With understanding and acceptance of blockchain increasing, enterprises have started adopting blockchain to store digital records in a secure and auditable manner. In May 2018, we saw Microsoft’s blockchain workbench focused on integrating data and systems and deployment of contracts and blockchain networks. In October 2018, Microsoft Azure joined forces with Nasdaq to integrate blockchain technology into Nasdaq’s framework with an expectancy to speed-up transactions on the stock exchange.
Following these announcements, this month Microsoft unveiled its fully managed Azure Blockchain Service, a package designed to simplify the processes and eliminate the pain points of blockchain networks. Microsoft Azure blockchain service will provide the required infrastructure, connection to services to develop, run and take advantage of applications on its Cloud-based platform.
To leverage blockchain Microsoft and J.P. Morgan announced a partnership to accelerate the adoption of enterprise blockchain. Quorum, an Ethereum-based distributed ledger protocol developed by J.P. Morgan will be the first ledger available through Azure Blockchain Service, on the cloud.
Joining the bandwagon, Starbucks will use Azure and the Ethereum blockchain to track coffee from farm to the cup. In the same way, with a forward-thinking approach, Microsoft and GE Aviation collaborated to bring blockchain into aviation. GE Aviation has built a supply chain track-and-trace blockchain with the help of Microsoft Azure to monitor and collate data in relation to aircraft engine parts, life cycle, when to repair, this technology that the group has come up with is termed as ‘TRUEngine’.
Unfolding blockchain for “regular” businesses and SMEs
Blockchain technology, by its very nature leads itself to the digital transformation journey of an enterprise. Blockchain can address some of the pitfalls of digital transformation such as identity, security, and trust. From digital identity to tokenisation to using smart contracts to automate businesses, blockchain technology is swiftly establishing itself as a key enabler of the emerging digitised enterprise.
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Speaking on the subject, Ecosystm’s Principal Advisor, Amit Sharma thinks that “For Small and Mid-Size Enterprise (SMEs), blockchain can simplify and automate processes related to Trade Finance which would mean less paperwork and automation in supply chains and it also opens up a huge alternative finance channel to deal with their cash flow challenges.” |
Overall the blockchain network should facilitate the interworking between IT systems, financial systems and ledgers that are today primarily managed in silos and require heavy manual processes.
Are we already there?
“All disruptive technology has a ‘tipping point’ – the exact moment when it moves from early adopters to widespread acceptance. We are now approaching the tipping point for blockchain. Even though the development of blockchain for business is still in its early stages, business leaders have swiftly moved from understanding blockchain and its potential uses to running pilots,” says Sharma.
Blockchain has attracted attention across industries such as financial services, transportation and shipping, healthcare, energy and utilities, and supply chain management.
These share some common themes. Blockchain is a natural fit for use cases that are transactional but with a high degree of process complexity or volume. Blockchain will become the default technology wherever there is a need to ensure the integrity of data.
Blockchain Adoption by Organisations
Despite the flurry of activity and promising initial developments, blockchain faces a number of obstacles that will need to be overcome before companies choose to adopt it on a broader scale. Its decentralised network runs counter to the current business emphasis on centralising data or functions to support security efforts. Users and operators alike must shift their mindset to embrace and trust the system.“Among blockchain’s selling points is its security: high encryption and protocols. Since the general public largely doesn’t understand how the technology works, many still have concerns with data privacy and cyber security” says Sharma. “As with all new technology, when it comes to blockchain, business leaders should view any initial use cases as part of their enterprise risk management. Executives are attuned to the business and risk implications of blockchain. And in many cases, blockchain, like other technology platforms and systems, can be covered under existing insurance programs.”
Implementation by the large technology providers
“With the large technology providers such as Microsoft and AWS now offering BaaS (Blockchain-as-a-Service) over multiple frameworks supported by a ‘Pay as you use’ model, this technology is much more accessible. Pre-built integrations to the network and infrastructure services that are being offered by some of these players will significantly reduce the development time and cost for enterprise customers” says Sharma.
The next several years could see blockchain move from testbed to becoming an essential business tool, so staying abreast of the latest developments and how it is being used will be critical.
Rightly so, the first day of the Mobile World Conference was taken up by more and more air time on the ever coming 5G networks. Was 2019 going to be the year when operators around the world would finally deploy 5G in volume? The booths in the halls at the Fira Grand would indicate that ‘if you build it, they will come’. Indeed the speculation that 5G is the next big game changer is over – it is the game changer for this next turn of the technology dial.
