Cloud computing is on track to become a US$650 billion market within the next couple of years.1 I expect much of this growth to be spurred by industry clouds.
Industry cloud adoption has many drivers. For one, the space isn’t limited to the hyperscalers. From large global database and ERP software companies to app developers and professional services firms, a broad ecosystem of vendors continues to grow. These diverse vendors are providing customers with a variety of purpose-built tools, industry- and sector-specific data models, and pre-built business processes.
Customer demand for rapid digital transformation will continue to increase and be a driving force behind industry cloud adoption. The pandemic was a wake-up call that helped many companies realise that digital transformation needs to happen in weeks and months, rather than years. To achieve rapid digital transformation, customers need end-to-end, out-of-the-box configurations of vertical, cloud-based software that’s easy to customise. In fact, they’re asking for customisable solutions at the sector level. For example, financial services customers want targeted solutions for commercial and retail banking, wealth and asset management, mortgage banking, and insurance, among others.
In addition, industry clouds are inherently cross-silo, enabling businesses to think across boundaries—and break them. Most companies are more concerned with processes that help them achieve business outcomes than they are with horizontal organisational boundaries such as sales, service, and marketing. For example, health care providers are interested in processes such as telehealth, which help them scale patient care management and manage patient relationships, without confining them to the organisational boundaries of horizontal software. By emphasising industry-specific processes rather than organisational boundaries, vertical clouds help organisations be more flexible and outcomes-focussed.
Finally, industry clouds allow companies to focus resources on the biggest source of differentiation today: data. We provide extensible platforms that combine applications with pre-built but customisable industry- and sector-specific processes and tools like automation, analytics, and AI. These platforms help companies manage their data and duplicate it across processes without reinventing the wheel, freeing them to use their data as a “secret sauce” that can help them win in the market, for example, by spending less time on operational activities and more time building customer relationships.
What’s next for industry clouds? Cloud exchanges. Cloud exchanges will leverage vertical clouds’ ability to break organisational barriers and extend it across sector and industry lines, enabling cross-vertical learning, collaboration, and data exchange.
Health information exchanges—the holy grail of health care—are an example of this. These platforms make it possible to share personal health information securely among multiple providers and systems, which can help organisations develop new products such as personalised medicine. Another good example is our Philanthropy Cloud, a network of companies and philanthropic causes that empowers employees to direct corporate philanthropy.
We’ve barely scratched the surface of cloud’s transformative capabilities. As efficient as horizontal cloud solutions are compared to on-premises systems, even more efficiencies can be realised with vertical clouds. I believe that industry clouds are the key to realising the cloud’s full potential.
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