Microsoft is going to have lots of clouds for industries. Here's why they matter

Industry clouds like healthcare and retail are there for Microsoft partners to build services on top of.
Written by Mary Branscombe, Contributor

Microsoft already has two vertical 'clouds for industry' for healthcare and retail; expect more. "These are the two first ones that came out but there'll be more to come," Takuya Hirano, Microsoft vice president for global alliances and systems integrators partners said during a recent announcement about the state of the Microsoft partner ecosystem.

The plan is to create several more industry clouds where there are opportunities for Microsoft partners and integrators to use their deep industry knowledge and Microsoft tools to create specific end-to-end solutions that fit those types of businesses.

Why go vertical?

The whole point of cloud services is that they're abstractions that can be used to build whatever an organization needs, so having vertical clouds might seem like slapping a marketing spin on existing options.

But industry clouds include specialised versions of general services. There's a healthcare version of Teams with extra features like being able to page someone in a specific role, like the on-call specialist from a particular department. You can build a chatbot for ordering pizza or answering customer support questions with the Azure bot tools, but Microsoft's Healthcare Bot service makes it easier to make chatbots for health. It includes a symptom checker, vetted medical content and language understanding models that are already tuned to understand medical and clinical terminology, so developers don't have to dig into the language-understanding Cognitive Services to teach them that 'rash' is going to be a skin condition rather than a way to describe hasty choices.

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But specialised as it is, it's now an Azure service rather than part of Microsoft Cloud for Healthcare. So why have specific industry clouds?

A big part of it is to make it faster for partners to build services in the specific industries where they have expertise, Casey McGee, vice president for ISV partner strategy at Microsoft, said. Their industry specializations and the scenarios they see as priorities for those industries determine what 'building blocks' go into the vertical industry clouds.

"Our partner ecosystem in many cases has as much depth, if not more, on the industry side than Microsoft does. Many of these companies have been serving one industry, or one or two industries, for decades."

The Microsoft Research NeXT initiative turns research into new lines of business, and it started looking at healthcare opportunities in 2015, and that included working with partners like Nuance on systems to automate patient documentation as well as working directly with healthcare and research organizations.

More generally, Microsoft has been looking for partners that understand a specific sector, building its strategy for those partners and deciding which industry clouds to launch based on their customer demand.

"There isn't a single Microsoft Cloud for industries that happens without partners," McGee said. "In fact, in all the announcements that we made earlier this year, whether it was healthcare, retail, there are a subset of ISVs and services partners that play a crucial role in that launch. They not only provided feedback into that process but they're key."

For an extremely specific thing like tax audits, Microsoft might talk to partners who have the skills and knowledge but need Microsoft engineering help. Other partners have the knowledge and intellectual property but are looking for help from Microsoft to scale that up so they can work with more customers, and then have Microsoft help them find those customers and make the sales. 

With the industry clouds, Microsoft does the engineering to make components that partners use to create solutions and then helps them sell and run those. "They will be very much end-to-end solutions because the engineering team will get in and then the partner can leverage the building blocks to create solutions much more rapidly, and we support them in the go-to-market and execution as well," Hirano explained.

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The work Microsoft had been doing with Nuance on 'ambient clinical intelligence' (medical records that get created automatically from real-time transcriptions of patient appointments) showed up when Microsoft Cloud for Healthcare launched. With many doctors offering video appointments because of the pandemic, Nuance took the work it had been doing for its Dragon Ambient eXperience - a device with multiple microphones designed to sit on the wall of a doctor's surgery or hospital exam room and capture up to eight people talking at once to turn the conversation into details for patient records – and integrated it into Microsoft Teams.

Partners like Nuance are taking advantage of the Common Data Model (used by Dynamics 365, Teams and the Power platform) for their specific industry. That sounds like a more sophisticated version of Project Oakdale, the low-code way organizations can bring forms from their own line of business applications into Teams. 

The building blocks Microsoft creates for partners to use in industry clouds will be built for those specific industry scenarios; but what it learns by building them will likely show up in more general tools for Azure, Office 365 and Dynamics 365 down the line. 

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