PUBLISHED DATE: 2025-08-13 10:49:43

HFS HORIZONS REPORT: Industry Cloud Service Providers, 2024

An assessment of Industry Cloud service providers, addressing the why, what, how, and so what

Authors:

Excerpt for Publicis Sapient

Only a third of enterprises are realizing their cloud ambitions. Their biggest challenge is aligning technology and business objectives. They need more help understanding the cloud target operating model to progress on their transformation journey. Retrofitting innovations such as cloud into traditional operating models is a recipe for failure.

Discussions on Industry Cloud should focus on value creation and different engagement models to finally move the needle on the transformation journey. The focus should not be on capabilities and just customizing horizontal cloud technologies. For that, we don’t need new nomenclature—just call these industry solutions.

Contents

  1. Introduction and the HFS value chain
  2. Research methodology
  3. Market dynamics
  4. Horizons results: Industry Cloud service providers, 2024
  5. Publicis Sapient profile: Industry Cloud service providers, 2024
  6. HFS Research authors

1. Introduction and the HFS Value Chain

The discussions around the cloud are full of contradictions and unanswered questions. For HFS, the context of those discussions should be cloud-native transformation and organizations’ inability to achieve the priorities of their transformation journeys. Yet, more technology won’t move the transformational needle. Moving the needle requires aligning technology and business objectives and the ability to drive cultural change.

Industry Cloud is a mature proposition. However, we need to reframe the discussions to help clients on their transformation journeys. Therefore, the HFS Industry Cloud Horizon, 2024 focused on the value levers of value chain disruption, new business models, and an ecosystem mindset.

We are not seeking to assess the details of offerings for specific industries. Instead, we want to learn what must be done to accelerate transformational journeys. What is the overarching point of view of providers on Industry Cloud? How can they support organizations in achieving the value levers described? By the same token, what can we learn from compelling outcomes that have been delivered?

The report examines the capabilities of 20 service providers offering differentiated approaches to meeting their clients’ transformation needs. This research will assess how well service providers are helping their clients envision and deliver transformation outcomes.

Inclusion criteria: We invited diversified providers of IT services. Participation guidelines include annual Industry Cloud revenue of at least $250 million. For specialized providers, we may make decisions based on the relevance of their Industry Cloud ecosystems in line with the scope of this study rather than a revenue threshold.

We assessed and rated the transformation capabilities of these service providers across a defined series of value propositions, innovation capabilities, go-to-market strategies, and market impact.

This report also includes detailed profiles of each service provider, outlining their placement, provider facts, and strengths and opportunities.

The report is global in scope and offers critical insights for enterprises, service providers, and ecosystem partners.

