How the industry cloud computing market is gaining new momentum
As more CIOs and CTOs embrace hybrid IT infrastructure models, incorporating multi-cloud solutions, another key trend is gaining momentum. According to the latest worldwide market study by International Data Corporation (IDC), five large industry groups are expected to spend a total of $37.5 billion on industry cloud solutions in 2018.
The five industry groups are healthcare, public sector, finance, retail and wholesale, plus the manufacturing sector. Among them, manufacturing grew the most, while retail and wholesale were next to increase their investment.
Industry cloud market development
The overall market is expected to reach $45.4 billion in 2019 with three of the five groups growing above the market average of 21.5 percent. Healthcare provider and public sector spending are both forecast to grow below the market average, although their 2019 growth rates will be higher than those for 2018.
"IDC's latest forecast shows that industry cloud growth rates will continue to accelerate over the next three years, which is very unusual for multi-billion-dollar markets," said Frank Gens, senior vice president & chief analyst at IDC. "This growth is being driven by rapidly-digitising industries like healthcare, financial services, and manufacturing, where industry clouds are becoming the cornerstones for next-generation growth and innovation strategies."
From a geographic perspective, the United States market will make up close to three-quarters of the overall market in 2018. Most of the other regions will enjoy stronger than average market growth with Japan and China expected to grow the most year over year at 54 percent and 47 percent respectively.
These two countries are also forecast to grow at an even higher annual rate in 2019. The other regions, such as U.S., Latin America, and the Middle East & Africa, will also outperform their 2018 growth rates.
The healthcare provider market in the U.S. is expected to pass the $10 billion mark in 2018 for the first time while the Western Europe market for healthcare industry cloud is also forecast to hit a landmark in 2018 by crossing the $1 billion mark.
Relative to all other regions, Japan can be considered a late adopter to industry cloud deployment. Having said that, the region will fast track to pass the $1 billion mark by 2022. Meanwhile, China is expected to reach that landmark two years earlier.
Outlook for industry cloud application growth
According to the IDC assessment, the industry cloud market continues to accelerate as cloud users demand both vertically-specific capabilities in their solutions and industry expertise from their cloud service providers.
To capture this growth, cloud vendors have increasingly shifted their horizontal capabilities to form industry cloud solutions, while industry clouds themselves have created consortiums of collaboration to drive industry innovation.
Healthcare has led industries towards this trend, but the finance, manufacturing, and retail industries have internalised the successes and failures from horizontal platforms to form their own paths.
IDC believes the industry cloud market is among the largest vertical growth opportunities for both technology vendors and professional services firms through 2025.
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