However, let’s assume that the 5G hype is in the rear view mirror and we look to see what could be ahead of us in the mobile and telecom industry. At the end of the first day of this year’s MWC, I may have seen the future opportunity – and it is awesome! Pat Gelsinger asked the question “why can’t we build the telco networks like the clouds have been built for with scalability, flexibility, efficiency, and agility”? It’s a very fair question. After all, we do have Network Function Virtualization (NFV), and we will have new 5G services, so why not a new telco cloud?
I spent time with two companies that may show us a glimpse of the future network and cloud infrastructure. The first is the Israeli software startup, DriveNets with its solution “Network Cloud”. DriveNets is focused on helping service providers disaggregate proprietary routers from their networks as they move to 5G. DRiveNet’s Network Cloud solution aims to disrupt the current network business model by separating network costs (e.g. proprietary hardware functions) to create network functions from its software stack and two ‘white label’ hardware building blocks. The entire network infrastructure is software-centric allowing for agility, scalability, and normalizing costs with business growth.
However, Network DriveNets is an unusual startup in that it came out of stealth mode with $110 million in its first round of funding. The company was founded in 2015 by Ido Susan who should be familiar to Cisco watchers as he sold his first startup, Intucell (self-optimising network technology), to them for $475 million in 2013. DriveNets other co-founder, Hillel Kobrinsky founded Interwise (web conferencing) which was snapped up by AT&T for $121 million. To that end, the company is well funded and has the ability to sustain itself long enough to potentially disrupt the $50 billion network hardware business.
The second is Rakuten Mobile, a well-known name in Japan, but the first mobile virtual network operator (MVNO) to launch there in over 10 years. MNOs are not new so what makes Rakuten different? The company’s CTO, Tareq Amen explained to me that they are building the world’s first end-to-end fully virtualized cloud-native network running all of its workloads in the cloud. Being a fully virtualized network enables Network Function Virtualization to take advantage of cloud computing basis assets where a service delivery platform can be implemented, customized and scaled at speed. Finally, all of Rakuten’s core technology including its Radio Access Network (RAN – a topic that has been highly discussed at this year’s MWC) on 5G thus delivering immediate and actual 5G services. This compares to most of the rest of the industry who will have to build an uncomfortable transformation roadmap from 2/3G and LTE to 5G. While Amen’s strategy is compelling, there are a few technical hurdles to overcome. For example, enterprise-grade 5G indoor coverage isn’t fully there yet so Amen will have to rely on the operators that he is competing against who have that real estate.
So why highlight DriveNet and Rakuten in the same blog? In Rakuten’s case the CAPEX and OPEX business models for operators may be turned on their heads by the fact that its network is taking all of the competitive advantages of 5G while offering customers as disruptive pricing models and services. In a country such as Japan where traditional operators have struggled to modernize their networks, this could be a competitive threat. Equally, there could be a global rise in copy-cat pure 5G/cloud-based MVNOs spring up and fiercely compete against the incumbent local operators as well as give other MVNOs a tough time. As for DriveNets – it’s simple…it’s software and virtualization of the switch and router market which is very appealing to the service providers. It will commoditize the hardware, lowering their costs while allowing them to continue to focus on new 5G services.
IBM is aggressively pushing their products and services with multiple partnerships being announced over the last few months.
In the recent announcement, HCL Technologies and IBM stated that they were collaborating to assist organisations on their hybrid cloud journey. The joint services will offer seamless integration of their customers’ cloud across any private, public and on-premise environment. The hybrid cloud approach is aimed at eliminating the concerns of mixing the different cloud environments yet maintaining scalability and security. HCL will feature new refactoring and re-platforming services to allow organisations to migrate, integrate and manage apps and workloads on IBM’s cloud.
Speaking on the subject, Phil Hassey, Principal Advisor ,Ecosystm, thinks that “the most attractive aspect of this collaboration is that it will bring together the best of both vendors. IBM has such a long history in Infrastructure Management, whereas HCL has – most particularly in the past 5 years or so – built up capability in the space.”
