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

Like what you are seeing?

Signup today for free, and receive email notifications about Bob's new insights.

I will not sell or share your information with anyone.

You have Successfully Subscribed!

%d bloggers like this: