Welcome!

Blog Feed Post

The Enterprise Leader’s Guide to Blockchain

Are you a blockchain true-believer or skeptic? Do you believe that it will be the next great disruptive technology — changing almost everything about, well, everything — or do you see it as just a bunch of hyped-up, scam-infested gobbledygook?

Blockchain has now entered the public consciousness. You will find journalists and pundits writing about it in major (and not so major) business and news publications everywhere. Everyone from business people to students is discussing it in bars and coffee houses in every corner of the world.

Those engaged in animated conversations about it range from crazy fanatics (this mostly applies to adherents of Bitcoin and the various alternate cryptocurrencies) to outspoken skeptics (you can mostly put our own Jason Bloomberg in this camp).

But most of us fall into the larger category spread over the broad middle between these two ends of the spectrum. For us, we’re just trying to cut through all of the static to understand what all the hubbub is about and, more importantly, the impact it may — or may not — have on our businesses and in our lives.

While Jason has covered blockchain extensively, both for Intellyx as well as in several Forbes articles, he has done so primarily in the context of the cryptocurrency craziness or the emerging blockchain startup sector.

If you’re a business or IT executive, however, I believe there’s a need to step back and look at this emerging and potentially disruptive technology both more holistically and strategically, with the goal of answering a single, essential question when it comes to blockchain in the enterprise context: so what?

What is ‘Blockchain’ Anyway? It’s Not as Clear as You Might Think.

The first challenge to understanding blockchain and its potential impact is that there isn’t even an agreed upon definition of what is or isn’t a blockchain. Adrianne Jeffries, in fact, recently devoted an entire article in The Verge, entitled Blockchain is Meaningless, to this problem.

She writes, “The idea of a blockchain, the cryptographically enhanced digital ledger that underpins Bitcoin and most cryptocurrencies, is now being used to describe everything from a system for inter-bank transactions to a new supply chain database for Walmart. The term has become so widespread that it’s quickly losing meaning.”

The biggest challenge, of course, is that savvy marketers are seizing on the buzziness of the term to market older technologies as blockchain to an eager and unsuspecting market. For enterprise strategists and buyers, it will be critical to look past the buzz to get to the heart of when and where blockchain may be useful in driving some form of competitive business value for the organization.

While I won’t attempt to choose the ‘right’ blockchain definition here, it may be helpful to ditch the blockchain term altogether and instead use the more generic and accurate, distributed ledger technology (DLT), as a way to center your thinking.

The essence of blockchain, after all, is that organizations can write data immutably and transparently to a shared and distributed ledger (although more on these characteristics in a bit), thereby enabling parties to create a decentralized, yet trusted exchange. (For the sake of continuity, I’m going to stick with blockchain in this article.)

However you decide to define blockchain or DLT, there is a broader mental shift that will be even more helpful.

You should separate the conceptualization of blockchain technology and the characteristics it imbues, from how startups may use blockchain to disrupt industries or create all-new business models. (Although if you want help evaluating these types of blockchain start-ups, check out Jason’s article, Seven Criteria for Evaluating a Blockchain Business.)

In the enterprise context, these startups and their hopeful ambitions are interesting, but only mildly instructive. Instead, you should be looking at the characteristics that are at the conceptual core of blockchain and examine how your organization might use them as a disruptive tool or how a competitor (or startup) may wield them as a disruptive weapon against you.

In this context, however, it is less about picking winners or losers, and more about seeing the big picture of possibilities, their underlying strengths and vulnerabilities, and the impact they may have on the nature of how enterprises function and go-to-market.

As the last wave of potentially disruptive technologies emerged, it was a failure of enterprise imagination that enabled, at least in part, the current wave of so-called digital disruption. This is your chance to avoid making the same mistake twice.

The Immutability and Permanence Fallacy

Before we go any further, however, I need to address a fallacy when it comes to blockchain: its immutability and permanence.

One of the reasons that Bitcoin fired up all of the crazy fanatics is that it promised an end to centralized control of currencies (and, in theory, everything). Two of the primary reasons that this decentralization could work is because of blockchain’s purported immutability and permanence — two of the very things that society needs to engender enough confidence and trust in a decentralized model.

The problem is that blockchain may not be quite as immutable or as permanent as its adherents claim.

Angela Walch, associate professor at St. Mary’s University School of Law and research fellow at the Centre for Blockchain Technologies at University College London, discussed the issue of immutability in a recent report published in the Review of Banking & Financial Law.

In this report, she states, “The first conceptual problem is that it is misleading to continue to state that ‘immutability is a characteristic of blockchain technology’ when the records created by both Bitcoin and Ethereum have each been changed at various times, and when they remain subject to 51 percent attacks.” (More on 51 percent attacks in a moment.)

