The slides provide a quick overview of the trend towards Industry (Vertical) Clouds. The slides provide summary information, a list of trends to watch and links to additional resources

1. © 2016 IBM Corporation
IBM Market Development & Insights
Industry Clouds
IBM HorizonWatch 2016 Trend Brief – External Version
Bill Chamberlin, Principal Client Research Analyst / IBM HorizonWatch Community Leader
Polly Frierson, Product Manager - Cloud, Mobile and Developer
May 9, 2016

2. © 2016 IBM Corporation
IBM Market Development & Insights
 Purpose: The slides provide a quick overview of the trend towards Industry (Vertical)
Clouds. The slides provide summary information, a list of trends to watch and links to
additional resources
 How To Use This Report: Use these slides as a learning document and a springboard to
further research and reading on this trend. You may want to view the slides in slideshow
mode so you can easily follow the links
 Available on Slideshare: The latest version of this file (and other HorizonWatch Trend
Reports for 2016) will be available publically on Slideshare at
http://www.slideshare.net/horizonwatching
 Please Note: This report is based on internal IBM analysis and is not meant to be a
statement of direction by IBM nor is IBM committing to any particular technology or solution.
About This Trend Report
2 HorizonWatch Emerging Trends Brief: Industry Clouds (External Version)11May2016

3. © 2016 IBM Corporation
IBM Market Development & Insights
Overview: The market for Industry Clouds
Definition:
The industry cloud consists of a landscape of cloud service providers
offering a set of cloud-based services that focus on specific industry
use cases. Industry cloud companies are typically defined by five
key criteria:
1. Has a co-founder or executive with specific domain expertise
2. The ability to create focused customer value from user data,
lower customer acquisition
3. Lower acquisition costs due to a high frequency of reference
selling
4. Potential to achieve high market share
5. “Layer cake” strategy to offering multiple vertically-tailored
solutions
3
Enabling Technologies:
Enabling technologies for industry clouds encompass core cloud
services and technologies across all elements of the enterprise IT
stack, including infrastructure, applications, and business
processes, as well as big data analytics. Industry clouds offer
SaaS-based services across multiple areas, including marketing,
financials, IT management, security, ERP, SCM, HCM, social, and
many others.
11May2016
“The number of Industry Cloud
Platforms will exceed 100 by 2016.” IDC
Industry Cloud Infographic
“IDC predicts that there will be more
industry-specific cloud services
platforms and marketplaces run by
leaders in each industry seeking to
attract communities of thousands of
innovators to create valuable new
services.” IDC Worldwide and U.S. Cloud
Forecast by Vertical, 2015-2019
HorizonWatch Emerging Trends Brief: Industry Clouds (External Version)
Prepared by MD&I, TBR, Inc
IBM Video: An Introduction to IBM
Watson Health Cloud for Life Sciences

4. © 2016 IBM Corporation
IBM Market Development & Insights
Industry Clouds: 4 trends to watch in 2016
1. LOB influence creates demand. LOB influencers
will continue to emerge as cloud decision makers,
drawing investments closer to the business and
creating demand for industry cloud offerings.
2. Access to domain expertise and best practices
is a key driver. Industry clouds counter traditional
barriers to cloud adoption by offering “out of box”
functionality, security, compliance, and integration,
which will increasingly hold favor with firms seeking
to establish ROI cases for cloud investments.
3. Data economies starting to form. Data
architecture complexity, cost, and other issues will
prompt firms to seek access to third party data and
industry cloud big data analytics solutions that can
provide pre-configured assets to accelerate time to
value for harnessing their internal data, support
business decision making and spur the creation of
new business models
4. First mover advantage still available. Competitors
are racing to secure first-mover advantage as a
keystone platform provider and focusing on securing
their niche industry value propositions.
4 HorizonWatch Emerging Trends Brief: Industry Clouds (External Version)11May2016
“Industry Clouds will significantly disrupt the
business structure and operational strategy of
1/3rd of the top 20 market leaders in most
industries by 2018.” IDC Industry Cloud Infographic
“By 2018, over 50% of enterprises will create
and/or partner with industry cloud platforms to
distribute their own innovations, source others'.”
IDC Worldwide IT Industry 2016 Predictions
Inc. Why Companies Are Shifting to the Industry-
Specific Cloud
“Industry Clouds, while often driven by LOB,
represent one of the greatest opportunities for
CIO’s in decades.” IDC Industry Cloud Infographic

5. © 2016 IBM Corporation
IBM Market Development & Insights
Industry Clouds: Adoption Challenges
 Industry clouds need to be industry-specific. For
industry clouds to be successful, they need to cater
specifically to the requirements of a niche market.
Industries with complex regulations (i.e. Finance,
Banking, Healthcare) and/or dispersed workforces (i.e.
Transportation) are examples of industries with specific
requirements.
 Industry clouds can’t cover all needs.. This inherently
creates challenges in sourcing and integrating multiple
products to address a business need.
 Security concerns. A lack of security features in cloud
is preventing companies from adopting this technology.
Security issues extend to industry clouds, and will be a
key inhibiting factor of adoption in sensitive industries.
 Business case & ROI proof points. Enterprises need
to build the business case and gain top-down buy-in for
industry cloud transformation. For organizations with
complex existing IT environments, the cost-benefit of
transitioning to an industry cloud (or the complications of
adding additional complexity to the existing architecture)
will be a key consideration in evaluating adoption of
such offerings.
5 HorizonWatch Emerging Trends Brief: Industry Clouds (External Version)11May2016
“The security of patient data on the cloud is a
crucial issue that is likely to restrain the
growth of the healthcare cloud computing
market.” MarketsandMarkets Healthcare Cloud
Computing Market
Right Scale: 2016 State of the Cloud Survey
CIO.com Cloud adoption soars, but integration
challenges remain

6. © 2016 IBM Corporation
IBM Market Development & Insights
Selected links to additional resources
• CIO: Cloud Services move from Horizontal to Vertical
• Forbes: The Five Hallmarks Of An Industry Cloud Company
• IBM: IBM Watson Health Cloud Capabilities Expand
• IBM: Taking the New Era of Computing to Healthcare
• Inc. Why Companies Are Shifting to the Industry-Specific Cloud
• IDC: Public Cloud Computing to Reach Nearly $70 billion in 2015
Worldwide, According to IDC
• Microsoft: The Emergence of Industry Clouds
• OpenStack: Building Clouds for the Financial Industry: Challenges
and Solutions
• SearchITChannel: Verticalization of cloud applications: Channel play
• Techcrunch: What Makes An Industry Cloud Leader?
• Techtarget: Industry cloud aims to convert buyers into suppliers
• Talkin’ Cloud: Cloud Computing Vertical Markets
• Techtarget: Industry Clouds on the Horizon?
• ZD Net: Why it's a good time to find an 'Industry Cloud' dance partner
• ZD Net: Mapping the Industry Cloud landscape
6 11May2016 HorizonWatch Emerging Trends Brief: Industry Clouds (External Version)
Emergence Capital (via TechCrunch article)
What Makes An Industry Cloud Leader?
Diginomica The rise of vertical
industry cloud applications