Posted: 10 Feb. 2022 7 min. read

The industry cloud opportunity

 A blog post by Brian Campbell, principal, Deloitte Consulting, Nicholas Merizzi, principal, Cloud Strategy, and Diana Kearns-Manolatos, senior manager, Deloitte Center for Integrated Research


What do a 100-year-old organization and a digital native have in common? Both can have insufficient digital processes in place and are constantly needing to innovate, grow, change, and adapt. Organizations today, irrespective of their legacy, need 21st-century digital blueprints—whether they are replacing traditional technology or creating a new solution. They need modular capabilities and architectures to slowly shift from the monolithic systems of the past and to empower them to change more flexibly and incrementally. They need to rethink methods to maximize industry solutions and partner with ecosystem players who may advance and accelerate their respective unique and differentiated strategies. Industry clouds are fast gaining traction and adoption to help organizations of all shapes, sizes, and industries accelerate their digital transformations while enabling their ability to win. 

Industry clouds: What are they, and why do they matter?

Industry clouds are industry sector-level, modular digital solutions that serve as high-tech building blocks to accelerate 360-degree digital development from a single-user journey to new enterprise capability. Cloud providers are heavily investing in industry clouds to bring in increasingly sophisticated and integrated AI, IoT, 5G, cyber, blockchain, augmented and virtual reality, digital twin, and other capabilities to help organizations accelerate their digital journeys.

In our new Deloitte Insights research, “Reimagining digital transformation with industry clouds,” we estimate that as much as 64% of the US $1 trillion cloud market (as expected by 2024) could benefit from industry clouds, making it a $640 billion potential market. Industry clouds are becoming a cornerstone for digital-first business models as organizations embrace this business-as-a-service (BaaS) model that brings together cloud providers, system integrators, and internal developers with a new buy-build equation.

Effective steps to make the most of the industry cloud opportunity

Start with strategy. Start with your enterprise strategy as the North Star and use strategy to define your organization’s top digital use cases. This will help you focus on driving forward digital capabilities that will help your organization to grow, compete, and win in the market. It can also give your organization clear guidelines and guardrails when determining what should be built in-house that is differentiated and proprietary and where to take advantage of external partner resources. Don’t start by reviewing an inventory of industry clouds that may or may not be valuable to your business.

Your business strategy team should partner with technology leadership to set the competitive strategy for digital, identify opportunities for industry clouds, and define where internal build resources would be best deployed. Internal talent can be tasked to focus on the 20% of capabilities that deliver the organization’s competitive advantage. Examples can be as wide as customization of an AI model to create a unique personalized experience for a retail customer or integrating an API capability into your proprietary asset management system for institutional clients.

What comes after strategy?

Implementing industry clouds requires a new operating model, and our research has shown several approaches for marketplace and organizational change. 

To advance collaborative marketplace and co-creation strategies, many organizations are embracing platform and ecosystem business models that enable competitors and collaborators to solve shared industry problems and monetize their solutions. In these cases, first-movers stand to gain the greatest advantage.

At a more granular level, this shared services/BaaS operating model requires enhanced demarcation between internal and external team responsibilities. While an internal team may be responsible for setting its strategy and developing the differentiated “secret sauce” technology capabilities, external technology partners, on the other hand, might focus on adapting and integrating the industry cloud solution and/or integrating multiple systems together with a focus on interoperability and evolving capabilities.

And at the most granular level, engineering pods that bring together business and technology leaders as product owners (not process drivers) with shared objectives and key results (OKRs) can enable strategists and engineers to work together to redesign the enterprise with better integrated, agile innovation teams.

How can organizations benefit?

In a world where the capacity to change is a leading indicator for exponential enterprises—which Deloitte’s analysis has shown for more valued and less volatile organizations—industry clouds can hypercharge an organization’s capacity to change. Their preconfigured capabilities kick-start the digital build, and continuous innovation-led investment from ecosystem partners allows users to achieve greater nimbleness, scalability, stability, and optionality. While not every industry has an equal number of industry clouds at the same level of maturity, effectively partnering externally can be beneficial for transforming your organization and the industry. Industry clouds allow organizations to focus internal time, energy, and resources on the most critical and strategic tasks in a highly competitive tech talent environment.

What next?

In a constantly shifting business environment, it is imperative to plan well so that organizations can focus internal resources and capabilities in areas where such resources can contribute toward building solutions that can help differentiate from competitors. As your organization taps into the full potential of an industry cloud, consider where you plan to compete and win. In addition, using strategy as the North Star, embracing an engineering mindset, and working in a partnership model that can drive customer success can help harness the full potential of industry clouds.

For more on this topic and specific industry examples and use cases, read our research: Reimagining digital transformation with industry clouds.

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David Linthicum

David Linthicum

Managing Director | Chief Cloud Strategy Officer

As the chief cloud strategy officer for Deloitte Consulting LLP, David is responsible for building innovative technologies that help clients operate more efficiently while delivering strategies that enable them to disrupt their markets. David is widely respected as a visionary in cloud computing—he was recently named the number one cloud influencer in a report by Apollo Research. For more than 20 years, he has inspired corporations and start-ups to innovate and use resources more productively. As the author of more than 13 books and 5,000 articles, David’s thought leadership has appeared in InfoWorld, Wall Street Journal, Forbes, NPR, Gigaom, and Prior to joining Deloitte, David served as senior vice president at Cloud Technology Partners, where he grew the practice into a major force in the cloud computing market. Previously, he led Blue Mountain Labs, helping organizations find value in cloud and other emerging technologies. He is a graduate of George Mason University.

Brian Campbell

Brian Campbell

Principal | Deloitte Consulting LLP

Brian is a principal in Deloitte Consulting’s Strategy practice. Brian specializes in growth strategy, go-to-market strategy, business model transformation, and digital transformation with a focus on high-tech. He spends a significant amount of his time working with the cloud hyperscalers and other technology leaders to drive growth, innovation, and both top and bottom line improvement for clients across industries. He co-leads Deloitte's Technology-Powered Business Transformation offering.  Brian’s functional experience spans strategy, sales, marketing, finance, IT, HR, and operations. When he’s not working, Brian loves to ski, bike, and play golf. A proud Canadian, he is also an avid traveler and visits family and friends all over the globe whenever he gets the chance. His greatest passion is being a Dad to his two young kids and husband to wife Ally.

Nicholas Merizzi

Nicholas Merizzi

Principal | Cloud Strategy

Nicholas is a principal in Deloitte’s Cloud Strategy offering where he supports global clients across multiple industries. Nicholas leverages more than 20 years of experience to enable global organizations achieve their cloud and digital goals at enterprise scale. Whether it be mapping a path for transformation, modernizing complex IT systems, or exploring emerging technologies that enable business strategies, Nicholas has proven success helping companies navigate their specific digital transformation needs. It’s his goal to bring strategy, depth in infrastructure, and data center acumen to clients by being at the forefront of the cloud and digital tech transformation landscape. Today, Nicholas leads Deloitte’s global Industry Cloud offering, which is a portfolio of industry-specific business capabilities activated by cloud enabled services.