She goes on to explain that there is nothing magical about the technology, and that real-world examples in public blockchains prove “at a minimum that it is problematic to describe blockchain technology as a whole as immutable, when at least some (and perhaps all?) blockchain records may be changed if the people operating the blockchain so choose.”

The net-net? While blockchain’s purported immutability is a powerful feature, business and IT leaders must approach it with eyes wide-open. Data in a blockchain is not somehow written onto a blockchain stone in the sky. It is just an architectural approach and algorithm based on consensus between ledgers that node operators can, under certain circumstances, overwrite or manipulate.

The Problem with Consensus

It is, in fact, blockchain’s consensus model that is both its greatest strength and weakness.

In a recent article in MIT’s Technology Review entitled, In blockchain we trust, authors Michael J. Casey and Paul Vigna, authors of The Truth Machine: The Blockchain and the Future of Everything, explain, “No single entity controls the ledger. Any of the computers on the network can make a change to the ledger, but only by following rules dictated by a ‘consensus protocol,’ a mathematical algorithm that requires a majority of the other computers on the network to agree with the change.”

It is these consensus protocols that provide blockchain’s purported immutability. But it also makes a network subject to the so-called 51% attack, in which a bad actor takes control of 51% of the nodes, ensuring automatic consensus for whatever change he or she may like.

Finally, the permanence attribute of DLT’s is also a bit of a misnomer. The permanence of the record is akin to the permanence of records written to a CD — they may be uneditable, but they are only as permanent as your ability to continually store and access them. With these burgeoning blockchain networks, their permanence is anything but guaranteed.

None of this discussion diminishes the underlying promise of blockchain. Its distributed nature and (mostly) immutable and permanent characteristics offer tremendous opportunities for organizations to reimagine entire business models and supply chains. But enterprise leaders should evaluate these applications of the technology with a cautious eye and not allow grandiose promises to seduce them into forgetting the truths about how technology works.

The Intellyx Take

The foundational transformation that will occur with blockchain is the transformation of trust. Or, more specifically, the nature of how trust is created and sustained.

It is the conveyance of trust that intermediaries have provided in the economy. Absent intermediaries, it is the verification of transactions, absent trust, that has consumed vast amounts of enterprise resources. This paradigm is what blockchain may change.

As an enterprise leader, therefore, you must look at the application of blockchain technology through this lens, and with its characteristics of immutability, permanence, security, and decentralization in mind.

With that perspective, it will be easy to skip over most of the muck about blockchain in the press and get down to the nitty-gritty of examining where the risks and opportunities will lie in the future. Moreover, you will be prepared to seize the opportunities and protect against the risks — if and when this foundational technology finally changes everything.

Copyright © Intellyx LLC. Intellyx publishes the Agile Digital Transformation Roadmap poster, advises companies on their digital transformation initiatives, and helps vendors communicate their agility stories. As of the time of writing, none of the organizations mentioned in this article are Intellyx customers. Image credit: Tobias Begemann.

Read the original blog entry...

More Stories By Jason Bloomberg

Jason Bloomberg is a leading IT industry analyst, Forbes contributor, keynote speaker, and globally recognized expert on multiple disruptive trends in enterprise technology and digital transformation. He is ranked #5 on Onalytica’s list of top Digital Transformation influencers for 2018 and #15 on Jax’s list of top DevOps influencers for 2017, the only person to appear on both lists.

As founder and president of Agile Digital Transformation analyst firm Intellyx, he advises, writes, and speaks on a diverse set of topics, including digital transformation, artificial intelligence, cloud computing, devops, big data/analytics, cybersecurity, blockchain/bitcoin/cryptocurrency, no-code/low-code platforms and tools, organizational transformation, internet of things, enterprise architecture, SD-WAN/SDX, mainframes, hybrid IT, and legacy transformation, among other topics.

Mr. Bloomberg’s articles in Forbes are often viewed by more than 100,000 readers. During his career, he has published over 1,200 articles (over 200 for Forbes alone), spoken at over 400 conferences and webinars, and he has been quoted in the press and blogosphere over 2,000 times.

Mr. Bloomberg is the author or coauthor of four books: The Agile Architecture Revolution (Wiley, 2013), Service Orient or Be Doomed! How Service Orientation Will Change Your Business (Wiley, 2006), XML and Web Services Unleashed (SAMS Publishing, 2002), and Web Page Scripting Techniques (Hayden Books, 1996). His next book, Agile Digital Transformation, is due within the next year.

At SOA-focused industry analyst firm ZapThink from 2001 to 2013, Mr. Bloomberg created and delivered the Licensed ZapThink Architect (LZA) Service-Oriented Architecture (SOA) course and associated credential, certifying over 1,700 professionals worldwide. He is one of the original Managing Partners of ZapThink LLC, which was acquired by Dovel Technologies in 2011.

