Cloud Services Move from Horizontal to Vertical

BrandPost By Paul Korzeniowski
May 12, 20153 mins
Cloud Computing

The first wave of cloud solutions supported general-purpose services such as storage, email, and office productivity. These services have become quite popular: 69% of organizations have moved at least one application or infrastructure component to the cloud, according to IDG Enterprise’s 2014 Cloud Computing Study. As businesses have had success with cloud, the desire to do more has grown – as has the need for industry-specific cloud solutions.  

Interest in vertical-market solutions is on the rise for many reasons. Technology has become the primary way of conducting business in many industries, and as digital communication increases among business partners, companies need standard interfaces to move data more efficiently.

For instance in 2009, the United States Department of Health and Human Services passed the Health Information Technology for Economic and Clinical Health Act, whose goal is to create a nationwide network of electronic health records. The legislation includes rules about how healthcare providers label items, like Radiology Information Systems (RIS), Picture Archiving and Communication Systems (PACS), speech recognition software, electrocardiogram systems, and Remote Patient Monitoring (RPM) devices.

One of the best-known healthcare regulations is HIPAA (Health Insurance Portability and Accountability Act), which has been in place since 1996 to safeguard patient information. Protected health information (PHI) is 50 times more valuable on the black market than other personally identifiable information (PII), according to a Bitglass survey.  One HIPAA regulation deals with security awareness and training and requires that healthcare IT systems include security checks such as anti-virus software, tools that monitor login attempts, and a password management system.

Vertical cloud solutions are emerging to deal with this rising tide of regulations. Market research firm Frost & Sullivan expects the United States Healthcare Cloud Market to grow from $903 million in 2013 to $3.5 billion in 2020.

Like healthcare, the financial services industry is using cloud technology to ensure industry compliance.  For instance, EDGAR (Electronic Data Gathering, Analysis, and Retrieval) systems automate collection, validation, indexing, and forwarding, and acceptance of quarterly and yearly reports submitted to the United States Security and Exchange Commission. In addition, the Payment Card Industry Data Security Standard (PCI DSS) is a set of standards designed to ensure that financial services firms protect customer payment information. The ability to help financial services companies meet these standards is one reason why TechNavio forecasts that the global private and public cloud financial services market will grow at a rate of 25% from 2013 to 2018.

Similar scenarios are emerging in government, education, and manufacturing.

Vertical cloud solutions are being delivered in two ways. Microsoft, for example, has enhanced its cloud services to support HIPAA and other industry specific regulations. In addition, third parties are adding industry-specific features to general-purpose cloud systems and then packaging them for specific markets.

Are you ready for the verticalization of the cloud?