The rise of industry-specific cloud platforms

Vertical cloud platforms address the customisation gap left by global hyperscalers, driving new growth for ICT and telco players.

Eduardo Fichmann · Factory Capital — Operating Partner10 May 2024Period: Q2 20246 min read

$30B↑

WiseTech Global Market Capitalization (May 2024)

$5B↑

TechnologyOne Market Capitalization (May 2024)

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Abstract

This report analyses the shift from generic cloud computing to industry-specific (vertical) cloud platforms. While hyperscalers like AWS and Azure dominate the horizontal market, they struggle to meet niche regulatory and workflow requirements. This gap has allowed ANZ-born firms like WiseTech ($30B market cap) and TechnologyOne ($5B market cap) to thrive. The analysis outlines strategic recommendations for telecom operators, data centre providers, and hyperscalers to capture value in this evolving ecosystem.

Key Takeaways

Industry-specific cloud platforms are replacing generic 'one-size-fits-all' solutions to meet niche regulatory and workflow needs.
WiseTech Global has become the ASX's most valuable software firm at $30B by dominating the logistics execution niche.
TechnologyOne has scaled its market cap 10x to $5B over 11 years by focusing on SaaS ERP for the public and education sectors.

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Frequently Asked Questions

Generic cloud solutions fail to meet niche regulatory and workflow requirements, creating a market gap for vertical specialists. ANZ-born firms have exploited this, with WiseTech Global reaching a $30B market capitalization by dominating logistics and TechnologyOne scaling its market cap 10x to $5B over 11 years.

Telcos can move beyond commodity data by using network APIs to provide optimized, high-performance connectivity for vertical cloud providers. This allows operators to regain relevance by integrating directly into the high-value workflows of specialized firms like the $1.5B SiteMinder.

Hyperscalers are pivoting to a marketplace model to host industry-specific applications natively within their ecosystems. This strategy aims to capture value from high-growth platforms like the $40B Canva while outsourcing the management of complex, industry-specific regulatory needs.

Data centre operators have a significant opening to host mid-size international industry cloud platforms within Australian metropolitan hubs. This localized hosting strategy is essential for specialized players like the $630M Infomedia that require proximity to end-users and specific regulatory compliance.

Abstract

Key Takeaways

Frequently Asked Questions

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