Are industry clouds an opportunity or a distraction?

Industry clouds are a bundle of cloud services, tools, and applications that focus on the most important use cases in a specific industry. The most common industry clouds are designed for the retail, healthcare, government, and finance sectors. 

This might seem like a new concept. However, the notion of clouds with a focus on specific industries is as old as cloud itself. “Community clouds” are discussed in the first version of NIST’s definition of cloud computing. “The cloud infrastructure is shared by several organizations and supports a specific community that has shared concerns (e.g., mission, security requirements, policy, and compliance considerations).” That quote was from about 12 years ago. 

New or old, the concept of industry clouds has continued to evolve over the years. Today, the major public cloud providers are counted among industry clouds. They typically offer a wide variety of software and services, including industry-specific applications from partners. 

In their latest incarnation and with the support of major cloud providers, industry clouds are gathering interest again. Public cloud providers are at “feature saturation” in many of their cloud service categories. Industry clouds should provide access to a much larger market for them moving forward. Public cloud providers recognize the potential of industry clouds to build value for their customers. 

Enterprises want disruptive capabilities that will bring an innovative differentiator to their specific business. Enterprises also recognize the potential of industry clouds to build value for their customers. 

Industry-specific cloud services include:

• Logistics systems so advanced that manufacturing companies can keep zero inventory
• Healthcare systems that provide packaged monitoring capabilities for patients at home
• Compliance governance that supports international finance

Much of the pushback I’ve received from enterprises about moving to public clouds is around industry-specific software or applications. If they move to general-purpose public clouds, they will leave behind some mainframe-based custom applications or industry-specific software that only runs on-premises. If the public clouds can offer a better platform for industry-specific solutions that either meets or exceeds the industry-specific functions they seek, then moving to public clouds becomes a no brainer. 

The downside is that those who wait for industry-specific features in public clouds could wait longer to migrate. That means they could be (and probably are) missing out on the core benefits of using a public cloud provider, benefits such as cost savings, lower risk for dealing with a pandemic, and better agility. This distraction concerns many in the cloud business—the idea that forthcoming industry clouds could freeze the public cloud market for certain industries while enterprises await industry-specific clouds. 

Overall, it’s good that the public cloud providers are moving in an industry-specific direction. As to the resulting value for industries, that will depend on their customers’ ability to leverage these new industry-specific features as true force multipliers. That’s another post.