Industry Clouds Arise as Hybrid Multicloud Matures

Businesses once turned to public cloud services for more general computing needs. Now they’re deciding how to connect their data centers to a variety of cloud services designed to meet specific industry needs.

By Michael Brenner

By Michael Brenner November 17, 2021

Cloud services specifically built for healthcare, manufacturing, financial, retail and other industries are raising curiosities and some confusion among businesses building their future on hybrid multicloud technologies. These industry-specific cloud services flip the origin of cloud computing from meeting general or horizontal to more specific or vertical computing needs. 

“Industry clouds are a logical next step in the ongoing maturation of public clouds,” wrote Kash Shaikh, CEO and president of hybrid cloud software company Virtana, in VentureBeat

He described industry clouds as collections of cloud services, tools and applications optimized for the most important use cases in a specific industry. 

“Industry cloud solutions from major public cloud providers also typically offer a variety of software and services, including industry-specific applications, from partners,” Shaikh explained. 

“For example, Microsoft and SAP partner to deliver SAP supply chain solutions through Microsoft Cloud for Manufacturing.”

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Still, some wonder whether there’s a real need for – and value to be gained from – these vertical industry clouds.

Most IT departments are already shifting their company to a mix of owned and rented data technologies. According to the Enterprise Cloud Index, 86% of global IT respondents consider hybrid cloud as their ideal operating model. In a 2021 report by Flexera, 76% of enterprises running a hybrid IT strategy are using multiple public clouds. This shows the use of private with public clouds is widespread and maturing, leading to the adoption of more cloud services.

The appetite for industry solutions is expanding in a very big way, according to tech analyst and Cloud Wars creator Bob Evans. His Top 10 Industry Cloud list is led by Salesforce, followed by Google Cloud and Oracle. 

Evans sees industry cloud computing services coming from partnerships between established cloud service providers and specialists who together can bring corporate customers new, integrated services that will allow those customers to do things in new ways. Integration, automation, easy replication and management of applications and data are just part of the industry cloud appeal

“It’s one thing to say that all of their processes will be able to move much faster,” Evans said in an interview for Industry Cloud Battlefield event video. “(Corporations) won’t just say that it used to take them 3 days and now it takes 3 hours, so we’re going to take two-and-a-half days off a week. They’re going to use that time, those people and the resources they have to move into new businesses, new revenue streams and new ways of dazzling their customers.”

He said speed opens the door to opportunities. Opportunities open the door to happy customers and growth.

Industry Clouds in a Hybrid Multicloud World

Industry clouds are customized for particular industries. They are designed for operational efficiency and compliance with laws on data protection or regulations for particular sectors. For example, healthcare providers must comply with Health Insurance Portability and Accountability (HIPAA) regulations. Financial services have their own industry rules to follow. Manufacturing, agriculture and government-specific industry clouds could bring benefits and value as they improve over time.

In his interview with Evans, Salesforce EVP of Industry Clouds Jujhar Singh explained that Salesforce builts on top of their platform, modifying it to fit specific industry needs.

“We take the whole platform and leverage it but make it purposeful for that industry,” said Singh.

Industry clouds, distributed clouds and regional clouds are all examples of how cloud services are evolving. Specific clouds with workflows, functionality and regulatory considerations slanted towards a particular vertical have been pegged by Forrester as a critical development for 2022.

  • Distributed Clouds: According to Gartner, the inter-cloud connections of distributed clouds enable organizations to master some of the traditional caveats of this paradigm, including regulatory compliance, data sovereignty, and security by locally accessing remote clouds.
  • Regional Clouds: This cloud variety directly supports the cloud’s global presence by allowing organizations to manage their resources – like metadata – according to geographic regions.

Benefits of Industry Cloud 

Many financial and medical institutions came late to cloud services because their industries have technical and legal requirements that weren’t initially built into cloud services. Industry-focused cloud services aim to address these needs, which could accelerate the shift to cloud, especially hybrid multicloud. 

As IT organizations manage their hybrid and multicloud IT environments, industrial clouds could allow them to run particular workloads on-premises then push them to a specific industry cloud service during peak periods or whenever it makes strategic and financial sense. 

In the near future, industry clouds will dominate, according to Kate Leggett and Ted Schadler, both vice presidents and principal analysts at Forrester research. 

“However, the path forward is less straightforward,” they wrote in blog post titled Industry Clouds Accelerate Their Momentum into 2022

“In the short term, enterprises will piece together a mix of cloud approaches – horizontal, vertical and purpose built. They will use marketplace components and co-innovate with partners to harness the agility that they need to be future fit. 

It’s still early days for industry clouds, and some may seem more like marketing strategies than significant offerings tailored for specific industries. But that will change, claimed Virtana CEO Shaikh. 

“In the meantime, companies evaluating industry clouds from public cloud providers should do so carefully, taking care to compare not just the industry cloud offerings from different providers but also the industry cloud of each provider to their general-purpose solution,” he wrote. 

“There might not yet be that much of a difference.”

Michael Brenner is a keynote speaker, author, and CEO of Marketing Insider Group. Michael has written hundreds of articles on sites such as Forbes, Entrepreneur Magazine, and The Guardian and he speaks at dozens of leadership conferences each year covering topics such as marketing, leadership, technology, and business strategy. Follow him @BrennerMichael (insert link: https://twitter.com/brennermichael). 

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