IBM’s early-mover grip on blockchain may not be so easy to attack; but other enterprise champs like Oracle, Microsoft and Fujitsu are not sitting in the dug-out anymore. Who will clinch the home-run then?
Something’s strange about these headlines. IBM together with SAP and Cloud! Oracle mixing DevOps and Blockchain! And the most twisted- almost every dyed-in-the-wool enterprise software player is okay being in the same room as Linux (in the shape of Hyperledger), and not feeling nauseous.
Strange bedfellows, you may say. Smart choice of bedsides, we would add.
Only Blockchain could finish the new décor of these war-rooms; all the furniture rearranged a bit by Cloud and As-a-Service forces is finally coming together. But make no mistake; the enterprise playground is still a battlefield. Albeit, with new rules and ditches.
Stop rolling the dice
Gone are the days when one’s seat on the throne was taken care of by corralling skilled coders or piling up sturdy hardware or petting the golden goose of AMCs (Annual Maintenance Charges). Mothballed business-models, smarmy salesmen, Braille-like legal fine-print and clever boxes to lock customers in – Enterprise IT, in short. Every once in a while a small whiff of change came, varnished the software a bit and everything went on as usual. Skirmishes between vendors happened but they served more popcorn than choices for frustrated, and alternative-starved, customers.
Then, arrived Blockchain. Meh! Being random, complacent and smug would not be an option anymore. The future – where no grandfatherly clause for existing software-suites could be eked out. It was time to pick up a lane. Plus, a ladder. IBM realized it fast. And then?
Bye Bye Poker-faces
Being an early bird, often, brings worms, good songs and a slow flock.
IBM is currently leading, by a few lengths, in the blockchain enterprise space. Other principal players promoting Distributed Ledger Technology (DLT) solutions boil down to Microsoft, Oracle, and Fujitsu, as Stephen Perrenod, Partner, OrionX stacks it.
He calls it the first lap. “IBM appears to be leading with the most use-cases to promote, in areas like pharmaceutical procurement, trade finance, and crude-oil transactions. They have a strong presence based on Hyperledger technology. IBM and Digital Asset contributed the Hyperledger Fabric open-source components, which they are promoting heavily in commercial applications.”
The view is seconded by another seasoned enterprise industry analyst. In the microscope and telescope of Charles King, Principal Analyst, Pund-IT Research, IBM has focused on blockchain longer, invested more in development and has more mature commercial-solutions than any other vendor.
Do note here that Hyperledger is an open-source effort. One that includes Cisco, Fujitsu, Hitachi, IBM, Intel, NEC, and SAP as Premier members. Also, Intel has contributed their PoET (Proof of Elapsed Time) consensus algorithm (which relies on secure hardware features) in recent Intel chips to provide random ‘leader’ selection for transaction validation.
Perrenod observes that Oracle also bases its solutions on Hyperledger, and has recently announced their own tools layers to ease Hyperledger Fabric development.
King, too, weighs in the part that IBM’s prime platform for blockchain implementations is its LinuxONE mainframe systems. “And for good reason. LinuxONE is entirely Linux/open-source-enabled (reflecting the open-source nature of blockchain technologies) and still delivers mainframe-quality reliability, availability and security.”
In other words, players – from IBM to Oracle- are adapting in a big way to jump the hoops as fast as they can. There is little room for snakes of gaps or delays or allergy to open-stuff in this new round. Plus, some of them have started going for rock-climbers to get past those long ladders swiftly. They do not mind sharing a harness with an old rival as they crawl up here. But that does not mean they are throwing away their old shoes or cards. Or towing the same game-plan.
All Boilers in the Ship
Cloud, SaaS and Artificial Intelligence are investments that will endure and accelerate the blockchain battle – if we see how SAP and Microsoft are playing it. As to others, some are playing it safe and some are trying entirely-new ammo to get an edge over the first-movers.
Microsoft was the first to put blockchain in the cloud on Microsoft Azure. “They are taking a more varied approach with support for Corda, Ethereum, and Hyperledger environments. They are also building bridges from blockchain to applications including Salesforce, SAP and Microsoft SQL – one can combine blockchain and relational database technology as needed. Use-cases include maritime-insurance for the large shipper Maersk and grain food-processing supply chains with Buhler.” Perrenod dissects.
If we look at Oracle, King considers it a good example of a software vendor whose strengths in database-technologies contribute significantly to its blockchain strategy and solutions.
