Most companies have come to terms with the need to modernize their digital infrastructure. That doesn't mean they want to follow the same path as the earliest cloud adopters.
New arrivals to cloud computing increasingly want packaged solutions to their tech problems. Or at least that's what Microsoft is betting: The company introduced three new "industry cloud" services Wednesday, adding bespoke packages of Microsoft's infrastructure and enterprise software services for manufacturing, financial services and nonprofit organizations.
"This is something that we've heard directly from the customers that we serve as an organization, the need for their digital transformation partners to have deep industry and vertical expertise," said Alysa Taylor, corporate vice president for business applications and global industry at Microsoft. The three new packages join similar ones for retail and health care customers, introduced last year.
Sometimes it's hard to remember that the public cloud still represents a very small percentage of overall IT spending: Cloud services only made up 9.1% of the entire global information technology market in 2020, according to Gartner. Those that have yet to make the move are often motivated by the old adage that if it ain't broke, you shouldn't try to fix it.
At a certain point, however, that adage becomes an albatross as newcomers unrestrained by legacy IT systems are able to move more quickly than incumbents to capitalize on changes in demand for their products or services. Retailers learned that lesson very quickly in the early days of the pandemic, yet they still needed help: Most companies outside the tech industry find it really hard to recruit (and retain) the people who understand how to operate modern IT infrastructure at scale.
That's part of the motivation behind the industry-specific approach to the cloud, which is the natural extension of a tried-and-true product-development strategy in enterprise tech based around vertical markets like retail or manufacturing. Google Cloud introduced a similar approach last year as part of CEO Thomas Kurian's efforts to cater to traditional enterprise tech buyers, and niche cloud players like IBM have also tried to sell cookie-cutter packages of cloud services to customers that need to be coaxed onto the cloud.
"When you talk about digital transformation, it's an iterative process," Taylor said. "It's not one [where] you're going to rip and replace all your back-end systems."
In the new financial services package unveiled Wednesday, Microsoft customers will be able to draw on a new feature called Loan Manager, which promises to speed up the process of evaluating, clearing and closing a loan. The first industry cloud introduced last year — Microsoft Cloud for Healthcare — will be updated later this year with support for new languages and remote patient-monitoring services, according to the company.
Microsoft also plans to open the just-announced Microsoft Cloud for Retail to a public preview next month. Both Microsoft and Google have made retail customers a priority over the last year or so, not just because of the challenges that industry has faced from the pandemic but as a not-so-subtle reminder to the retail industry that AWS finances a pretty big retail company.
The moves are another sign of the maturation of cloud computing, which began as a skunkworks IT provider for developers who wanted to work on side projects without having to ask the CIO for computing resources. That pay-as-you-go model has for several years been transitioning to a more traditional multiyear contract process between cloud providers and their customers as companies buy cloud resources for their entire organization.
And while early cloud customers had a strong interest in mixing and matching individual cloud services to build infrastructure themselves, the companies eyeing cloud services in 2021 are looking for help putting together the basic building blocks needed to run a modern internet business, preferring to focus on building custom touches on top of the cloud industry's heavy lifting.
"If you just look at something like retail, how do you take all of the data that retail has at their disposal, and be able to aggregate that data in a common data framework, to be able to then surface it up to get proactive insights?" Taylor said. "That's very timely and costly for a retailer to build, and so they look to their technology providers to be able to assist while their core competency is serving their customers in a retail capacity."
Clarification: This story was updated Feb. 24, 2021, to clarify which customers would be able to use Loan Manager.
