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Cloud providers compete on industry clouds

21 July, 2022 | Michael Azoff

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Summary

A selling point of the public cloud is that it is industry agnostic: horizontal technology that any business can use. As increasing numbers of users migrate their workloads to the cloud the providers can see opportunities in certain industry segments to provide services specifically geared to those industries, notably in financial services, healthcare, manufacturing, public sector, and retail. The user needs to ascertain that the industry cloud offers more than just a re-packaging of existing services. The attraction for providers is greater stickiness, but one also senses a reaction to not being left behind – all the major public clouds have sprouted industry clouds. Industry specialization revolves around industry-specific SaaS offerings, including fine-tuned support for compliance, regulations, governance, and security. 

Public cloud competition by breadth of industry specific clouds 

The public cloud providers are making acquisitions to fill out their industry clouds. The following table lists the major public cloud providers by largest number of industry clouds (at time of writing, this is clearly an evolving picture):

Table 1 Breadth of industry clouds offered by major public clouds

The ranking methodology measures the breadth of industries covered by counting which distinct industry clouds are listed on the respective vendor web sites. There is no comparison analysis conducted on the degree of in-depth features in each industry cloud and readers are advised to perform this analysis on their clouds of interest. 

Notable in the above ranking by industry clouds is how Google with 22 industry clouds has made it a core differentiator and how Microsoft has chosen to focus on only five industries. AWS is a market leader in public cloud and its 18 industry clouds also place it competitively in this aspect of cloud services. Oracle is not far behind with 17 industry clouds and the Cerner acquisition for $28b, a company offering IT solutions to the healthcare industry, is a significant boost to its healthcare cloud. Alibaba Cloud offers traditional industry verticals and some less typical: a dedicated ISV cloud for onboarding businesses in China, and a metaverse cloud. IBM has chosen to focus on only eight industry clouds. It remains to be seen whether Microsoft and IBM will increase their industry specific portfolio to compete by breadth with the other public cloud providers.

Industry specific support for compliance, regulations, governance, and security

Apart from industry specific SaaS applications that public cloud providers may offer in an industry cloud, the main benefit is industry specific support for compliance, regulations, governance, and security. For example, the Microsoft Cloud for Financial Services makes the point that there 220 regulatory updates published every day and offers Microsoft Compliance Manager to help keep on top of this regulatory deluge. In the case of IBM its Cloud for Financial Services has a Control Framework for helping keep track of regulatory changes, and where possible it introduces Compliance-as-Code to automate regulatory controls governed by this cloud. AWS offers a Compliance Center to keep track of regulatory changes in 54 countries. The AWS Cloud Governance for Financial Services helps users manage and govern their use of AWS.

In conclusion our advice is for the user to examine just what is on offer that is different in the industry cloud versus the generic cloud. Given the proliferation of cloud services within any given provider, having a streamlined set of recommended services offered in an industry cloud may in itself be beneficial. We believe industry clouds will create more reason for businesses to move workloads to the public clouds.

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Michael Azoff
Chief Analyst, Cloud Native Computing

Michael is a chief analyst on Omdia’s cloud and data center team, where he covers a range of topics related to the cloud, data center, AI, software development, Agile, and DevOps. He also provides consulting to clients and support for Informa Tech events, with a focus on cloud native computing.

Michael was previously a consulting analyst at GigaOm, covering AI and software development. Prior to this, he was chief analyst at Kisaco Research, where he introduced an analyst chart on AI chips. Michael was also a distinguished analyst at Informa companies, including Ovum, for 17 years. After completing his PhD in solid-state electronics at the University of Sheffield (England), Michael worked at Rutherford Appleton Laboratory and published academic papers. He went into R&D, built neural networks, launched a startup for his Prognostica Microsoft Excel add-in for time series forecasting, and published a book, Neural Network Time Series: Forecasting of Financial Markets.

 

 

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