Digital transformation is becoming more interconnected with the potential of the cloud day by day. According to Eurostat data, 41% of enterprises in the EU region employed cloud technologies in 2022; of these, 73% leveraged them to support critical services.
Whilst these numbers give an idea of the scope and potential uses of these technologies, it is also clear that the migration to the cloud is far from over. In the near future, the number of companies taking advantage of these technologies is expected to grow further.
One of Gartner’s Top Strategic Technology Trends for 2023 concerns Industry Cloud Platforms (ICPs). According to Gartner, “By 2027, more than 50% of enterprises will use industry cloud platforms to accelerate their business initiatives”.
In this article, we will discuss what Industry Cloud Platforms are, the benefits they provide, the key features, and the challenges to be aware of with ICPs.
What is an Industry Cloud Platform
According to Gartner, Industry Cloud Platforms combine SaaS, PaaS and IaaS with specific functionality for vertical industry use cases. IT leaders can use the offered modularity and composability of these platforms to gain the agility their industries need to respond to continuous disruption
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Industry Cloud Platforms are part of the growing trend that is Platform Engineering, i.e., the discipline of building and maintaining Internal Developer Platforms (IDPs). As explained later in this article, Industry Cloud Platforms can be considered platforms in a broader sense, which offer an IDP within them as the main component for developing specific services and functionalities.
Why an Industry Cloud Platform is needed
Solving industry-specific problems quickly and easily is one of the keys to gaining an advantage over competitors. Industry Cloud Platforms primarily meet this purpose, offering solutions tailored to the relevant industry that can be quickly integrated due to the modularity and composability of the platform.
For example, a bank’s management of a customer record must meet strict criteria for compliance with specific regulations in the area of handling sensitive personal data. The same can be said of a hospital or healthcare business, which will have to comply with other, even more stringent regulations. A company’s customer records in the retail or mobility industry, on the other hand, will be easier to manage because they will process less data.
From this simple example, is evident the importance of a platform that natively provides services in compliance with industry standards and regulations, thus avoiding the need for time-consuming and costly compliance work.
Advantages of an Industry Cloud Platform
An Industry Cloud Platform provides several benefits. The most obvious one has already been mentioned above, and that is the ability to provide industry-specific cloud services. In addition to this, ICPs also provide other benefits, mostly related to their modularity and composability features:
- Holistic approach: due to the ease of integrating new modules, the platform allows the incorporation of all cloud services that are usually purchased separately;
- Reuse: internally developed modules can be made available to other teams, such as through a Service Catalog, and reused in different sections of the product or in other products;
- Agility: because they are independent of each other, modules can be added, updated, or removed with little to no impact on the rest of the architecture, ensuring a high speed of response to changes.
All these benefits also translate into lower costs, both in terms of developing new features and maintaining the produced software.
Features of an Industry Cloud Platform
Having reviewed what they are and their benefits, we now outline what are the key features to be provided by Industry Cloud Platforms. We differentiate between architectural features and additional capabilities.
The architectural features that an ICP must possess are:
- Cloud-native: since it provides and collects cloud services, the platform architecture must also be cloud-native in order to be resilient and scale automatically and easily.
- Composable: the architecture of the platform must be geared toward making it easy and quick to add new components; in most cases, a Composable Architecture is based on microservices.
- Modular: the modules that make up the architecture (also called Packaged Business Capabilities or PBCs) should be sufficiently decoupled to be added, replaced, or removed with a minor possible impact on others.
- Sustainable: both the platform itself and the cloud solutions it offers should meet sustainability criteria and include tools for monitoring and optimizing resource consumption.
The main additional capabilities that make an ICP complete are:
- Data Fabric: to collect data from the various components and be able to aggregate it according to business needs, exploiting it in near-real time.
- Marketplace (or Service Catalog): to make available PBCs, both those developed in-house and those purchased from third parties.
It is important to emphasize that the Marketplace should mainly provide the PBCs of the relevant industry, but may also provide a variety of PBCs. A well-structured Marketplace should also offer service components, such as a CRUD Service or a backoffice service, but also PBCs that can be used in different domains. Innovations from one industry can thus be leveraged by other sectors, creating products and services of increasingly higher quality.
A successful example of this synergy between different industries is the Payment Integration Hub developed by Mia-FinTech. It is an end-to-end digital payments management solution that leverages the latest innovations and technologies from the fintech industry and makes them easily integrated and accessible to all organizations through Mia-Platform Marketplace. Thanks to this solution, companies operating in other industries, such as Retail and Mobility but also many others, can also take advantage of a highly innovative tool from the fintech sector, thus gaining a competitive advantage in their respective fields.
Challenges of an Industry Cloud Platform
Industry Cloud Platforms provide several benefits and can ensure a significant competitive advantage, but they also pose some challenges and risks that should not be underestimated.
First, the focus on the target industry should not become a limitation. ICPs make industry knowledge their strength, but there is a risk that this specialization comes at the expense of components that are less related to the core business but no less important. For example, a retail company can create a real-time inventory management system, but its effectiveness is lost if only one person in the entire company can view it because of permission management done with outdated or substandard tools.
In addition, by choosing an off-the-shelf platform that is also used by other players in the industry there is a risk that the competitive advantage that ICP can provide will be lost, as everyone will have the same tool at their disposal. On the other hand, building a platform from scratch in-house is time-consuming and expensive, and requires a lot of time and resources before it is able to deliver the benefits for which it is being built.
Between building from scratch and buying a finished product there is a third alternative, which is to rely on a Platform Builder such as Mia-Platform. With Mia-Platform you can create your platform according to your needs and business logic, without having to build it from scratch. You will also be able to take advantage of its composability features and have access to Mia-Platform Marketplace, a service catalog that provides components specific to your target industry, as well as many other cross-industry PBCs.
Conclusion
Companies in a given industry share some specific needs, which stem from the nature of the business. Having tools that offer solutions tailored to these needs can be a significant competitive advantage, which is why Industry Cloud Platforms are becoming increasingly popular.
Both buying a pre-packaged product and creating it from scratch have disadvantages that are likely to detract from the benefits provided by an Industry Cloud Platform. Mia-Platform is a Platform Builder that combines the speed of an out-of-the-box product and the customizability of one built in-house. Mia-Platform in fact enables and supports the creation of your platform according to a composable approach: this will ensure speed of release, as well as ease of maintenance and evolution of the platform itself.
This modular and composable approach also enables the transition to a Platform Company. Download the white paper to discover all the features and benefits!
