Introduction
Production use of enterprise blockchain seems to have stalled, but activity and interest remain strong. In this report, we take a closer look at what our recently collected enterprise adoption data reveals.
The 451 Take
We don't believe that organizations are withdrawing from adopting blockchain, but they seem to have a more realistic assessment of the technology's strengths and weaknesses, and what it takes to progress from proof of concept to live implementations. The best course of action for businesses is to invest in blockchain proportionally, and work with partners on roadmaps and milestones for potential use cases as the technology matures.
Details
According to 451 Research's Voice of the Enterprise: Digital Pulse end-user research, production use of blockchain technology in the enterprise space hasn't changed in the past two years; however, interest in adopting the technology remains strong. This apparent lack of progress can be explained by challenges around skills gap and usability, as well as overly ambitious projects underestimating the importance of nontechnical factors that are key to adoption. We continue to see more interest in APAC and EMEA.
Our end-user research also indicates that blockchain technology is currently not top of mind for enterprises compared with other emerging technologies associated with digital transformation, especially data-centric ones such as data analytics and artificial intelligence. Only 8% of our survey respondents said that they believe blockchain technology has great game-changing potential for their organization over the next three years. However, EMEA-based businesses find blockchain technology more relevant to their organization than their North American counterparts (14% vs. 5%). In any case, we expect this number to increase as real metrics and insights in terms of value gained from high-profile enterprise blockchain implementations are revealed.
Among all industries, the financial sector is the one that has been experimenting with blockchain and distributed ledger technology (DLT) the longest: 60% of financial services firms that participated in our latest VotE: Digital Pulse survey indicated that they are at least considering implementing blockchain technology, with 25% already using it or in trials, and 13% planning to implement blockchain within 24 months. Clearing and settlement, cross-border payments and trade finance are some of the use cases that financial technology and service providers are currently focused on.
Financial service firms have been investing in blockchain specialist startups. Key investors include Citigroup, CME Group, Goldman Sachs Group, Wells Fargo and JPMorgan Chase. In 2019, global payments giant Visa acquired Earthport, a British supplier of cross-border payments software and services focused on blockchain, and PayPal joined the extension of a series A funding round in blockchain-based identity startup Cambridge Blockchain.
Decentralized finance (DeFi) is a movement that bears watching. Simply put, DeFi describes approaches that use blockchain technology to enable financial activity without the involvement of a central authority. It includes decentralized exchanges, decentralized money lending, and digital tokens representing any asset, among other initiatives. In particular, Stablecoins (digital currencies whose values are pegged to a fiat currency, commodity or a basket of these assets) have attracted the attention of central banks, and they are researching and trialing the implementation of central bank digital currencies (CBDCs). Sweden's Riksbank kicked off a project in 2017 to examine the potential launch of 'e-krona.' The Bank of France has announced plans to pilot a CBDC for financial institutions in 2020, and is advocating the development of a DLT-based settlement system for the eurozone.
Beyond finance, businesses in the manufacturing space are also looking into blockchain, IoT and other disruptive innovations to position themselves for the future as they encounter competition from nontraditional new entrants. According to our VotE: Digital Pulse Q4 2019 survey, 52% of organizations in the manufacturing space are at least considering the implementation of blockchain technology to enhance transparency and trust at every stage of the industrial value chain.
In particular, the Mobility Open Blockchain Initiative – which includes large OEMs such as BMW, Ford, General Motors and Renault, vehicle-part manufacturers like Bosch and ZF, major IT firms such as Accenture and IBM, and blockchain industry groups like ConsenSys and Hyperledger – is actively exploring blockchain-based supply chain management (e.g., tracing vehicle and mobility data across OEMs and external parties in real time), among other mobility-related use cases.
Financial service firms have been investing in blockchain specialist startups. Key investors include Citigroup, CME Group, Goldman Sachs Group, Wells Fargo and JPMorgan Chase. In 2019, global payments giant Visa acquired Earthport, a British supplier of cross-border payments software and services focused on blockchain, and PayPal joined the extension of a series A funding round in blockchain-based identity startup Cambridge Blockchain.
Decentralized finance (DeFi) is a movement that bears watching. Simply put, DeFi describes approaches that use blockchain technology to enable financial activity without the involvement of a central authority. It includes decentralized exchanges, decentralized money lending, and digital tokens representing any asset, among other initiatives. In particular, Stablecoins (digital currencies whose values are pegged to a fiat currency, commodity or a basket of these assets) have attracted the attention of central banks, and they are researching and trialing the implementation of central bank digital currencies (CBDCs). Sweden's Riksbank kicked off a project in 2017 to examine the potential launch of 'e-krona.' The Bank of France has announced plans to pilot a CBDC for financial institutions in 2020, and is advocating the development of a DLT-based settlement system for the eurozone.
Beyond finance, businesses in the manufacturing space are also looking into blockchain, IoT and other disruptive innovations to position themselves for the future as they encounter competition from nontraditional new entrants. According to our VotE: Digital Pulse Q4 2019 survey, 52% of organizations in the manufacturing space are at least considering the implementation of blockchain technology to enhance transparency and trust at every stage of the industrial value chain.
In particular, the Mobility Open Blockchain Initiative – which includes large OEMs such as BMW, Ford, General Motors and Renault, vehicle-part manufacturers like Bosch and ZF, major IT firms such as Accenture and IBM, and blockchain industry groups like ConsenSys and Hyperledger – is actively exploring blockchain-based supply chain management (e.g., tracing vehicle and mobility data across OEMs and external parties in real time), among other mobility-related use cases.
Supply-chain management is a top application area for blockchain technology. Asset traceability has been attracting substantial attention across industries, with businesses reporting cost savings by being able to spot and seize counterfeit or damaged products – e.g., diamonds, fine art, fine wine, food, IT equipment – before those get to the customer. Examples include Everledger's diamond provenance platform, which currently traces over two million diamonds. The company is expanding into other industries with high-value assets (e.g., colored gemstones and fine wine).
The IBM Food Trust is a generally available blockchain-based SaaS offering that is aimed at providing traceability to improve food transparency and supply-chain efficiency. SAP's Information Collaboration Hub for Life Sciences is an offering that has been purpose-built to protect against counterfeit and fraud, comply with regulations, and enhance efficiency in pharma supply chains. Telefonica deploys blockchain (alongside IoT, data/visual analytics and other technologies) for supply-chain management across customer-premises equipment and field technicians.
The IBM Food Trust is a generally available blockchain-based SaaS offering that is aimed at providing traceability to improve food transparency and supply-chain efficiency. SAP's Information Collaboration Hub for Life Sciences is an offering that has been purpose-built to protect against counterfeit and fraud, comply with regulations, and enhance efficiency in pharma supply chains. Telefonica deploys blockchain (alongside IoT, data/visual analytics and other technologies) for supply-chain management across customer-premises equipment and field technicians.
Csilla Zsigri
Senior Analyst - Blockchain & Distributed Databases
Csilla is a senior analyst for 451 Research’s Data, AI & Analytics channel. She currently focuses on decoding the blockchain market to help replace confusion and complexity with an examination of the technology, the competitive landscape and available solutions that are driving the market, as well as real-world use cases and deployments.
Jeremy Korn
Associate Analyst
Jeremy Korn is an Associate Analyst for the Data, AI & Analytics Channel at 451 Research, where he covers artificial intelligence and machine learning in the enterprise. In particular, he focuses on the legal and ethical challenges raised by these emerging technologies. In addition, Jeremy helps lead the Voice of the Enterprise: AI and Machine Learning survey, which provides qualitative insights into AI adoption, use cases and infrastructure.
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.