It seems like you can barely look at a tech news site these days without seeing another headline about a new industry-specific cloud offering. These platforms differ from traditional cloud services because they have built-in capabilities to address some of the biggest challenges facing enterprises in specific industry verticals. Gartner® expects that by 2027, enterprises will use industry cloud platforms to accelerate more than 50% of their critical business initiatives, whereas in 2021, it was less than 10%.
So, what’s driving this growth? For one thing, many enterprises are adopting industry cloud platforms because they’re looking for ways to jump-start their digital transformations without getting overwhelmed by data complexity or opening themselves up to regulatory risk.
From the cloud providers’ perspective, the rapid growth they experienced in recent years has finally started to slow. IT budgets are under greater scrutiny, and many customers now recognize that public cloud isn’t always the most cost-effective option. Many companies started out paying data egress fees that didn’t seem like a big deal at the time, but these fees are starting to add up as data volumes increase. CIOs want to know that they’re getting good value for the money they spend on cloud, and offering industry cloud platforms is one way that hyperscalers aim to demonstrate that value.
What are industry cloud platforms, really?
Exactly what are customers getting when they buy an industry cloud platform? Cloud providers want to show they can offer more than just raw compute and storage capacity, and in some ways, industry cloud platforms meet that goal. They include built-in tools tailored for the needs of enterprises in specific industry verticals. This saves the customer from having to manually assemble those capabilities themselves, which is one reason industry cloud platforms can be a useful part of any digital acceleration initiative.
This is only the latest development in the convergence between the tech sector and traditional industry. The rise of connected vehicles is a perfect example of this. Today’s car companies are less like traditional manufacturers and more like tech companies that happen to make cars. It’s no wonder that new “industry tech” companies want to leverage the full power of the cloud, and that cloud providers want to make it as easy as possible for them to do so.
In addition to producing industry cloud platforms, cloud providers have invested heavily in an attempt to tap into industry-specific partner ecosystems. For example, AWS has more than 200 employees dedicated solely to serving the connected car sector.
That said, hyperscale cloud providers are not a one-stop shop for all your digital infrastructure needs—nor were they ever intended to be. Rather than providing a pre-assembled solution, an industry cloud platform gives you the tools and capabilities you need to build the solution that’s right for you. Most likely, you’ll still need the assistance of a managed service provider or systems integrator to really get the value you expect from an industry cloud platform.
Also, when you consider the possibility of vendor lock-in, it becomes clear that what’s best for the cloud provider isn’t always what’s best for the cloud customer. This isn’t to say that enterprises shouldn’t adopt industry cloud platforms; they just need to do it in a strategic manner that maximizes the value while minimizing the downside. In each of the verticals that industry cloud platforms typically cater to, there are specific reasons why going all in on public cloud wouldn’t make sense, and why a hybrid, cloud-adjacent approach would be the better option.
Gartner expects that by 2027, enterprises will use industry cloud platforms to accelerate more than 50% of their critical business initiatives, whereas in 2021, it was less than 10%.
How can industry clouds help, and where do they fall short?
There are a few industries that are particularly well-suited to take advantage of what industry cloud platforms offer. However, even in these cases, there are still drawbacks to a cloud-first approach.
Travel and transportation
Today’s travel and transportation industry is defined by the rapid proliferation of IoT sensors that provide a constant stream of data. When used properly, this data can enable improved customer experience and personalized service offerings. Purpose-built cloud platforms can help travel and transportation providers cut across silos to get a clear picture of all the data produced by these sensors, and then share it across their ecosystem of partners and service providers for maximum impact.
The common factor across travel and transportation companies is that they all serve a highly mobile customer base. For this reason, it’s essential for them to have distributed digital infrastructure that enables low-latency connectivity to users and endpoints wherever they may be—and wherever they’re going next. For example:
- Airports are analyzing video feeds from surveillance cameras to provide better security without harming the airline passenger experience
- Auto manufacturers are leveraging multiaccess edge compute (MEC) capabilities to enable vehicle-to-everything (V2X) communications, a key requirement for autonomous vehicles to operate safely
Just like travel and transportation, the healthcare digital ecosystem is made up of many diverse partners spread across different locations. We often think of healthcare clouds as a way to comply with stringent patient privacy regulations such as HIPAA. While these regulations are obviously a key area of concern for hospitals and physicians’ offices, it’s important to remember that today’s healthcare ecosystems extend far beyond the point of care. There needs to be consistent, compliant data sharing across the entire ecosystem.