“Application focus is on supply chain. They have a use-case for shipping with CargoSmart. They promote connectors to Oracle SaaS and IoT solutions.” Perrenod tells when he analyses Oracle’s foray.
Come to Fujitsu, and looks like it is going in a different lane with prototypes. Now that’s not a small hat in the ring given the pressure on many blockchain use-cases to be production-grade and scalable. Perrenod cites the Fujitsu Laboratories in Japan that has developed technologies that are being prototyped at Mizuho, one of the large Japanese banks, which are developing a J-coin for retail use. “Fujitsu has been involved with a pilot project for interbank settlement with the Japan Bankers’ Association.”
Then there is HPE with a mission-critical DLT solution that was unraveled in 2017 to bring enterprise-grade capabilities to blockchain-workloads. King slices how the solution focuses on HPE Integrity NonStop platforms and was developed in partnership with enterprise software firm R3.
What is interesting here is the choice of Integrity NonStop, mainly because of how little HPE has discussed it in recent years. “Originally called Tandem NonStop, the platform came to HP as part of the Compaq acquisition in 2000. NonStop systems were occasionally compared to IBM mainframes though the platforms’ architectures are significantly different. But in any case, HPE’s decision to leverage NonStop solutions for this market reflects the essential enterprise-focus of its blockchain strategy.”
Although King avers he has not seen much in the way of customer success-stories coming from HPE.
Let’s not forget Dell in this race. Reflecting on blockchain investments as part of an effort focused on emerging strategic tech that the company has made, King contends that this approach mirrors Dell’s strategy of waiting to move into markets until they begin to show commercial potential.
Still the company is also aligned with VMware’s Project Concord which is focused on modifying the Byzantine Fault Tolerance consensus algorithm commonly found in blockchain networks. And that’s a critical issue for companies that want to maximize the performance and efficiencies of systems used to support blockchain environments, as King pins it down. Watch out for the company emphasizing the price/performance efficiencies they’ve been able to capture as Dell EMC moves ahead with commercial solutions, he augurs.
So who will win – eventually? Or what? One’s software/hardware forte? One’s lineage of big-ticket clients? One’s ability to serve the finger-food that customers want? Or one’s proven confidence with using blockchain right inside the trenches?
All of that, and one more strength, perhaps. Thomas George, Head, CMR Research reasons that adequate blockchain expertise, CoE (Centre of Excellence) investments, alignment with emerging technologies, scalability and sustainability are critical success factors for blockchain use. “Anything that fizzles out five years down the line is, hey, clearly not worth it.”
King also underlines how the efforts of these players mirror their key experience and IT assets. “That’s not a surprise but it’s worth discussing given the fact that blockchain is both software- and hardware-dependent, at least if you hope to maximize overall performance or specific characteristics.”
Hark! The Snake Sits at 99
Familiarity. That’s one thing that has been mercilessly hurled out of the window with the arrival of blockchain in the enterprise matrix. The simple quadrant is now as tricky as a Rubik Cube.
Yes, the market for blockchain appears to be growing more slowly than many hoped; and here IBM boasts some high-profile customer wins and pilot-projects.
King reminds how the company is pitching blockchain as an ideal platform for managing billions of dollars worth of transactions in industries ranging from financial-services to global-shipping. “So far, the company’s message seems to be working.”
But you never know where and how a new contender could jump in. it won’t be enough to outstrip, or join hands with, frenemies. There will be other threats to get strapped for other than slips-ups on poor integration, sloppy implementation and crummy production-readiness. There is more to saddle up for, apart from convincing wary customers to walk on the coals they call as blockchain.
Like unexpected rivals. As Perrenod warns, one should also watch the Chinese large-technology companies. “Alibaba, Baidu, Huawei and Tencent are all entering the BaaS (Blockchain-as-a-Service) space, so things will only become more and more interesting.”
That’s not all. There are dark horses with silent hooves on their way too. Bank of America analyst Kash Rangan expects a $7 billion BaaS market. Interestingly, Bank of America has some 43 patents in the blockchain space, more than IBM! And the global trade finance market runs into many trillions of dollars – one can almost hear Perrenod chuckling when he reminds of this pot at the end of the rainbow.
As he quips well – There will be more than 8 horses in this race!
Now that only means one thing – The Game, my friend, is on!