This week we release our updated Enterprise Blockchain Market Forecast, it examines the market dynamics and growth to 2025. It’s one of our most-read reports, hence the update, but also one of the most controversial. Enterprise For blockchain has its ardent champions and it’s equally vocal detractors. Although as analysts we try our best to be ‘opinionated’ pragmatists so one thing we know for sure is that the numbers don’t lie. So we can state with certainty that Enterprise Blockchain is a growing market and is set to continue to grow substantially…. Even though it will face plenty of challenges along the way.
Through the course of our research into this update, a number of industry experts have commented that Blockchain has a lot in common with AI (Artificial Intelligence) in that everyone is talking about it but few actually know how it works or what to do with it. There is some truth to that analogy but Blockchain faces some, if not unique, then special challenges of its own. At the highest level, we can distill the challenges into two or three buckets.
1: Market Education
2: Business Value
3: Cultural
Much like AI, there is a lot of hype about Blockchain, and there is a lot of deep technical information available. But little in the way of pragmatic, business-level information to help people to understand how Blockchain can be utilized in their day to day business processes. If there is little in the way of education, there is even less available to help calculate the business value of Blockchain. These two challenges can be overcome, indeed though it’s early days, work is already underway to fix that.
The biggest challenge by far is number 3, culture. Blockchain by definition imposes change, or if you prefer ‘transformation’. The fundamental principle of Blockchain is based on the concept of the decentralization of trust. In practical terms, this means that companies that work in some way or another with one another, now need to share and work collaboratively. However, few people, in the West particularly like to share. Business relationships in the US and Europe for example, are typically transactional in nature. Contrast that with business in the rest of the world where business relationships are viewed more as true trading partnerships. This is a gross overgeneralization, but the rapid growth and roll out of Blockchain in China, Korea, or the Middle East contrast starkly with the slow and reluctant embrace of the same technology in the US. Again, this is an overgeneralization and the reasons for growth may vary, for one thing, they are not always due to business relationships. For example, one can consider that China wants to maintain control, or that Korea has much better tech infrastructure to leverage than the US.
Either way, in any collaborative relationship, there has to be some give and take, as well as a trigger point that drives a meeting of minds. This meeting of minds can be from an industry consortium, government regulation, or a kingpin in a supply chain demanding everyone get on board. In a sense then, there has to be a centrally driven demand for a decentralized approach to working. That sounds like a contradiction in terms, but nevertheless, its reality. Government pressure is in fact working pretty well to drive Blockchain adoption in some regions, in others such ‘interference’ is an anathema. Here in the US, the hope has been that industry consortiums will find a consensus and drive growth, but to date despite lots of meetings and grand visions, there is little forward momentum to see. In the US and most likely Europe too, adoption may just as likely come from outsized market players that simply demanding their suppliers adopt their (Blockchain) way or the highway. Not nice maybe, but ultimately effective.
Either way, applications of Enterprise Blockchain are coming – we recently wrote about two good examples one from industry giant Oracle, the other from startup IPwe. There are many others out there, indeed we talked with a UK based vendor just today. But we are always on the lookout for others, big or small, rich or poor, the only proviso is that they are doing something innovative and disruptive with blockchain in the market. So if you are one, or you know one that meets those criteria let us know!