When experts talk about today’s hottest cloud computing trends, the focus usually centers on edgy functions like serverless, Kubernetes-backed blockchain, AI and cloud gaming. These are all important and impactful, but one comparatively under-discussed trend that should — and probably will — get more attention is the rise of industry-specific cloud ecosystems.
It’s starting to happen in highly regulated industries. Banks, insurance companies, government agencies, healthcare institutions and telco providers (to name a few) have kept computing functions inside their data centers longer than most because they felt the need to maintain tight controls over mission-critical data. Yet they’re being challenged by cloud-first upstarts in the market. To compete on costs and do a better job engaging with customers, they’re gradually working cloud-related initiatives into their operations.
Verticalized clouds are making it easier for these industries to make the shift. Packaged up as bundles of services, tools and applications, these industry clouds give companies turnkey capabilities that solve the most important use cases in their particular sectors.
The main things they’re solving are the business, compliance and management needs for a particular vertical. That will be the incentive to draw customers onto the cloud. Previously, companies held off moving to the cloud partly because they didn’t see the need to pay someone else to run a data center. Today, cloud providers can offer built-in subject matter expertise along with the ability to run applications on top of a cloud infrastructure. That will increase the velocity of cloud adoption.
Creating individual company ecosystems is costly and time-consuming. With vertical clouds in place, companies can run on any infrastructure that aligns with their industry, enjoy streamlined compliance, and comfortably access, transfer and manage data as needed to increase opportunity and revenue.
Industry clouds aren’t brand new. The idea essentially dates back to the early days of the cloud. “Community clouds,” in fact, were discussed in the first version of NIST’s definition of cloud computing back in 2009.
However, they are becoming more popular. In banking, for instance, DevOps.com notes that Goldman Sachs and AWS are rolling out a set of data management and analytics solutions under an umbrella called Goldman Sachs Financial Cloud for Data. IBM collaborated with Bank of America to create its Cloud for Financial Services. Microsoft also has announced a financial services cloud that’s being used by cloud-first entities such as Virgin Money U.K.
How big could the market grow? Deloitte estimates that as much as 64% of the current $1 trillion cloud market could benefit from industry clouds. That’s a $640 billion potential market.
What To Prepare For
While industry clouds have eliminated some of the pain associated with cloud adoption, they’ve exposed some issues as well. The biggest problem is that some customers assume industry-specific clouds are turnkey operations that handle all of the tasks that IT has had to shoulder in the past. They don’t. They provide blueprints for vertical transformations, but most don’t offer data backups or comprehensive data protection. They don’t remove the need to perform your own internal security analysis, such as looking for encrypted files from ransomware, and they likely won’t ensure multifactor authentication to the service or to the underlying infrastructure.
If you’re considering adopting an industry-specific cloud solution, here are some moves to make.
• Understand ownership. Define the lines of responsibility around an application and separate them into the different fields of responsibility. Tasks will be overseen either by the end user of service, the administrator or the cloud provider itself.
• Prepare for shifts in roles. If your organization runs its own data center, it has a team of administrators running the infrastructure that ensures compliance with industry regulations. Moving to the cloud shifts the management of infrastructure off-site, but the same set of administrators will still oversee the monitoring and reporting functions of the compliance process.
• Negotiate an off-ramp. Industry-specific clouds have their advantages. However, if it’s not providing the kind of value you’re expecting, make sure to include an addendum to the agreement allowing you to shift to a new platform. Never take an on-ramp without knowing what the off-ramp looks like.
• Consult with regulators. The biggest advantage industry clouds offer is their easy adherence to certifications and compliance regulations. However, it’s critical to understand the full regulatory requirements in your field. Regulators themselves can serve as useful sounding boards.
• Get third-party opinions. Vertical cloud platforms differ in size, scope and coverage, and users can’t expect to understand all of the nuances. Seek out recommendations from other industry sources — partners, former colleagues, analysts — to ensure the platform you’re considering is right for your organization.