Prior to ZapThink, Mr. Bloomberg built a diverse background in eBusiness technology management and industry analysis, including serving as a senior analyst in IDC’s eBusiness Advisory group, as well as holding eBusiness management positions at USWeb/CKS (later marchFIRST) and WaveBend Solutions (now Hitachi Consulting), and several software and web development positions.

Latest Stories
"Space Monkey by Vivent Smart Home is a product that is a distributed cloud-based edge storage network. Vivent Smart Home, our parent company, is a smart home provider that places a lot of hard drives across homes in North America," explained JT Olds, Director of Engineering, and Brandon Crowfeather, Product Manager, at Vivint Smart Home, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Modern software design has fundamentally changed how we manage applications, causing many to turn to containers as the new virtual machine for resource management. As container adoption grows beyond stateless applications to stateful workloads, the need for persistent storage is foundational - something customers routinely cite as a top pain point. In his session at @DevOpsSummit at 21st Cloud Expo, Bill Borsari, Head of Systems Engineering at Datera, explored how organizations can reap the bene...
In this presentation, you will learn first hand what works and what doesn't while architecting and deploying OpenStack. Some of the topics will include:- best practices for creating repeatable deployments of OpenStack- multi-site considerations- how to customize OpenStack to integrate with your existing systems and security best practices.
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and G...
"DevOps is set to be one of the most profound disruptions to hit IT in decades," said Andi Mann. "It is a natural extension of cloud computing, and I have seen both firsthand and in independent research the fantastic results DevOps delivers. So I am excited to help the great team at @DevOpsSUMMIT and CloudEXPO tell the world how they can leverage this emerging disruptive trend."
The current age of digital transformation means that IT organizations must adapt their toolset to cover all digital experiences, beyond just the end users’. Today’s businesses can no longer focus solely on the digital interactions they manage with employees or customers; they must now contend with non-traditional factors. Whether it's the power of brand to make or break a company, the need to monitor across all locations 24/7, or the ability to proactively resolve issues, companies must adapt to...
You want to start your DevOps journey but where do you begin? Do you say DevOps loudly 5 times while looking in the mirror and it suddenly appears? Do you hire someone? Do you upskill your existing team? Here are some tips to help support your DevOps transformation. Conor Delanbanque has been involved with building & scaling teams in the DevOps space globally. He is the Head of DevOps Practice at MThree Consulting, a global technology consultancy. Conor founded the Future of DevOps Thought Leade...
DXWorldEXPO LLC announced today that ICC-USA, a computer systems integrator and server manufacturing company focused on developing products and product appliances, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City. ICC is a computer systems integrator and server manufacturing company focused on developing products and product appliances to meet a wide range of ...
René Bostic is the Technical VP of the IBM Cloud Unit in North America. Enjoying her career with IBM during the modern millennial technological era, she is an expert in cloud computing, DevOps and emerging cloud technologies such as Blockchain. Her strengths and core competencies include a proven record of accomplishments in consensus building at all levels to assess, plan, and implement enterprise and cloud computing solutions. René is a member of the Society of Women Engineers (SWE) and a m...
In his session at 20th Cloud Expo, Mike Johnston, an infrastructure engineer at Supergiant.io, discussed how to use Kubernetes to set up a SaaS infrastructure for your business. Mike Johnston is an infrastructure engineer at Supergiant.io with over 12 years of experience designing, deploying, and maintaining server and workstation infrastructure at all scales. He has experience with brick and mortar data centers as well as cloud providers like Digital Ocean, Amazon Web Services, and Rackspace. H...
Everyone wants the rainbow - reduced IT costs, scalability, continuity, flexibility, manageability, and innovation. But in order to get to that collaboration rainbow, you need the cloud! In this presentation, we'll cover three areas: First - the rainbow of benefits from cloud collaboration. There are many different reasons why more and more companies and institutions are moving to the cloud. Benefits include: cost savings (reducing on-prem infrastructure, reducing data center foot print, redu...
DXWorldEXPO | CloudEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
Founded in 2000, Chetu Inc. is a global provider of customized software development solutions and IT staff augmentation services for software technology providers. By providing clients with unparalleled niche technology expertise and industry experience, Chetu has become the premiere long-term, back-end software development partner for start-ups, SMBs, and Fortune 500 companies. Chetu is headquartered in Plantation, Florida, with thirteen offices throughout the U.S. and abroad.
DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. Digital Transformation (DX) is a major focus with the introduction of DXWorldEXPO within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term.
The technologies behind big data and cloud computing are converging quickly, offering businesses new capabilities for fast, easy, wide-ranging access to data. However, to capitalize on the cost-efficiencies and time-to-value opportunities of analytics in the cloud, big data and cloud technologies must be integrated and managed properly. Pythian's Director of Big Data and Data Science, Danil Zburivsky will explore: The main technology components and best practices being deployed to take advantage...