What is industry cloud?

Industry cloud is a growing trend, with more than half of companies in Europe experimenting with platforms. Industry cloud enables businesses in the same sector to capitalize on useful data between themselves

The industry cloud is one of the trending topics in the business world right now.

According to a Gartner survey, up to 40 per cent of North American and European companies have begun to adopt industry cloud platforms, with another 15 per cent in pilots. Experts expect more companies to jump on the bandwagon over the next several years.

Not surprisingly, more and more businesses are considering an industry cloud, with many interested in developing their own platforms. Below we explore the potential benefits of an industry cloud and the different types of vendors that offer such solutions.

How industry cloud can benefit companies

Industry cloud platforms allow businesses operating in the same sector to share or sell data, technologies, and processes to each other. The potential benefits can be significant, as an industry cloud enables interrelated members of a supply chain to access insights derived from potentially expanded data sets.

An industry cloud can offer companies an exciting opportunity to exploit existing data they are not leveraging in a constructive way. For example, sharing customer data can enhance customer satisfaction and overall efficiency for all participants in the supply chain.

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Industry cloud platforms examples

In manufacturing, access to expanded data sets can help reduce downtime and increase safety as companies gain valuable insights by analyzing large amounts of data, including the Internet of Things, and mechanically collected data. For example, a company might discover that certain elements in construction often fail simultaneously. With this information, they can inspect related parts when one has failed to prevent expensive unplanned downtime and eventually increase the overall safety of operations. Similar tactics can be implemented in energy, healthcare, and other industries.

By joining an industry cloud platform, companies enjoy all the benefits of a regular cloud, including access to significant data storage, improved business agility, networking opportunities, and increased security.

Industry cloud questions to consider

No matter the platform sponsor or industry, there are issues that companies should consider before joining or developing an industry cloud.

  • Who needs the data? Who would benefit from it the most?
  • Is there a standardised format for the data, or must one be developed?
  • Who will lead format development?
  • Is the organisation sharing the data prepared to meet data quality standards?
  • If the data includes personal identifiable information (PII), what is its value without PII? How will PII be redacted?
  • How will the data be extracted, transformed, and loaded? How will ETL be performed?
  • Does regulatory compliance allow data sharing? If not, are regulations likely to change in the future?
  • Is there a constituency within the organization that wants to share data?

This last question is probably the most important, as it defines how smooth and stable the data sharing process will be.

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Infrastructure as Code

There are several other considerations that businesses should keep in mind when adopting a cloud. As it is driven by an application programming interface (API) that connects different pieces of software with each other rather than users, businesses that work with a cloud need to embrace an Infrastructure as Code (IaC) model and manage their infrastructure through code rather than manually.

Another thing to bear in mind is that not all processes in a cloud are standardised. For example, there are at least 17 different ways to deploy a container in AWS. Limiting container deployment to a single common method and establishing standardised but flexible deployment options would make it much easier for members of a cloud to use it. Hopefully, a standard procedure will be implemented in the future.

Industry cloud vendors

There are three types of organisations that can offer industry cloud platforms:

  • organisations at the top of a supply chain, or lead entities
  • independent software vendors (ISVs), especially those working in enterprise resource planning (ERP)
  • cloud vendors

Let’s take a closer look at each of these options.

Supply chain-driven industry clouds

The lead entity in the supply chain, a significant industry producer or distributor, can develop an industry cloud. This organisation will likely sponsor the project, paying for the initial industry cloud development while other supply chain members contribute as well. Commercial consumers of the future product can also participate in the project.

There are many advantages to the lead entity developing the cloud. First, since the project has been initiated by the industry leader, the brightest people in the field will likely be eager to participate. Also, as an “intrapreneurial” project within a well-established organisation, the industry cloud will be perceived as low risk and could be spun off from the lead entity into a well-funded startup.

However, there are downsides. The organisation building the industry cloud will always prioritise its own internal requirements before taking the concerns of external users into account. While they are likely to build a well-governed cloud, it may not meet the needs of the external audience.

Another potential risk is a change in leadership. If the executive spearheading the project leaves the company, cloud development may fall by the wayside.

In addition, the business may discover that the tools they use in the company are not suited to a cloud or too expensive for partners to afford. There might also be problems with adaptation. Even if employees at the lead organisation are familiar with the industry cloud, employees in other companies might require additional training. Another challenge is documenting data in a way that makes sense to everyone involved.

On the bright side, even if the project fails as an industry cloud, the organisation will still have a highly flexible, well-governed cloud that will help their business for years ahead.

ISV-driven industry clouds

Independent software vendors are like supply chain-driven entities in several ways. Many of them, particularly enterprise resource planning (ERP) vendors, have already been focusing on specific industries to sell their product. Developing an industry cloud offers the opportunity for them to create a marketplace for their own products or services in a more modular fashion.

Unlike many supply chain leaders, ISVs are already familiar with facilitating data storage in specific formats. The question is whether they’ll store the data in the least expensive repository available, which is typically an object storage, or in a relational database or file system at a higher cost.

Questions raised regarding data quality are also applicable in this case. Will ISVs be responsible for enforcing data standards, or will this be left to participants?

Developing an industry cloud and sharing data with clients can be an interesting step forward for ISVs. However, doubts remain regarding their ability to manage participants and keep data standardised.

Cloud vendor driven industry clouds

Industry clouds developed by well-known cloud vendors such as AWS or Microsoft might offer fewer opportunities for innovation but will likely have the greatest reach.

Microsoft already offers a version of an industry cloud that combines a CRM with a portal and data storage solutions. They also provide standard storage patterns for some industries.

AWS has released Industrial Data Fabric, which provides a data storage repository based on a specific governance model. It leverages SiteWise, as well as a wide range of other data ingestion options, including those from ERP vendors, and provide opportunities for the consumer to extract data in several ways, including with ReST-based APIs and analytics tools. 

Currently, the major cloud vendors provide opportunities for leveraging the data internally, but sharing data with other companies can potentially be an issue, as can maintaining a standardised format and data quality.

Challenges for industry cloud

Joining an industry cloud can offer significant benefits for companies, but many may reflexively balk at the idea of sharing or selling data. Consequently, it’s important that a company has a supportive constituency when considering an industry cloud.

Each type of vendor has its own challenges in developing an industry cloud platform. For industry clouds driven by supply chain leaders, the most important requirement will be reexamining tools and methodologies to meet the needs of less sophisticated supply chain participants. Avoiding the temptation to abandon the industry cloud and retreat to a standard cloud for internal use is also a challenge.

Some ISVs are already cloud native. For those that are not, the greatest challenge is adopting a cloud approach.

For all cloud vendors, the biggest issue is to establish effective data governance and standardize data format across various industries and organisations. When choosing an industry cloud provider, it’s important to remember that although cloud vendors can be perceived as neutral arbiters, selling their services is their primary objective. It’s important to manage costs during the project and avoid upsell efforts.

David Christian is solutions architect, migration and modernisation at DataArt

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