Microsoft Faces Off with Google, SAP, Oracle in Industry Cloud Blitz

In a huge expansion of its industry-cloud portfolio, Microsoft is preparing to compete directly against partners SAP and Oracle as well as rival Google in what could be the hottest cloud segment of 2021: industry-specific solutions.

(In my weekly Cloud Wars Top 10 rankings, Microsoft is #1, Google Cloud is #3, SAP is #5, and Oracle is #6.)

While Microsoft has been fairly low-key about its first three industry clouds—government, retail and healthcare—CEO Satya Nadella himself showcased the expansion of those vertical-industry efforts with a YouTube video outlining the expansion into manufacturing, financial services and nonprofits.

I believe this surge into vertical-industry solutions from each of these powerful and innovative organizations—Microsoft, Google Cloud, SAP and Oracle—represents a much-needed renaissance—perhaps even a reformation?—in an enterprise software industry that can at times seem unable to sever its ties to the past.

While the world went digital and organizations flattened and business networks multiplied and become more complex, and as consumers moved to the center of the business universe and “employee experience” massively disrupted the entire HCM world, the enterprise-apps vendors chugged along, endlessly refining the tools created for the last decade: ERP, HCM, CRM. 

Now, there’s surely great value in those applications and will be for many years to come—but they represented a world gone by, and the lack of a next-gen approach to business processes was becoming a vacuum that not only nature but also customers were starting to abhor.

But all that has changed rapidly and dramatically in just the past few months as I described last month in  SAP, Google, Oracle Battle over Industry-Specific Solutions: 5 Predictions. The move toward vertical applications is one I focused on intently in 2020—here’s a sample of our major analyses:

• Oracle Vs. SAP: Who Will Lead Hot New Market for Industry-Specific Solutions?
• Look Out, Google and SAP: Microsoft Jumping into Red-Hot Industry Solutions
• #1 Microsoft and #4 Google Are Facing a Wicked Cloud Challenge
• Google Launches New Era in Cloud with AI-Powered Industry Solutions
• Google and SAP Fusing Cloud and AI in Next-Gen Apps for Industries
• SAP’s Secret Weapon: Month-Old Industry Cloud Already ‘Growth Driver’
• Hey Microsoft: Google Cloud Is Pushing You Out as SAP’s #1 Cloud Partner
• SAP Will Battle Microsoft & Google for Customer Control, Says CEO Christian Klein
• Google Cloud Helps Drive Triple-Digit Online Growth at Lowe’s
• Microsoft Top 10 Customers for Digital Transformation: the Satya Nadella Touch

And now with Microsoft jumping into the industry-specific battle pointedly and aggressively, the entire industry seems about to unleash a wave of high-impact and high-value solutions aligned to the fast-emerging digital processes and business models remaking every industry.

On top of the major moves from Microsoft, SAP, Google and Oracle, Salesforce has set up some industry clouds, ServiceNow has been raising its focus on industry-specific solutions and even IBM is leveraging its extensive and long-tenured industry expertise with some vertical-market clouds.

So huge benefits are in the offing for business customers. The three in particular that Nadella focused on from Microsoft’s industry clouds are:

• accelerating time to value;
• increasing agility; and
• lowering costs.

Here’s how Nadella outlined in the YouTube video Microsoft’s overall approach to its newly expanded industry-cloud business, along with 3 customer examples.

“Over the past year, we’ve worked closely with leaders in every industry to help them navigate the crisis, equipping them with technology and tools to accelerate their transformation. Our deep commitment to industry is not new, but it’s taken on a new urgency and we’re committed to helping every organization use technology to improve time to value, increase agility, and reduce cost,” said Nadella.

“Novartis is using AI to make it easier and cheaper to discover, develop and deliver new medicines. It typically takes 10 years and more than $2 billion to develop and bring to market a new prescription drug. Now Novartis is empowering its associates with AI tools at each step of the drug-development process so they can uncover the insights hidden in the vast amounts of data in a quest to improve their time to value,” Nadella said. This quest by Novartis is one of my favorite stories from 2020, and you can read about their fascinating exploration into the future in Medical Moonshot: How Novartis and Microsoft Are Using AI to Reimagine Medicine.

“In financial services,” Nadella continued, “BlackRock is migrating Alladin, their portfolio-management platform, to the cloud to accelerate innovation and enhance the experience for its broad and diverse client base. During the early days of the pandemic, the number of transactions on Alladin increased by an order of magnitude as customers rebalanced and derisked their portfolios. And using the cloud, BlackRock was able to quickly scale in a highly controlled and transparent way, increasing its agility.

“And in manufacturing, Johnson Controls is using digital twins to transform how buildings and spaces are designed, built and managed. For example, digital twins enable building managers to support COVID-19 safety protocols including maximum-occupancy guidelines, and they’re able to better monitor and optimize systems and ultimately reduce costs.”

Final thought

Next week, I’ll be digging more deeply into this exciting move by Microsoft. And hey, who knows—maybe I’ll even start a new newsletter next month focused on these industry-specific solutions…

At the time of this writing, Oracle, Google Cloud and SAP were clients of Cloud Wars Media LLC and/or Evans Strategic Communications LLC.

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