Industry cloud spending across four major industry groups (finance, manufacturing, healthcare and the public sector) will total $22.5 billion globally in 2018, according to a study from International Data Corporation. Of the four industry groups, healthcare providers will account for 48% of total spending on industry cloud.

The finance industry and the public sector will spend $4.5 billion and $4.3 billion, respectively, while the manufacturing industry is estimated to spend close to $3 billion on industry cloud deployment in 2018.

Looking at 2019, IDC forecasts that the four combined industries will increase spending by 24.3%, a rate similar to 2018. Both the finance industry and the public sector are expected to grow below average at 23.4% and 19.4%, respectively, while the healthcare and manufacturing industries will increase their spending on industry cloud solutions by 26.1%.

“More and more leaders within major industries are using the same cloud services delivery models as companies like Amazon, Google, Facebook and others to deliver new and innovative digital services to their customers,” said Frank Gens, senior vice president and chief analyst at IDC. “IDC’s latest Industry Cloud Tracker data shows that this new type of digital services revenue stream is already reaching significant scale in four of the biggest industries on the planet, growing at roughly four times the growth of the S&P 500’s overall revenue growth. As strategic crossroads for digital innovation in each industry, industry clouds will drive even greater growth and industry transformation over the next five years.”

According to IDC’s vendor estimates, SAP was found to be the top industry cloud player in 2017 among the 50 vendors tracked in the finance industry while Veeva Systems came out first among the 40 vendors covered in the manufacturing industry cloud market. Lockheed Martin earned top billing with $1.4 billion in revenues in the public sector industry cloud market. The only other vendor with more than $1 billion in industry cloud business in 2017 was athenaHealth, which took in $1.2 billion in revenue.

For 2018, the U.S. will be the only region spending more than $1 billion on industry cloud for each of the four industries covered in the tracker. By 2019, Western Europe will join for the first time as an annual $1 billion region for industry cloud in the finance market. China is forecast to cross the $500 million mark for all four industries combined in 2019. There, the finance industry will account for half the overall market while the strongest growth will be exhibited by the manufacturing industry.
“As it continues to develop, the industry cloud market is expected to sustain its double-digit growth for the next five to 10 years,” said Zachary Rabel, senior research analyst, Cloud, SaaS and Industry Cloud research at IDC. “Industry clouds continue to arise every year, digitally transforming industries, encouraging industry collaboration, and driving industry innovation, while, to meet market needs, software vendors shift to portfolio verticalization, designing industry-tailored solutions. From a vertical perspective, healthcare leads the way, but manufacturing, healthcare and the public sector each represent expanding markets. Due to the market’s acceleration, IDC believes the industry cloud market is among the largest vertical growth opportunities for both technology vendors and professional services firms through 2025.”