The market for industry cloud solutions is in good stead with that growth showing little signs of slowing.
According to the International Data Corporation (IDC), five large industry groups (healthcare, public sector, finance, retail/wholesale, and manufacturing) are expected to amass a total of US$37.5 billion on industry cloud solutions in 2018.
This year manufacturing experienced the strongest growth, followed by retail/wholesale.
Next year the growth rate is expected to undergo a small increase relative to 2018, with the overall market forecast to reach $45.4 billion.
Three of the five aforementioned groups are to grow above the market average of 21.5 percent, with just healthcare and public sector spending below the average – however, 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,” says IDC senior vice president & chief analyst Frank Gens.
“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.”
Geographically, the market this year has been dominated by the United States with the region making up for almost three quarters of the overall market. However, most of the other regions have undergone stronger than average market growth with Japan and China expected to grow the most year-over-year at 54 percent and 47 percent respectively.
IDC also expects these countries to grow at an even higher annual rate in 2019.
"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,” says IDC Cloud, SaaS, and Industry Cloud senior research analyst Zachary Rabel.
Relative to 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.
In terms of the vendor estimates for 1H 2018, SAP has maintained its spot on top of the finance industry cloud market, with the next seven vendors in the market expected to capture more than $100 million in revenues over the same period.
IDC tracks more than 140 industry cloud vendors in the healthcare provider site but asserts athenaHealth and NTT DATA are consistently claiming the top two spots.
Similarly, in the manufacturing industry cloud market Veeva Systems and Medidata are constantly vying for the first two positions while Lockheed Martin and Northrop Grumman compete at the top of the public sector market. In the retail/wholesale industry cloud market, NCR holds the top spot followed by Shopify.
“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,” says Rabel.
“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."