Executive Summary

  1. The Leaders
    We assessed 20 service providers across value propositions, innovation capabilities, go-to-market strategies, and market impact criteria. In alphabetical order, the leaders in Horizon 3 are Accenture, Cognizant, HCLTech, IBM, Infosys, Publicis Sapient, and TCS. The shared characteristics of these leaders include linking Industry Cloud (IC) to the challenges of cloud-native transformation (CNT) and compellingly articulating the context and the strategic option for IC. The wheat separates from the chaff when providers deliver an advisory-led approach to IC outlining the cloud-native foundations that must be in place while proactively investing in expansive functional platforms that provide a utility for regulatory requirements and enable capturing business value by integrating capabilities that are focused on the industry value chain and not just on organizational value chains.
  2. Reframing the Industry Cloud Discussion
    While supposedly one of the top priorities for enterprise leaders, the IC terminology is not well defined: The moniker Industry Cloud lacks a clear definition and strategic intent. Most stakeholders use the term loosely to describe technology capabilities customized to solve a specific industry challenge. HFS argues that using the moniker should denote a different engagement or business model from predominantly horizontal propositions. The reality is that there is a continuum of capabilities ranging from solutions and IP to functional platforms to industry ecosystems. In our view, the point here is not about semantic nuances but outcomes tied to organizational or industry value chains. Moving forward, we urgently need to reframe those discussions to ensure relevance for buyers.
  3. Target Operating Model Must Move Center Stage
    Most providers understand IC as an expansive set of industry-specific solutions, at times aggregated to an industry platform. What is often forgotten is that transformation is about designing new operating models. Thus, IC should be about preconfiguring an industry-specific operating model to disrupt the industry value chain and help clients progress toward an ecosystem mindset. IBM stands out by offering a utility model for regulatory requirements. Cognizant stands out by enabling collaboration across the life sciences value chain. Publicis Sapient and Tech Mahindra do an excellent job of articulating an advisory approach to aligning Industry Cloud to the fundamentals of cloud-native transformation (CNT).
  4. Focus on the Industry Value Chain
    The fundamental difference between IC and CNT is that IC must be focused on the industry value chain and not just on organizational boundaries. Most providers fall short here, aggravated by a shortage of client journeys. Most client stories shared with us were about generic cloud transformation but not focused on IC. If we don’t focus on the industry value chain we shouldn’t talk about Industry Cloud but only about industry solutions.
  5. While Transformative, GenAI is Not Changing the Fundamentals of Industry Cloud
    We have heard a lot about the infusion of IC offerings with GenAI but very little about how GenAI is changing the fundamentals of CNT and IC. This indicates the nascent adoption across the broader industry and is not simply a reflection of the state of IC. IBM stood out by discussing GenAI risks and how clients should think about the control stack. Publicis Sapient articulated, with nuance, how GenAI might impact CNT. This is another facet of our take that we need to reframe the discussions on IC. But it is about the outcomes, not capabilities.

The HFS Industry Cloud Value Chain 2024

Industry Cloud is the Horizon 3 evolution of organizations’ transformation journey. It must be distinct from technology transformation while it is overlapping with Horizon 2 (cloud-native transformation) and it is offering a different approach to help capture business value from transformation. The difference between Horizon 2 and 3 is that Industry Cloud must be focused on the industry value chain, ultimately having the ambition to disrupt those value chains and provide new streams of revenue. Industry Cloud is characterized by five value levers:

  1. Value creation
  2. New business models
  3. Vertical integration
  4. Industry value chain disruption
  5. Ecosystem mindset

If Industry Cloud becomes confined to efficiency gains and industry-specific customization, then just call it industry solutions.

The HFS Industry Cloud value chain includes the following stages:

The HFS Industry Cloud value chain was developed to graphically depict our understanding of the ecosystem as well as of transformative services. The key strategic levers for the broader Industry Cloud ecosystem include:

The study seeks to address multiple questions:

2. Research Methodology

20 service providers covered in this report:

Sources of data:

Horizons Assessment Methodology – Industry Cloud

The “HFS Horizons – Industry Cloud” research evaluates the capabilities of service providers across a range of dimensions to understand the Why, What, How, and So What of their Industry Cloud offerings. Our assessment is based on inputs from clients, partners, and employees and augmented with analyst perspectives. The following illustrates how we assess capabilities:

Assessment Dimensions:

Each dimension is further broken down by subdimensions and mapped to three horizons:

3. Market Dynamics

Industry Cloud terminology is not well defined. The moniker Industry Cloud lacks a clear definition and strategic intent. Most stakeholders use the term loosely to describe technology capabilities customized to solve a specific industry challenge. HFS argues that utilizing the moniker should denote a different engagement or business model from predominantly horizontal propositions. The reality is that there is a continuum of capabilities ranging from solutions and IP to functional platforms to industry ecosystems. The point is not about semantic nuances but about outcomes tied to either organizational or industry value chains.

Strategic alignment to cloud-native transformation discussions is essential. The discussions about IC are intrinsically aligned to cloud-native transformation. Therefore, we need clarity about the business objectives and the “why” for this transformation.

Adoption is contingent on maturity and regulation. Embracing IC is strongly aligned with two vectors: first, the maturity of becoming cloud-native, and second, the level of regulation. Consequently, financial services and healthcare/life sciences show the highest adoption of IC. At the same time, those two vectors are pointing at two diverging goals: value creation vs. industry utility.

