An “Industry Cloud” (IC) or “Industry Operating System” (IOPS) is a SaaS, multi-tenant platform that connects buyers, suppliers and intermediaries within an industry and delivers them valuable web-based services. Successful Industry Clouds solve the “chicken and egg” problem of industry participation and then typically exhibit network effects–increasing returns to scale and “winner take all” outcomes within an industry. Meaning they can get big and crowd out their competitors! This makes Industry Clouds interesting to build and own.
Examples of successful Industry Clouds include:
- Concur in travel-related services
- Emdeon and GHX in different aspects of healthcare
- iTradeNetwork in food service
- Real Page in property management
- Sterling and GXS in retail/CPG and auto
- Descartes in logistics
- And many more smaller, private ones that are growing rapidly
These are important companies with sizeable revenues, EBITDA, and valuation multiples as demonstrated by some of the public (or semi-public) Industry Clouds shown below:
| Industry in the Cloud Providers ($ in millions) |
||||||
| Company | Industry | Revenue | EV | EV/Revenue | EV/EBITDA | Notes |
| Concur | Travel | $ 317 | $ 2,390 | 7.54 | 45.06 | Source: Yahoo Finance |
| Emdeon | Healthcare | $ 1,040 | $ 2,000 | 1.93 | 8.11 | Source: Yahoo Finance |
| iTradeNetwork | Foodservice | $ 150 | $ 525 | 3.50 | UNK | Source: Analyst estimates, Roper Acq. |
| Ebix | Insurance | $ 140 | $ 764 | 5.44 | 12.3 | Source: Yahoo Finance |
| Real Page | Property Mgmt | $ 204 | $ 1,700 | 8.31 | 62.46 | Source: Yahoo Finance |
| Descartes | Logistics | $ 105 | $ 377 | 3.59 | 12.99 | Source: Yahoo Finance |
| GXS | CPG/Retail | $ 418 | NA | NA | NA | Source: Company 10k |
| Blackboard | Higher Education | $ 465 | $ 1,620 | 3.48 | 18.66 | Source: Yahoo Finance |
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