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The cloud's future is vertical

From generic services to industry-specific apps, the cloud is growing up

A little-remarked shift of how the cloud is used and who uses it is well underway - and it could be music to your ears.

Low-hanging fruit

When cloud services first started, and for some considerable time afterwards, cloud services providers concentrated, quite naturally, on the low-hanging fruit. The battleground was centred around key but generic applications such as email, office productivity and storage, which quickly became the first to be moved into the cloud. Cloud service providers tended to concentrate on these, competing on availability, level of service, price, location and host of other features and criteria. Now, though still important, such services are table stakes: pretty much every cloud service provider offers some form of them, although key differentiators remain across providers.

Following this early stage, enterprises of all sizes and types have increasingly been integrating technology into their core business processes. Manual processes are withering away. Even organisations which have relied to a great extent on proprietary or highly customised applications are now moving or planning to move some if not all of those processes into the cloud, prompted by the increasingly attractive economies of scale that the cloud business model provides.

As a proof point, IDG Enterprise's 2016 Cloud Economics study showed that 70 percent of organisations now run at least one application in the cloud and 16 percent plan to do so within 12 months, while 56 percent of organisations are in the process of identifying IT operations that are candidates for cloud hosting. The top benefits that respondents cited were lowering total cost of ownership, replacing on-premise legacy technology and enabling business continuity.[1]

Verticals to the fore

This shift has prompted a growth in interest in vertical-specific services and cloud applications. Apart from the increases in internal efficiency and lowered costs that a thoroughly planned and deployed cloud implementation can deliver, the cloud offers an efficient way of communicating with partners and customers. Using standard interfaces, organisations find that conducting business via the cloud results in huge cost and time savings.

Additionally, the old, inflexible ways of deploying and using software can be transformed by adopting cloud methodologies. As industry analyst Phil Wainewright of Diginomica points out: "Cloud vendors have an architecture that allows them to layer on extra functionality while still allowing upgrades to the underlying code base. This means they can introduce new features more rapidly while still retaining the industry-specific capabilities."[2]

Integration, integration, integration

Vertical-specific cloud services have, inevitably, been concentrated initially on large industries such as the financial sector and healthcare, but this is changing. As just one example, with the growth of digitalisation initiatives such as Industry 4.0, manufacturing and production companies are increasingly making use of cloud services. These include SaaS, analytics, and product design - among a host of others. And there are cloud providers specialising in services for most industry segments.

Clearly, the cloud is not a universal panacea, nor is it without its challenges. Integration with existing systems in particular can still be a challenge, so it is important to find help by selecting a cloud integrator. They might be themselves a cloud services provider or a standalone third party but, ideally, they would offer applications and services tailored to your industry-specific requirements, but integrated with standard productivity applications and PaaS, all running on a big cloud vendor's rock-solid infrastructure for peace of mind.

One thing is clear: the market for cloud services is expanding fast, and even if the precise service you need is not yet available, chances are that it will be soon. And if the services you want are available, it's time to start planning.


1 2016 IDG Enterprise Cloud Computing Survey. http://www.idgenterprise.com/resource/research/20...

2 Diginomica - Why cloud applications are going vertical. http://diginomica.com/2015/08/19/the-rise-of-vert...

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