So what is an Industry Cloud? In 2014 at IDC, Eric Newmark and I started to research the emergence of a new enterprise market. Social networks had taken off, and people had begun to self-organize in groups with common interests. Think of your group of friends on facebook, or the members in a website focused on a hobby or interest you pursue. Sociologists and social media analysts began to use the term community clouds to describe these digital tribes. We believed that ultimately, some of the most important and economically significant examples of this would emerge in industry, and we coined the term Industry Clouds. Industry clouds would be communities where companies from a specific industry (or set of industries) would come together to share platforms, software, and data to improve their performance, resilience, and security.
While this may sound somewhat altruistic, once we started looking for examples, we were surprised to see that in fact this was already starting to happen! We identified three principle business models based on observations.
Technology Driven – A market participant offers a fit for purpose technology platform to others in it’s industry. An example of this would be suppliers of industry standard platforms like FedRAMP. There are a large number of suppliers offering a common set of certified FedRAMP services via the US government FedRAMP marketplace.
Operations Driven – Mercy Technology Services is a great example. Mercy provides its world class EPIC implementation and clinical documentation (and best practices) to small community hospitals via the cloud. This is a lifeline for many struggling hospitals, and goes well beyond simply offering a SaaS application. Mercy’s data and clinical expertise is shared, and the combined data and analytics are helping this entire community move forward.
Information Driven – These are communities where data is shared to reduce cost and risk for all participants in a market. These are especially relevant in highly regulated industries like financial services, life sciences, and healthcare. One example would be banks sharing data to reduce the cost and risk of complying with Anti-money laundering (AML) and know your customer (KYC) regulations by sharing data on the beneficial owners of LLC’s. Information driven industry clouds are also at the vanguard of data monetization, making them especially interesting to companies looking to generate new digital revenue streams.
These models are not mutually exclusive. Many Industry cloud suppliers are trying to build out capabilities in all three models. Large enterprise software companies have recognized that these are in fact alternate SaaS deployment models for their applications that better meet the needs of their customers. Vendors like Salesforce, SAP, and VMware have embraced the industry cloud model.
By 2020, we had identified hundreds of the industry communities. Many of these groups are examining the opportunities for data monetization. For industry practitioners looking to add contextual data to their ML / AI initiatives the availability of data from a large community of like companies can create enhanced understanding and new knowledge.