IBM is gearing up for a year when multiple enterprise blockchain projects are expected to go live. Supply chains are a strategic area of focus for the company, and with the recently announced IBM/Maersk joint venture in particular, it is committed to advancing global trade digitization using blockchain technology. According to our Voice of the Enterprise, Digital Pulse, Budgets & Outlook 2017 Q4 survey, 4% of enterprises are using blockchain in production and 12% are in the discovery phase or working on proofs of concept. Several of these POCs may be moving into production in 2018.

The 451 Take
Enterprise blockchain solutions and their praised benefits look good on paper; however, real-world experience and demonstrated gains are what can put blockchain technology on the map as a valid IT solution for enterprises. Will 2018 see a shift from experimentation to production deployments? According to IBM, yes, it will. IBM's Blockchain Platform has been honed for three years now in more than 400 client engagements across several industries, and the company has also made significant efforts to assemble consortia that can use blockchain's capabilities to solve cross-industry and inter-enterprise business problems. IBM is in a good position to move several of its pilot projects into production this year. However, it remains to be seen whether/when the company will be able to generate profitable revenue.

IBM is among the early believers of blockchain technology and has been working on a variety of use cases with hundreds of clients in the last couple of years in an effort to play a leadership role in developing, governing and operating multi-party blockchain-based business networks. The company has been taking part in blockchain's open source development through the Hyperledger project, offering blockchain as a service for developers, and supporting the market with consulting resources to promote and advance the use of this emerging technology across industries.

In August 2017, IBM launched its Blockchain Platform within the context of an actual use case: the IBM Food Trust with partners Dole Food Company, Driscoll's, Golden State Foods, Kroger, McCormick and Company, McLane Company, Nestle, Tyson Foods, Unilever and Walmart to address global food safety using blockchain technology.

Last month, Maersk and IBM publicized their intent to establish a joint venture with the aim of digitizing the global shipping ecosystem using blockchain technology (along with AI, IoT and analytics). This collaboration started in 2016 with organizations such as DuPont, Dow Chemical, Tetra Pak, Port Houston, Rotterdam Port Community System Portbase, the Customs Administration of the Netherlands, and US Customs and Border Protection being part of the pilot project. This joint venture should enable IBM and Maersk to commercialize and scale their digital offerings to a broader group of corporations and customs and government authorities. According to IBM, many have already expressed interest, including General Motors, Procter & Gamble, Singapore Customs and Peruvian Customs. The new company will be headquartered in New York, and commercial offerings are expected to become available within six months.

The idea is to establish an open global trade distribution platform – built on the IBM Cloud and powered by Hyperledger Fabric – that would provide a much-needed transparency and efficiency through enabling all actors of the global trade supply chain to have end-to-end and real-time visibility into all relevant information about products and shipping events. The two core offerings that the joint venture plans to commercialize initially are 'shipping information pipeline' and 'paperless trade.'

Interoperability will be crucial to drive adoption because there will be separate blockchain networks eventually interconnecting with one another to form a network of networks – multiple networks of goods connecting to networks of ports, air and land transport connecting to payment and trade finance networks. Global trade can become truly frictionless only if these networks work together.

Business model
IBM has built out its blockchain go-to-market model in a way that it can work with enterprises in different stages of their blockchain journey – discovery and understanding of the technology, pilot projects, activating networks, and scaling and expanding active networks. There are different teams with different technical and business skill sets that engage with clients to help them achieve their goals: the platform team to understand the technology and create pilot projects, the solutions team to run pilot projects and activate networks, and the ecosystem team to scale and expand active networks.

According to IBM, the most common approaches enterprises take to build blockchain networks are either consortium-based (where there are several founders that may or may not form a joint venture) or founder-directed (where an individual founder provides strong direction). There are also community-based networks that may be driven by industry standards bodies or existing non-blockchain network owners.

In terms of pricing, IBM offers a tiered subscription plan based on deployment model:

  • Starter networks for developers: per CPU/hour (and free open source tools)
  • Entry edition (getting started and easy onramp for enterprises): per peer/month
  • Enterprise edition (enterprise production-ready, advanced services): per peer/month
  • Enterprise+ edition (dedicated resources for performance and isolation): per peer/month
  • IBM also acknowledges that there has been an acceleration in the use of digital tokens in many use cases, and it is considering supporting the capability.