In many cases, it’s difficult to say where healthcare ends and other industries begin. For instance, pharmaceutical companies must participate in both healthcare and manufacturing ecosystems, since they need to collaborate with research organizations and care providers to formulate new drugs and bring them to market safely.
This is just one example of how today’s healthcare ecosystem extends into some unexpected places. All these different partners need a common platform to help them share data with one another on demand; once again, the public cloud may not provide the reach needed to do that. In particular, universities that provide vital research capabilities are often located in remote areas that would be difficult to access directly from the cloud.
Healthcare ecosystem on Platform Equinix
Whether it’s capital markets, retail banks or payment providers, financial services companies need to quickly and consistently share data with all their ecosystem partners while also maintaining compliance with regulations such as GDPR, CCPA and PIPL. In many cases, they’re directly competing against born-in-the-cloud fintechs and other challengers that are better positioned to monetize their data. An industry cloud could help traditional providers modernize their operations to enable new revenue streams and a better user experience.
At the same time, latency is an area of concern in the industry. High-speed trading firms need to reliably execute trades in a matter of microseconds; if they can’t, rest assured that someone else will. In addition, being able to execute payments in near real-time is essential for payment providers to meet the high expectations of their end users. In both examples, a cloud-only approach may not get the job done—particularly if a company is exclusively locked in to one public cloud vendor.
Network service providers (NSPs) recognize that they need to shift away from an owned-and-operated infrastructure model. This is particularly true as they scale out their 5G networks. Telco cloud platforms can help provide the flexibility and scalability that NSPs need to stand up new 5G infrastructure quickly, without taking on an excessive capital burden.
That said, telco clouds are not an easy cure-all for all the challenges NSPs face in the 5G era. In particular, there’s still the question of how NSPs can get their data into and out of the cloud. The especially challenging part is providing secure, reliable Z-side connectivity—that is, establishing last-mile connectivity between the cloud and data’s final destination. For various reasons, doing Z-side connectivity over the public internet isn’t practical.
Platform Equinix helps take industry cloud platforms to the next level
The common theme across all the examples above is that industry cloud platforms can be helpful, but they aren’t enough on their own to help customers overcome all the challenges they face. Working with a colocation partner like Equinix could be the key to overcoming the built-in limitations of industry cloud platforms, including:
- Latency: The public cloud typically doesn’t allow customers to distribute infrastructure to the edge locations where users and workloads reside unless they acquire proprietary edge hardware solutions first. Platform Equinix® has a global footprint that spans 70+ metros on six continents, which makes it easy to deploy infrastructure in the locations that matter most to your business. With a level of proximity that the public cloud simply can’t match, you can ensure the extremely low latency that many modern digital applications require.
- Cost-efficiency: Deploying cloud-adjacent infrastructure on Platform Equinix allows you to get close to the clouds of your choice, without storing data directly in those clouds. Since you can move data into clouds on an as-needed basis, you won’t pay data egress fees every time you need to use your data outside the cloud.
Cloud-adjacent infrastructure on Platform Equinix
- Flexibility: The public cloud often bills itself as a more flexible way to deploy digital infrastructure. This can be true in certain cases, but not when vendor lock-in becomes a problem. Equinix digital infrastructure services give you the flexibility you need to change your infrastructure as your business changes. For instance, Equinix Metal®, our Bare Metal as a Service offering, allows you to deploy single-tenant compute and storage when and where you need it, and scale as your capacity needs change.
- Interconnection: To get their data to and from the cloud, enterprises need connectivity that’s reliable, secure and high-performance, and the public internet isn’t any of those things. Equinix Fabric®, our software-defined interconnection solution, can deliver where the public internet falls short. Customers can set new virtual connections on demand in seconds, not months. This helps them simplify multicloud networking and unlock the full power of their hybrid infrastructure.
For all these reasons and more, Platform Equinix could be the ideal place for businesses to amplify the benefits of industry cloud platforms, while avoiding the drawbacks. To learn more about our approach to cloud-adjacent storage and how it enables optimized hybrid multicloud, read the guide today.