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The Cloud Software turns Vertical

Posted by Marbenz Antonio on March 15, 2023

Organizations can use cloud solutions tailored to their industry to automate tasks that were previously done manually. This allows them to redirect their attention toward differentiating themselves from competitors.

Cloud and software vendors are currently providing industry-specific solutions that update outdated processes and stimulate innovation. By doing so, organizations are able to allocate their resources toward distinguishing themselves from competitors.

To meet this demand, major cloud companies, software vendors, and system integrators are creating a variety of cloud-based solutions, accelerators, and APIs that are preconfigured to cater to the typical needs of various industries. These solutions are purposely designed to be easy to adopt and can be customized to form a digital edge for organizations.

Regardless of the specific combination of applications, tools, or services that users choose from these offerings, the cloud serves as the foundation that binds them to robust business process solutions. As an illustration, a leading automobile manufacturer has collaborated with cloud vendors to create cloud-based connected car application development services for the transportation sector. The platform incorporates industry-specific solutions as well as IoT, machine learning, analytics, and compute services that manufacturers can utilize to create connectivity frameworks for their vehicles.

Initially, the healthcare industry utilized cloud processes for handling administrative data. Compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) played a pivotal role in the next stage of the healthcare sector’s cloud adoption journey, as healthcare organizations started to store patient data in the cloud. Currently, innovative healthcare providers are investigating how they can utilize HIPAA-compliant cloud models to enhance medical treatments.

Within the next 18 to 24 months, we anticipate an increasing number of organizations across various industries will start to investigate how industry-specific clouds can assist them in meeting specific vertical requirements. In fact, according to Deloitte’s analysis, we estimate that the industry cloud market could be worth up to US$640 billion in the next five years.

Undoubtedly, the trend of adopting vertical-specific cloud solutions is rapidly gaining traction, and therefore, it is advisable to start examining the potential benefits it can offer to your organization. One way to begin is by assessing your business process ecosystem to identify which processes you would be open to sourcing from external vendors, and the advantages and disadvantages of doing so.

As an important aspect of this evaluation, endeavor to evaluate the extent to which your existing processes align with your short- and long-term business strategies, and identify areas that require enhancements. Furthermore, bear in mind that the expanding list of cloud-based capabilities could trigger innovative business models and unconventional possibilities.

Lastly, the trend of adopting industry-specific cloud solutions offers a much-needed chance to reorganize IT. As organizations commence to outsource IT functions and business processes that do not provide any competitive edge, they can reallocate their focus and resources towards developing “distinguishing” systems and services that do so. This will allow them to simultaneously establish an enduring capacity to adapt to change.

This evaluation doesn’t have to be an extensive, two-year undertaking. Instead, it can be carried out in smaller, manageable stages that enhance efficiency and efficacy in most processes along the way. Concurrently, you can begin redirecting your workforce and resources toward the unique processes that provide a competitive edge.

Cloud Software: From infrastructure to industry verticals

The Cloud goes vertical trend is not a new concept, with organizations adopting cloud-based software for similar compliance, data management, and business process needs in the 2000s. However, what’s new is the availability of actual industry-specific processes and the expectation for cloud vendors to offer “common core” solutions that address shared needs across industries. Cloud and software vendors now provide a vast array of modular, industry-specific processes accessible through APIs, enabling engineers and system architects to connect targeted systems in a shared cloud network easily. This represents a significant advance from compliance-based offerings of the past.

Given this context, we can expect this trend to manifest in the following ways:

Cloud Software: Hyperscalers climb the stack

Amazon Web Services (AWS), Google Cloud Platform, and Microsoft Azure offer cloud-based industry-specific enclaves that automate business processes unique to sectors such as healthcare, manufacturing, automotive, retail, and media. They provide infrastructure-as-a-service (IaaS) and platforms-as-a-service (PaaS), along with hyper-scaler-developed products and services that automate higher-order processes. Organizations can also access a growing ecosystem of sector-specific business capabilities from established vendors like Oracle, Salesforce, SAP, and ServiceNow, as well as startups and open-source projects.

Cloud Software: Focus on differentiation

Consider your home-grown code before adopting cloud-based industry-specific solutions. Your customized code provides a competitive advantage and meets your unique needs. Assess your existing capability and determine if it’s better than what’s available off the shelf. If it’s special and sets you apart from competitors, keep it. If not, consider using an industry API. Determine where your company wins in the marketplace and which technologies make those wins possible. Invest in in-house analytic capabilities that deliver competitive differentiation and guard them jealously. Everything that doesn’t separate you in the market becomes commodities and can be provisioned as business services from cloud or software providers.

Consider implementing the following steps as you explore the potential benefits of the Cloud goes vertical trend, some of which may be overdue:

1. Collaboration between business and IT leaders is crucial in identifying where the company currently excels and where it can win in the future. This requires a mutual understanding where the business must have a deeper knowledge of technology and IT must comprehend the business strategy and the pivotal role technology plays in driving it. This joint understanding enables both teams to pinpoint the essential technologies that will deliver success.
2. Compile a list of business procedures and the cloud-based tools that aid in their execution.
3. Determine which processes and technologies that provide a competitive advantage should be kept in-house. Additionally, identify areas of your business that could leverage the new set of technology offerings made possible by the cloud.
4. Collaborate with cloud service providers, software vendors, and integrators to strategize for the next stage of your cloud transformation.

Cloud Software: Build the capacity for change

Access to best-in-class solutions and experimental tools is important for organizations to connect all the dots in their digital transformation strategies. This requires a willingness to embrace disruption and stay on top of the latest industry cloud offerings. With the constant evolution of tailored clouds for specific industries, cloud technology can provide the agility to change continuously. Adopting industry cloud solutions can be the next leg of your cloud journey, simplifying management and upgrading processes while enhancing scalability and affordability.

Conclusion

The positive aspect is that adopting the Cloud goes vertical trend doesn’t need a major overhaul. Instead, it can be achieved gradually with careful planning, which helps avoid complex legacy app renewals or disruptive core modernization projects. Each step taken towards this trend improves the efficiency and effectiveness of your systems.

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