According to IBM, in 2017, customers have been primarily buying the Blockchain Platform as a cloud service and using the Blockchain Garages (blockchain workshops) to explore both governance and how to get started. These customers value the fact that IBM can act as a single provider and that it has more than just technical expertise. Blockchain-based business networks need enough of the right participants to make the concept work. This is referred to as a minimum viable ecosystem. IBM's strategy includes efforts to assemble consortia that can use blockchain's capabilities to solve cross-industry and inter-enterprise business problems, remediate inefficiencies, and adopt a new way of doing business.

In 2016, AWS teamed with Digital Currency Group to create a blockchain-as-a-service offering for financial services firms. In December 2017, the company announced the launch of the AWS Blockchain Partners Portal to support integration of blockchain solutions with systems built on AWS. According to the company, Sawtooth Supply Chain, Sawtooth 1.0, R3 Corda, PokitDok and BlockApps Strato are available as one-click deployments.

BlockApps is an emerging vendor that is commercializing blockchain technology as an enterprise-grade application development and integration platform. Its Strato platform develops applications that use the Ethereum blockchain as communication and integration middleware to connect and run distributed enterprise applications. BlockApps was the first company incubated out of investment firm ConsenSys in 2015, and it is a founding member of the Enterprise Ethereum Alliance.

HPE is working with financial customers, automakers and airlines on implementing blockchain-based applications for different use cases. Its Mission Critical Distributed Ledger Technology offering is based on R3 Corda and can be deployed on-premises, as well as in the cloud or in a hybrid environment. This offering is expected to be publicly available in early 2018. HPE works with Accenture and PwC to help customers understand the benefits and challenges of blockchain, and under the Pointnext umbrella, it offers hackathons where developers work with HPE experts on use cases and proofs of concept. HPE is also a member of the Enterprise Ethereum Alliance and is talking with Hyperledger to learn how it can help customers that use those platforms.

Microsoft is a founding member of the Enterprise Ethereum Alliance, and its blockchain-as-a-service offering was designed to work with the Ethereum blockchain. Its open Confidential Consortium (Coco) framework is intended to reduce the complicated development techniques needed to meet the operational and security needs of enterprises. Coco basically reevaluates existing assumptions of public blockchains in the context of a permissioned consortium where participants are known. With Coco, Microsoft expects to offer a foundation with which existing blockchain protocols can be integrated to deliver enterprise-ready offerings.

With its Blockchain Cloud Service (BCS), Oracle aims to enable enterprises to explore different blockchain use cases without having to set up new infrastructure for each. It is a PaaS offering that leverages Hyperledger Fabric v1.0, and the company plans to expand the platform's capabilities as customer needs dictate. Oracle BCS uses the company's public cloud and is available on the Oracle Cloud Machine for on-premises deployment. BCS is also offered as a managed service, and enables integration with existing Hyperledger Fabric applications, as well as other applications for enterprise resource planning, supply chain management and customer experience management within the enterprise and across companies.

SWOT Analysis


IBM's efforts in the past three years position it as a technology and thought leader in the emerging enterprise blockchain market.


IBM still needs to prove that its business model can generate profitable revenue.


According to our latest research, 12% of enterprises are evaluating blockchain technology or working on POCs, and another 10% have plans to implement it within the next 22 months. Because there is little real-world enterprise experience and a scarcity of skills in blockchain technology and potential applications, there is a sizable opportunity for third-party expertise and support for use-case definition, POCs and production deployments.


Several of IBM's rivals in the IT markets have stepped up their efforts and have blockchain offerings that cater to enterprise requirements.
Csilla Zsigri
Senior Analyst, Cloud Transformation & Blockchain

Csilla Zsigri is a Senior Analyst for 451 Research’s Cloud Transformation channel. Csilla also works on custom research, providing strategic guidance, as well as market and competitive intelligence, to technology vendors, service providers and enterprises.

Garrett Bekker
Principal Security Analyst

Garrett Bekker is a Principal Analyst in the Information Security Practice. He brings a unique and diverse background, having viewed enterprise security from a variety of perspectives over the past 16 years. Garrett spent over 10 years as an equity research analyst at several investment banking firms, including Merrill Lynch, where he was the lead enterprise security analyst, in addition to covering infrastructure software and networking companies.

Keith Dawson
Principal Analyst

Keith Dawson is a principal analyst in 451 Research's Customer Experience & Commerce practice, primarily covering marketing technology. Keith has been covering the intersection of communications and enterprise software for 25 years, mainly looking at how to influence and optimize the customer experience.

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