloitte Consulting's Cloud Strategy offering
Nicholas Merizzi, principal in Deloitte Consulting's Cloud Strategy offering, also cited disruption as a factor sparking demand for industry clouds.
"The analogy we often make is that our clients are in a race with no pit stops and are having to repair, adjust and upgrade their cars midtrack because speed matters," he noted.
Merizzi cited the example of a traditional financial services firm hoping to reinvent itself to keep up with its fintech rivals. "The industry cloud is a way to beat time to market," he said.
Regulatory duties also lead companies to consider industry clouds with baked-in compliance. Ward pointed to compliance requirements, such as International Traffic in Arms Regulations -- which apply to defense and aerospace manufacturers -- and HIPAA as among the critical issues driving industry clouds.
"Every hospital CIO would love to have the power of a major hyperscaler at their fingertips, while knowing that foundational compliance is always in place under the hood," Ames added.
Roles for service providers
Cloud providers' industry offerings may launch organizations on a faster track to transformation and compliance. But there's still plenty of room for consultants and service providers to operate. The sheer variety of industry cloud options opens an opportunity for advisory services.
And the potential for additional business grows once a customer selects a particular industry cloud path. The framework and reference architecture approach, for instance, leaves much of the heavy lifting to customers who may look for outside support.
Industry frameworks "fall short of the needs of clients without strong cloud capabilities in-house," Ames said. "A generic cloud, plus a white paper, is still a lot of work and a lot of risk for the customer."
Customers need "higher-order services" that implement the concepts embedded in industry-specific frameworks, he said.
Insight's Taglienti said his company focuses on the last mile of the cloud journey, partnering with clients to interpret how to use a particular framework to address their industry needs.
"It is the interpretation and subjectivity part that is really important," he said.