By Jim Lundy
The Race to Win the Cloud Wars Has Shifted
It is no longer about horizontal SaaS Services. The shift to industry clouds is here.
This blog discusses this shift and how many Tech Titans have already made their move.
The Shift to Business Buyers
In a recent blog I wrote about the shift to business unit tech stacks. Business Leaders are increasingly calling more of the shots about the technology they use. With that in mind, they start to look for providers that understand their business and the market they are in. Enter Industry Clouds.
What are Industry Clouds and Why Now?
Industry Clouds are a version of a provider’s software service offering that are tailored to meet more of the needs of that industry than the standard horizontal offering. Industry Clouds often leverage partners’ service offerings that integrate with the core offering via APIs.
Note, this may seem like a deja vu moment because over 15 years ago, Industry Solutions were the rage, but they were too hard to deploy because of the customization that was required. Now with APIs, Pluggability and Low Code, nearly all those integration issues have been overcome.
Business Buyers and Chief Digital Officers are Taking Over
Business Buyers are flocking to industry clouds, but the truth is that Industry Clouds started over 12 years ago when vendors such as Amazon, Google, IBM and Microsoft announced their own versions of a Government Cloud. Since then, each provider can point to significant revenues tied to that one strategic move of launching a government cloud service.
What are Microsoft and Salesforce Doing Regarding Industry Clouds
Salesforce announced over eight Industry Clouds in the Fall of 2020. Microsoft announced four Industry Clouds in March 2021. Both have seen success with some of those offerings -noting that Microsoft still leans heavily on its Azure Government Cloud. Salesforce faced skepticism when it launched its Clouds, but it already had seen pretty solid results with the Financial Services Cloud it had launched years before. So both providers have seen solid success with this approach and both are showing solid growth (Note, Salesforce did just offer an earnings warning this week).
Bottom Line
Industry Clouds is the new way to market to business leaders. Technology providers need to recognize this shift and begin plans to launch at least one industry cloud beore the beginning of 2023. This work is not easy – and Aragon understands the needs of business buyers. If you are thinking about investing in Industry Clouds – consider talking to us about some of the things you need to do before making that leap.
This was the fifth blog in the Digital Workplace blog series by Aragon Research’s CEO, Jim Lundy.
Stay tuned! We publish a new blog every Thursday.
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