Most activity is focused on industry solutions in Horizon 1. Ecosystem engagements and platforms that look at the industry value chain are few and far between. Most providers are concentrating on a plethora of composable, industry-specific IP without a clear point of view on value creation or moving the needle for cloud-native transformation.

Cloud must become a business discussion. Only a third of enterprises realize their cloud ambitions. Therefore, IC should be a strategic lever to move the transformation needle. The biggest challenge for organizations in capturing business value from cloud investments is the misalignment of technology and business objectives. As such, IC must be part of a business-centric discussion. Yet, many providers remain stuck in technology narratives.

The notion of a platform must be inherent in IC discussions. To move the transformation needle, the debate about IC should not be about capabilities and IP but about industry platforms. The discussions should focus on becoming production-ready and achieving time to value rather than just achieving customization of largely horizontal capabilities.

Digital-native and challenger organizations are the obvious targets. Organizations such as challenger banks are the obvious targets for embracing IC as a comprehensive engagement model, including operating models. Examples would be bank-out-of-the-box.

Diverging vectors of value creation and industry utility. To move beyond capabilities, we must focus on the “why” of IC and align it to CNT. The two primary vectors for this are value creation, such as faster time to value, and collaboration across the industry ecosystem to provide industry utilities, especially for regulatory and compliance issues in highly regulated industries.

Focal point—highly regulated industries. The utility proposition inherent in IC has the most robust traction in highly regulated industries such as banking and life sciences, where expectations for cost savings outweigh concerns about collaborating with competitors.

Target operating model should be the cornerstone. Just as with CNT, more clarity on the cloud target operating model should be the central part of the discussion on IC. However, providers need to up their game here. They often lead with technology rather than helping clients solve those essential issues.

Inflationary discussions about GenAI. Almost all providers have mandatory sections on GenAI in their pitch decks. While GenAI will compress the software development lifecycle, there was no other clear suggestion on how GenAI would impact IC. It is another reminder that we must pivot the IC discussions to outcomes and engagement models.

Ecosystem examples are few and far between. Industry ecosystems—or even ecosystems across different industries—are the North Star for embracing IC. IBM is the poster child with its Financial Services Cloud as it brings together fintechs and Bank of America, BNP Paribas, and MUFG as anchor clients to create the platform. Another compelling example is Cognizant’s Shared Investigator Platform in Life Sciences, which enables cross-industry collaboration on clinical trials.

Fostering communities is central to ecosystem mindset. Proactively bringing industry communities together is the foundation for developing an ecosystem mindset. This is about the willingness to invest and engage.

Disruption of industry value chains remains an ambition (or pipe dream). Given that organizations struggle to capture business value and achieve a tangible ROI from their cloud investments, it is perhaps not surprising that we didn’t come across ambitions to disrupt industry value chains.

Implementation and Back-Office Services Are the Priority

When asked what services are procured as Industry Cloud, the top responses were:

Other services such as personalized customer experiences, customized solutions, collaboration and communication, data integration and sharing, and governance models received lower prioritization.

A significant percentage of respondents prioritize workflow/process automation and regulatory compliance/security, highlighting the utility opportunity. The open question is how to balance utility and business value creation. There is a need for strategic guidance to evolve existing systems to leverage Industry Cloud solutions.

Business Transformation Is the Most Desired Outcome, but Very Little Is Achieved

When asked what outcomes organizations are trying to achieve with Industry Cloud, the top responses were:

Other outcomes such as industry customization, new business models, functional transformation, value-chain disruption, vertical integration, and supply-chain visibility were less frequently cited.

Most respondents suggest using Industry Cloud to fundamentally transform business operations, yet most provider relationships are focused on functional optimization. The priority of lower costs and higher agility also contradicts the emphasis on business transformation. The low priority of value chain disruption and vertical integration appears to point to a technology-centric understanding of Industry Cloud.

