Innovate to Elevate - Unleashing the potential of Industry Cloud Platforms to deliver vertical innovation

As cloud adoption increase, so do cloud solutions. With 60% of organizational data presently residing in the cloud, and businesses worldwide increasingly adopting cloud solutions, numerous entities are discovering that versatile cloud platforms might not consistently address the unique requirements of their respective industry verticals. Consequently, they are now paying attention to explore Industry Cloud Platforms (ICPs).

While general-purpose cloud platforms provided by Cloud Service Providers (CSPs) played a crucial role in advancing business technologies, they primarily focus on addressing “horizontal” market needs. Specialized enterprises frequently encounter difficulties when utilizing general-purpose cloud platforms as they do not address industry-specific use cases. To address challenges specific to “vertical” markets, ICPs are going to be essential in next few years. Among the array of cloud service options, ICP stands out as a growing choice for diverse industry verticals, offering tailored and customizable solutions.

But before industry cloud platform got coined, firms adopted Industry Solutions or Industry Specific Solution developed by Independent Software Vendor (ISVs) for the IT needs of businesses. The shared element in both cases is a dedication to industry innovation, encompassing the creation of a range of solutions tailored to specific sector or industry vertical.

What are Industry Solutions

Industry Solutions are designed to cater to the customized requirements of particular industries and consist of pre-built base platforms, components, data sets, and tools. Traditional Industry solutions used to create enterprise systems as super set of all the functionalities required across the industries in their application. Based on the customer requirements they use to turn on /turn off these features.

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Limitations of Industry Solutions

The above approach had some obvious shortcomings. Industry solutions are often designed to meet the common needs of a specific industry vertical. However, they may not cater to the unique requirements of individual businesses within that industry. This lack of flexibility hinders customization to address specific processes. Many businesses already have a mix of legacy systems and software and ensuring enterprise wide integration with a new industry-specific solution may require significant time and resources. More importantly, industry solutions may not always keep pace with the rapidly evolving technological landscape. Businesses relying solely on industry-specific solutions may miss out on the latest innovations and advancements that could provide a competitive edge for the firms to stay in business for a foreseeable future.

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Industry Cloud Platforms

Industry cloud platforms represent a cutting-edge iteration of cloud computing. Distinguished by their customizable and efficient features, these platforms stand out due to their specialized emphasis on vertical market concerns, differentiating them from conventional cloud systems. ICPs refer to cloud-based platforms, applications, or services that offer industry-specific information, technology, and business capabilities. They differ from conventional cloud solutions because of their vertical integration and modularity, collaborative features, and capacity to create network effects. It is often developed by partners who integrate profound industry knowledge, analytics and automation using cloud technology.? These specialized solutions offer industry cloud users tailored use-case functionality to enhance productivity and differentiation.

?They present inherent advantages compared to “horizontal” clouds offerings, encompassing industry-specific security, compliance, user experience (UX), and business processes. Additionally, industry cloud platforms incorporate tailored data models, artificial intelligence, and machine learning (AI/ML) services, along with numerous specialized integrations

In a recent survey done in 2023, Gartner found that about approximately 39% of enterprises had started the adoption of industry cloud platforms, with another 14% in pilots and 17% considering deployment by 2026. A majority of the enterprises familiar with the concept of industry cloud platforms identified themselves as adopters or potential considerers of industry-specific cloud platforms.

Numerous key players in the ICPs market are providing specialized industry-focused solutions and services tailored to specific industries or sectors that optimize, extend, and transform core business processes. These players are creating a broad, diverse portfolio of extensible cloud-based solutions that can readily integrate with and augment the overall capability.

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Key Drivers for Industry Cloud Platforms

The Industry Cloud strategy is driven by several key drivers:

Evolving Market Boundaries - Organizations commonly function across industries with dynamic boundaries. They consistently review their value chains and even the needs of their end customers to identify growth prospects and formulate innovative business models. Adjusting to changing enterprise boundaries frequently requires the assimilation of fresh capabilities from various industries sources.

Flexibility and Expandability - The ability to add functionalities within IT applications and the business network necessitates an architecture designed to facilitate modular extensions. Successfully introducing a new feature into an application without causing major issue is achievable when it is added as a modular extension, avoiding modifications that introduce complexity to enterprise systems. Creating a business domain model that is both user-friendly and comprehensible is crucial to rapidly design, build, and test new solutions. The data model, the domain model, and APIs are important to access the processes of the ICPs.

Interactive Ecosystems - Open platforms attract multiple participants, encouraging the development of ecosystems that deliver business value and growth. The amalgamation of ecosystem and diverse digital technologies offers a compelling array of assets for creating innovative business solutions.

Pace of Innovation - Transforming a concept into a business process and subsequently into a solution to facilitate this process requires an innovation space that encompasses all the necessary tools and content for rapid and predictable development. This enables developers and business users to concentrate on accomplishing tasks and delivering new solutions efficiently.

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What Industry Cloud Platforms is “not”

An Industry Cloud Platform is not about “a new Industry Solution”. Instead, it involves offering a set of products designed to meet highly specific requirements and subsequently presenting them as individual, cloud-based services. These services can be seamlessly integrated to form a comprehensive system, offering a more streamlined process compared to traditional methods. Additionally, incorporating new functionalities into the customer's primary enterprise system can now be achieved with minimal disruption.

Benefits

With a modular approach built around cloud services, though, it's now possible to add support for those kinds of business processes relatively quickly. Businesses can roll out pilot programs and test the feasibility of new business models in months instead of years.

The configurability of ICPs stands out as a noteworthy feature. Users have the flexibility to tailor their cloud computing system to align with their business processes and address specific customer pain points within their vertical market.

ICPs enhance overall operational efficiency by offering customized industry-specific services. This can result in improved services, such as reduced time spent on manual tasks that can be automated using AI-powered tools integrated into the industry cloud. More importantly, it also reduces risk of long-term vendor lock-ins.

Conclusion

The diversity within industry cloud ecosystems, characterized by the participation of numerous Independent Software Vendors and System Integrators along with Cloud Service Providers, constitutes a crucial mechanism through which Industry Cloud Platforms contribute value. The "hyper-specialization" of these ICPs and their services ensures that you acquire only the necessary solutions, eliminating the need to invest in costly infrastructure which is hardly utilized to its full capacity which reflects a "best of need" rather than a "best of breed" approach.

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References:

https://www.gartner.com/en/articles/what-are-industry-cloud-platforms

https://www.pwc.com/gx/en/news-room/assets/analyst-citations/idc-industry-cloud.pdf

https://betanews.com/2023/06/13/industry-cloud-platforms-the-complete-guide/

https://blog.sap-press.com/what-is-saps-industry-cloud

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