I know whenever I see announcements from the hyperscalers, they have a lot around industry cloud, which, maybe a few years back, was not a thing. So, there is definitely a lot of focus in terms of the offerings around specific industries. Let's dive into that one. Go ahead and explain why industry specialization is such a key trend coming up.
I think of industry cloud as a skeleton, which has to be… you have to breathe life into that skeleton. And I would say there are more viewpoints in the market than just what the three hyperscalers are talking about. I expect industry clouds to start with the word “industry” before it starts with the word “cloud,” because to look at industry clouds in another perspective would be to look at end-to-end stacks or end-to-end platforms as a service – all of which start with industry processes first. If you go down that path, this is much more than just “cloud.” And I'm using air quotes “cloud,” because it could be cloud, it could be AI, it could be assets, it could be edge, it could be AI on devices, it could be smart devices. It could be hyper connectivity.
All of this comes together in a word that I prefer, and that is purpose-built. If it's purpose-built for an industry or its purpose-built for one process in an industry, you've got the first step towards industry cloud. We will definitely have hyperscaler ambitions on industry cloud, but every single hyperscaler ambition can also be seen as a threat by one of our clients. We are expecting niche players to actually step up and stand up and start saying, “well, this is what industry cloud looks like in terms of utilities, in terms of oil and gas, in terms of energy, in terms of rail.”
But is connected car an example of automotive connected industry cloud?
Let's take an automotive example. I would say battery as a service. Battery as a service could be a platform as a service offering. Now to do battery as a service, you would, of course, have to have batteries. But those batteries would have to be connected. And if you have connected batteries, you have an entire control tower managing these batteries.
Now, each battery has three life stages. The first, of course, is in the car. The second is outside the car after its first fit and the third could be in a battery farm. Now, how do you manage that end-to-end – this could be battery as a service. Now, how much of this has nothing to do with the battery, rather it has to do with the platform on which all these services are running.
There you go. You have an industry cloud for battery as a service.
So, you see what we just did?
We looked at automotive, we took a sliver of it and said, there's the industry cloud for it. I think that's a good example of how I think things are going to be much more purpose-built as we go forward. It's much easier to talk about which cloud to do this on instead of saying which industry cloud. Ask: What's the right mix of cloud plus assets plus edge plus AI to make this happen?
And Prashant how do you – like we talked about hyperscalers that's an obvious one – but I'm seeing industry cloud focus from ERP vendors, from CRM vendors. All the big global systems integrators have a focus on this.
What are the changes in how a Fortune 500 company would orchestrate their ecosystem of partners as they delve into this area of industry cloud?
You raised a good point of ecosystems. We are seeing more of more and more of that happen as data becomes something that you can monetize. So, let's take an example in the health care sector. We're seeing health care providers, payers and provider platforms starting to come together in such a way that you don't know where one stops and the other starts. The processes of each company are getting enmeshed with the other to the point that the boundaries on which the revenues are being made are also changing. They are fleeting.
When this happens, you don't know whether you are on the revenue side of this or on the cost side of this or on the platform side of this conversation. Imagine this ecosystem play happening in health care. It's also happening in, I would say, retail, CPG and third-party logistics, as a third ecosystem. A fourth ecosystem would be around energy, energy infrastructure. And you start seeing these broad ecosystems formed.
Companies are stopping to think, not only about themselves but saying, “okay, what's my role in the ecosystem?” The minute their role in the ecosystem changes their platform, players start emerging. The minute platform players start emerging, and they are in the industry ecosystem, now imagine who should really play a role in industry cloud. Should it be a system integrator or hyperscaler or should it be some of these Fortune 500 companies themselves? That's the answer we need to look for in the next six quarters.
Maybe along those lines, to close this section out: What is your advice for any organization that's been dabbling with industry cloud? They know it's something that's coming. Maybe they’ve got a couple of, you know, tiny wins, but they see this wave coming and they want to harness it. What are the steps they should take as we move into the calendar year so that they can help maintain a competitive advantage by taking advantage of industry cloud?
I think if there's one motto, we should do this all under as a collective, the motto is: profit from the core. If you go back to think:
What is the core of what you do?
How do you profit from that core in terms of data?
How does data actually create a business outcome for your client?
And how do you actually monetize that?
We can’t just say “via AI and insights,” rather we must start saying and doing applied AI and insights; keep putting the business outcome first instead of saying technology first. Instead of saying cloud first, mobile first, AI first. Instead ask: What's the business outcome first – the outcome that I know I can do because I know how to profit from my core? That's the first step towards industry cloud, because you as a firm will be the only ones who can realize this end-to-end stack.
You start seeing some of this happening, for example, in what Johnson Controls does with their Open Blue platform, it's building automation. That is a good example of industry cloud.
Okay, I'm sold. Let's go to topic number two.