Partners see customer transformation in industry clouds
The next phase of the cloud will see the technology take on a much stronger industrial flavor as businesses seek to reinvent themselves.
That’s the word from consulting and managed services executives who say customers need to go beyond migrating to the cloud to maximize their investments. Simply accessing the cloud can bring initial gains in efficiency and agility. But customers can get greater value if they use the cloud as a business change agent. Emerging Industry Clouds aims to make this possible, offering resources that target an organization’s vertical market needs and, in doing so, paving the way for transformation.
Industry-specific clouds have caught the eye of organizations who believe the offerings can help them grow their business, launch new products, and catch up with more digitally mature businesses. An Accenture survey of 1,900 clients found that 72% of respondents cited business growth as the main driver of their interest in industrial clouds, while 70% identified innovation and 68% mentioned cost reduction.
Beyond these considerations, companies interviewed by Accenture also focused on the ability to achieve first-mover advantage, i.e. building industrial clouds to enable new products, services or business models. and gain a competitive advantage. Overcoming digital disruption is another benefit: Respondents see industrial clouds as a way to compete with digital natives, as well as traditional businesses that have invested heavily in cloud technology.
“Leading enterprises are doing much more than migrating to the cloud: they are investing to transform their businesses,” said Andy Thompson, managing director and head of cloud technology strategy and consulting at Accenture. “The industrial cloud will only accelerate.”
For service providers, the trend opens up opportunities to work with customers ready to deploy vertical clouds. Client engagements are likely to involve a combination of business advisory services, technical advice and customization services.
Types of industrial clouds
Industrial clouds come in a variety of forms, with major public cloud providers typically providing the basic components. AWS, Alibaba, Google, IBM and Microsoft are among the companies rolling out verticalized offerings, industry executives said.
These offerings include frameworks, patterns, and reference architectures, which serve as blueprints for building industrial clouds. A cloud provider’s framework describes how customers can apply a specific group of services to meet the needs of a particular industry, noted Carm Taglienti, distinguished engineer at Insight Enterprises, a Tempe, Arizona-based solutions integrator. . White papers, architectural diagrams, and best practice documents provide guidance in this cloud approach. Taglienti cited AWS Architecture Best Practices for Manufacturing as an example.
Another approach involves hyperscalers providing industry-specific features and products based on their clouds. Many industry cloud efforts fall into this category.
“The mainstream approach is to build features and bundles that help industries adopt the cloud with less customization,” said Miles Ward, CTO at SADA, a Los Angeles-based Google Cloud partner and consulting firm.
Google Cloud, for example, offers products such as its Recommendations AI API, which allows retailers to offer shopping suggestions across web, mobile, and contact center channels. While the term industry cloud might conjure up the image of a separate physical data center infrastructure for Google’s retail customers, the product-based approach provides greater value to those organizations, Ward argued.
The reason? Specialized clouds cost more. “We are seeing more vertical buyers advocating for large clouds to serve their needs directly, rather than splitting into smaller – and therefore necessarily more expensive – niche systems.”
That said, some cloud providers are investing in full-service clouds for a particular industry or multiple industries in a value chain. IBM’s Food Trust, which uses blockchain technology from IBM Cloud, falls into the latter category. The cloud aims to increase the efficiency of the food supply chain – from food producers and processors to wholesale/distribution companies and food retailers.
AWS GovCloud, meanwhile, offers an isolated region within the hyperscaler’s public cloud that focuses on the US federal government. Ward cited AWS GovCloud as a way to build an industrial cloud as a separate infrastructure. In this case, a hyperscaler aggregates demand from a specific industry and creates a subset environment to serve it.
In another distinct infrastructure variation, a cloud provider creates an industry-specific overlay environment that combines its private systems with large-scale cloud resources, Ward said. He cited Unity Technologies’ Multiplay as an example. The company, best known for its video game development software, hosts video game makers’ products on its Multiplay hosting platform, which can burst onto the public cloud to handle spikes in demand.
Benefits for customers
Industrial clouds, whether frameworks, discrete products, or full-service offerings, have one thing in common: they speed up deployment because companies don’t have to build everything from scratch.
“Right now, if a healthcare company asks their cloud provider if they’re HIPAA compliant or if a gaming company asks if the network latency is low enough, the answer is:” It can be, with the right effort and technical skill from your end,” said Michael Ames, Managing Director of Vertical Markets at SADA. “Not a bad answer, but it transfers too much work and risk to the customer, which slows profitability. Customers are turning to industry clouds as a way to reduce this slowdown and get much faster return on investment.”
The need to reduce time to value has become a key market driver for every technology investment, Ames added.
Time to market, meanwhile, helps customers avoid digital disruption.
“Disruption is a big motivator,” Taglienti said, noting that companies are looking for competitive advantage and market viability.
Nicolas MerizziPrincipal, Deloitte Consulting Cloud Strategy Offering
Nicholas Merizzi, Deloitte Consulting’s cloud strategy offering lead, also cited disruption as a factor driving demand for industrial clouds.
“The analogy we often make is that our customers are in a race without pit stops and have to fix, adjust and improve their cars mid-race because speed matters,” he noted.
Merizzi cited the example of a traditional financial services company hoping to reinvent itself to keep pace with its fintech rivals. “Industrial cloud is a way to save time to market,” he said.
Regulatory obligations are also leading companies to consider industrial clouds with built-in compliance. Ward pointed to compliance requirements, such as international trafficking in arms regulations – which apply to defense and aerospace manufacturers – and HIPAA as among the critical issues driving the clouds. of the industry.
“Every hospital CIO would love to have the power of a major hyperscaler at their fingertips, knowing that fundamental compliance is still in place under the hood,” Ames added.
Roles of Service Providers
Industry offerings from cloud providers can launch organizations on a faster path to transformation and compliance. But there is still plenty of room for consultants and service providers. The industry’s wide variety of cloud options opens up an opportunity for consulting services.
And the potential for additional business increases once a customer selects a particular industrial cloud path. The reference framework and architecture approach, for example, leaves much of the work to customers who may seek outside assistance.
Industry executives “don’t meet customer needs without strong in-house cloud capabilities,” Ames said. “A generic cloud, plus a whitepaper, is still a lot of work and a lot of risk for the customer.”
Customers need “higher-order services” that implement integrated concepts in industry-specific frameworks, he said.
Insight’s Taglienti said his company is focused on the last mile of the cloud journey, partnering with customers to interpret how to use a particular framework to meet their industry needs.
“It’s the interpretation and subjectivity part that’s really important,” he said.