Dec 23 2015   2:18PM GMT

Industry cloud boon for IT, bane for unwary tech vendors

Jason Sparapani Jason Sparapani Profile: Jason Sparapani

IT departments
IT organization
Vertical markets

Industry clouds will be the next big cloud thing, predicts research shop IDC, and they present a huge opportunity for IT. Technology vendors that don’t pay attention, though, may see business slip through their fingers.

Industry clouds are joint ventures among organizations in a vertical market that give members access to industry-specific cloud services — and in many cases they’re forums for sharing information to solve problems (see “2016 forecast: Industry clouds on horizon? IDC thinks so“).

“This is probably one of the greatest opportunities the IT department has seen in a long time,” said IDC analyst Eric Newmark. Today, a lot of IT purchases are not made by IT — they’re made by marketing, finance and other business departments that want a quicker route to the latest technology.

Industry cloud a new hope for IT

“When I look at what keeps CIOs up at night, I think it’s more about, ‘How do IT organizations reposition themselves and their companies as being something that helps to generate top-line revenue rather than being viewed as just sort of a cost center?'” Newmark said.

One way for IT to change that view is by helping the organization identify opportunities for creating or being a part of an industry cloud, he said. First, IT should call out any special expertise or value it can offer up to other organizations in the industry — for a profit. For example, an organization may have custom-developed a technology that addresses issues that a particular industry needs to address, like compliance. Can it offer that as a service in the cloud?

Second, IT should factor in the concept of industry clouds in the traditional “build vs. buy” approach to new technology, Newmark said.

“As companies consider buying particular software applications or particular capabilities, you’ll start to have the option of ‘Do we want to buy a software package for this? Or do we want to consume this as a service in an industry cloud?” Newmark said.

For tech vendors, a dark side

While industry clouds can be a powerful new tool for IT, they may be a looming danger for technology vendors — that is, if they don’t keep a watchful eye on their markets.

When organizations come together with a tech vendor on an industry cloud to provide certain technological and operational capabilities, that vendor very quickly takes on a lot of business indefinitely. Other vendors that sell the same wares will essentially be shut out of the circle.

“It’s very important that technology vendors out there pay close attention to this market because they’re going to have new competitors popping up left and right,” Newmark said.

Let us know what you think of this post; email Jason Sparapani, features writer, or find him on Twitter @jmsparapani.

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