Niche markets and the evolution of the Cloud

The Evolution of Cloud

70% of the organizations are exploring or using the cloud service solutions  

The cloud business is expected to touch $118 billion this year

Cloud is dominated by three main kinds of services: Software-as-a-service (Saas), Platform-as-a-service (Paas) and Infrastructure-as-a-service (Iaas).

Moving from Horizontal to Vertical Cloud

Horizontal cloud architecture is a generic architecture which can be commonly used all types of businesses.

Vertical cloud architecture is designed to meet specific requirements of particular types of businesses.

A need for industry specific or vertical services especially in niche sectors  is leading to smaller players making waves in the cloud market.

“The cloud is evolving to make space for smaller players who can build, run and integrate their products and services to meet industry specific requirements”.Scott Swartz, Founder, MetraTech

What do Experts Say?

Advantages of Vertical Cloud

More Value

Lower CAS

Larger Market Share

Layers of Value

Additional Revenue

More ValueThere is a growing need for value-added IaaS that can cater to a specific domain of expertise since their area of focus is drastically brought down and they are able to pack in more value that is also industry specific

Lower CASWith a specific targeted audience, your potential targets are reduced significantly and you are able to reach your customers faster bringing down your Customer Acquisition Costs (CAS).

With a vertical level, the penetration is far greater and depending upon the player and the industry, one can achieve up to 40% of the market share within five years.

Larger Market Share

Additional RevenueThere is a huge potential to earn additional revenue through newer models like referrals-as-a-service (Raas) by identifying potential targets, referring products or services to them and earning a commission when the potential gets converted to sales.

Vertical cloud architecture helps a company to add further value to its packages by layering it with functional solutions.

Layers of Value

For example: Guidewire adds further value to its package of underwriting, billing and claims, policy management etc. by layering it with functional solutions of business intelligence, data management, and mobile solutions.

Risks associated with Vertical Cloud

Higher price of installation

Being swallowed by bigger fish

Security issues and risks of lock-in

The final verdict

No innovation is risk-free or without significant hurdles and therefore the challenges posed by vertical cloud solution comes as no surprise.

It’s a noteworthy turn in the journey of the cloud market as businesses are beginning to discover the benefits of customized services as opposed to the generic, all-encompassing ones.

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For any queries on Cloud Computing

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