The good news for tech buyers is that they will derive benefits from HCL’s customer knowledge and hands-on approach with the combination of IBM technology, cloud and – of course – Watson. HCL has acquired significant IBM assets that they could extract more value from. The infusion of AI into hybrid cloud will lead to increased automation, improved outcomes and effective investments by clients.
When we look at the individual benefits to IBM and HCL from this deal, Hassey says, “IBM needs new customer logos and HCL can provide that. Conversely, IBM can provide larger enterprise clients to HCL. However, it is not a straight customer swap, they will work to maintain relationships independently.”
IBM is pushing hard towards their plans to capture more market with many big deals announced recently – and undoubtedly many more yet to happen. It is well-documented that IBM has gone through many reinventions but is still deeply entrenched in many of the world’s largest organisations. “IBM is such a large machine that different aspects and offerings are always operating at different speeds”, says Phil. “It needs to accelerate the uptake of Watson, and Watson being available on any cloud will help this.”
The hybrid cloud is desperately looking for big scale integration and transformation capabilities, so this agreement between HCL and IBM will hopefully help kickstart that.
The growth in public cloud platforms and applications is just starting to hit its strides. In 2019, more companies will spend more money moving more of their applications and processes across to the public cloud. Many cloud markets will move into hypergrowth. Cloud computing adoption is moving beyond the fast adopters to the mass market – so dynamics are changing. Our top five predictions for 2019 are:
Many SaaS Applications Will Move into Hypergrowth
If you think that the software-as-a-service (SaaS) market is a mature one, think again. Yes, cloud-based solution providers such as Salesforce have a lot of customers for their CRM and Marketing platforms, as do vendors such as Microsoft and Google for their collaboration suites – but even the cloud-based CRM market is set to explode in 2019 as the number of companies looking to deploy SaaS-based applications nearly doubles. Most companies across the globe still have most of their applications hosted in their own or partner data centres. The opportunity in the SaaS market is still huge – and will be that way for years to come. SaaS-based BI & Analytics will move from 10% of companies using it today to 21% in 2019, marketing applications from 10% to 24% and UC&C from 11% to 21%.
Security Will Return to Being the Number One Barrier to Public Cloud Adoption
As the cloud providers start to penetrate the “mass market” – involving companies that are not fast adopters and do not push the envelope and procrastinate over big technology or business decisions – expect the question of security to come up again. And again. And again… When public cloud first entered the business consciousness 10-12 years ago, security was the number one reason why companies did not embrace it. It slipped down the list over the past few years as more leading, fast moving businesses overcame this objection – but with more companies looking to implement public cloud services, more of the objectors are coming back out of the woodwork to make security a number one blocker again.
Partners Will Come Back into Fashion for Cloud Deployments
The very first companies to move to public cloud platforms or software typically used a partner – they were going where few had been before, and they relied on the expertise of external providers to help them make the move. But the past five or so years have seen many businesses eschew partners in the move to the public cloud – as they looked to learn the skills that they require both to make the transition and for the ongoing management and automation of the cloud environment, themselves. But as the market for public cloud software and platforms moves into hypergrowth, more companies will look to partners to help them with the transition to cloud – and more importantly – the ongoing management of their cloud environments.
Cloud Ecosystems Will Accelerate the Adoption of Artificial Intelligence Solutions
Today nearly every software provider is looking at the opportunity to make their software smart – to have the software learn, predict, personalise, see, sense or converse. Some have started by building their own AI tools – but these companies are learning that these tools are more lines of code that need to be maintained, secured, evolved and improved. Smart ISVs are building their AI capabilities using the tools that already exist on the public cloud platforms. In fact, this move is seeing more ISVs move away from hosting the cloud version of their software from their own cloud platform to one of the big five or six public cloud platforms. As more ISVs make their software intelligent, more customers will be able to adopt AI solutions that are embedded in their existing software tools and platforms.
Companies Move to the Cloud for the Features and Functions, but Will Stay for the User Experience
While companies might move to the public cloud because of the features, functions, technical capabilities or in-country data centres, what keeps customers on cloud platforms is the user experience. Some of the global public cloud platforms and software providers have not created the best user experience – yes, the technologists and developers might love them, but cloud usage is quickly moving beyond the technology team. AI tools need to be used by data scientists and product managers, while automation tools will be used by Customer Experience professionals. Business analysts want to be able to create or vary processes without the intervention of the IT team or cloud management partner. User experience will be key to increasing cloud usage within existing customers.
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