In the last few years, we’ve seen a flood of new industry cloud announcements and launches from major cloud service providers (CSPs), enterprise software vendors, global system integrators, and professional services firms. Many vertical SaaS and PaaS solutions are also positioned as industry clouds in the financial services, insurance, manufacturing, retail, energy, and other industries. The IDC Industry Clouds Directory, which we’ve published for several years, today has over 320 listings in 12 industries, and those are just the industry clouds we know about!
It is easy to see why the popularity of industry clouds exploded since the major cloud and software vendors entered the market. These vertically integrated solutions offer capabilities that give organizations a more direct path to cloud, providing built-in compliance with industry-specific regulations for security, privacy, and reporting, among other advantages. Just having these industry standards pre-configured and regularly updated can save organizations a tremendous amount of custom work and costs. And industry cloud vendors go well beyond these basics, usually providing industry-specific tools, workflows, data models, connectors, and other services that give users the opportunity to leverage the latest innovation accelerators in their industry.
If your organization is considering the adoption of one or more industry clouds, consider the tips below to optimize your investment. Our advice is based on over a decade of IDC research covering industry clouds, solutions, and technology verticalization strategies and many conversations with both buyers and vendors of industry clouds.
- Go at your own pace. With their promises of a complete and integrated solution for your industry-specific needs, industry clouds seem to represent a massive new system that requires a drastic overhaul of how you currently do your work. But in fact, industry clouds are built with flexibility and modularity in mind that enables organizations to adopt as many or as few modules as they need at a time. If your business already uses cloud services, enterprise software systems, or professional services solutions, adding industry clouds from the same vendors or their partner ecosystem could be a gradual and streamlined process, using a plug-and-play approach.
- Don’t worry about vendor lock-in. Thanks to the recent influx of new offerings, there’s no shortage of industry clouds to choose from, especially in highly regulated industries. It makes sense to start by evaluating industry cloud solutions from your current vendors – after all, they should work out of the box, and time to value is one of the six pillars of industry clouds. Other advantages of working with your current provider(s) include the consumption convenience of having it count towards your negotiated cloud spend or qualify you for other discounts. Best of all, having to be “locked in” with a vendor as a trade-off for some of these benefits no longer holds true. Most vendors today design their industry clouds with interoperability in mind, building them with open architectures to ensure free data flows and collaboration. If the best-fit solution for your needs is offered by a provider other than your own, it is likely that you are only an API away from being able to integrate it into your own industry cloud platform.
- Collaborate closely with your industry ecosystem. Industry clouds enable organizations to supercharge their industry partnerships. This capability is more important than ever today, when sustainability reporting, supply chain interruptions, and increasing regulations require greater data transparency and operational agility across a company’s ecosystem. Using industry clouds to collaborate with your industry ecosystem promotes an open yet secure sharing of data, applications, operations, and expertise across organizations, which in turn can enhance decision-making, increase innovation, and ease skill shortages and supply chain challenges, among other benefits.
- Use industry cloud platforms to stay competitive. While industry clouds give you a head start by providing specialized security, compliance, data models, and other tools to meet common industry challenges, they also provide opportunities to add your own differentiators to the mix. That can mean adding new generative AI capabilities that are trained and grounded in your own data or using low-code/no-code functionality to optimize and automate workflows, for example. With the platform approach used by many industry clouds today, adding such innovations becomes relatively easy (if your data environment is ready). This extensibility of industry cloud platforms enables companies to stay agile and competitive, keeping pace with the latest technology developments. Moreover, companies themselves (or with their professional services partners) can build new industry capabilities or integrate AI models grounded in the company’s own data, further differentiating and evolving their operations.
- Prepare your organization to leverage the full potential of industry clouds. The platform-based and collaboration-centered approach used by most industry clouds may be new to many users. By providing early and continuous communications about the project and training and support for the new tools, you can help lower the barriers to adoption within the organization. In addition to preparing the company data assets, it is equally important to ensure that the company’s data governance and data sharing policies and processes are updated and communicated clearly to internal users and (external) partners. These preparations will help ensure that the industry cloud becomes your intelligent orchestration platform – the set of applications and technologies that support getting the right data to the right place at the right time. Technology can enable data security, compliance, and IP protection, as well as improve collaboration and automation, but only if users know how to use it to its full potential and company data governance policies are consistently implemented.
The adoption of industry clouds continues as enterprises across all industries see faster time-to-value in the cloud, improved industry compliance, more effective data models and AI/ML tools, convenient cloud consumption options, and better collaboration with partners. Companies in the highly regulated industries were some of the first to adopt industry clouds but today, organizations in most major industries are actively deploying or planning their adoption. More importantly, there are plenty of options on the market for them to choose from.
To find out how your industry peers are leveraging this new cloud model or learn more about the industry clouds available for your vertical, keep current with the research in IDC’s Industry Clouds, Solutions, and Technology Verticalization Strategies service.