Context for Most Organizations Is Functional Optimization

When asked which statement best represents the primary value delivered by their service provider today and in two years, the responses were:

Currently, there is a huge demand for the ability to optimize specific functions within their industry, indicating a focus on improving particular aspects of their operations. Within the next two years, there is an expected pivot to balance functional optimization with achieving broader business outcomes and enhancing stakeholder experiences, indicating a move toward more comprehensive transformations.

77% of Organizations Claim to Be Able to Capture Business Value—Contrary to HFS Data

When asked if they are able to capture business value from their investments in cloud:

77% suggest they are able to capture business value. This sharply contradicts the findings of HFS Research. When we analyzed the broader context of cloud native transformation, only one-third indicated they were able to achieve their priorities with the cloud.

Cost Savings Are the Most Decisive Selection Criterion

When asked how they picked their service provider, the top three criteria were:

Cost savings potential is a significant consideration, which indicates that most IC discussions are not in the context of transformation but more tactical deployments. Businesses place the highest value on an existing relationship with a service provider and the provider’s industry-specific expertise, suggesting that trust and domain knowledge are critical for decision-makers.

The HFS Industry Cloud Continuum

Outcomes:

Deconstructing Industry Cloud:

Industry Cloud needs to blend utility requirements with value creation, balancing compliance, regulation, security, data governance, and back-office processes (industry utility) with business model transformation, operating model transformation, innovation, and ecosystem-driven collaboration (value creation).

Value levers for Industry Cloud include:

4. Horizons Results: Industry Cloud Service Providers, 2024

HFS Horizons – Industry Cloud

HORIZON 3 – Market Leaders:

HORIZON 2 – Enterprise Innovators:

HORIZON 1 – Disruptors:

Horizon 3 (Synergy): Industry Cloud providers demonstrate the ability to drive a "OneEcosystem" approach by finding completely new sources of value, strategy and execution capabilities at scale, well-rounded capabilities across all value creation levers (talent, domain, technology, data, and change), driving co-creation with clients and ecosystem partners, effective envisioning of outcomes and providing business assurance for transformation, and referenceable and satisfied clients driving new business models based on the partnership.

Horizon 2 (Experience): Cloud-native transformation providers demonstrate the ability to drive real business outcomes and stakeholder experiences while achieving cloud-native transformations, support clients on their cloud-native transformation journey, global capabilities with strong consulting skills and partnerships with all major hyperscalers, proven and leading-edge proprietary assets including industry platforms, clear articulation of cloud target operating model, capability to deliver cloud-native transformation, and referenceable and satisfied clients for ability to drive business transformation.

Horizon 1 (Optimization Outcomes): Technology transformation providers demonstrate the ability to drive functional optimization outcomes with selective industry capabilities, strong implementation capabilities, deep engineering capabilities driving speed and efficiency, offshore-focused with strong technical skills, robust fundamentals of technology transformation, technology and capability focus, and referenceable and satisfied clients for ability to execute technology transformation.

5. Publicis Sapient Profile: Industry Cloud Service Providers, 2024

Publicis Sapient: Advisory-led approach aiming Industry Cloud at value chain disruption and ecosystems

HORIZON 3 — Market Leader

Strengths:

Development Opportunities:

Relevant M&A and Partnerships (2021–2024):

Key Clients:

Global Operations and Resources:

Flagship Internal IP:

6. HFS Research Authors

About HFS

INNOVATIVE | INTREPID | BOLD

HFS is a leading global research and analysis firm trusted at the highest levels of executive leadership. Our mission is to help our clients—major enterprises, tech firms, and service providers—tackle challenges, make bold moves, and bring big ideas to life by arming them with accurate, visionary, and thought-provoking insight into issues that impact their business.

Our analysts and strategists have deep, real-world experience in the subjects they cover. They’re respected for their independent, no-nonsense perspectives based on thorough research, demand-side data, and personal engagements with industry leaders.

We have one goal above all others: to propel you to success.

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