Blockchain on Cloud

The key to increasing production environments among diverse members

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Vendors are raising the stakes in the blockchain market segment, looking to differentiate by proving interoperability between disparate blockchain implementations and cloud platforms. The industry is moving beyond the education and PoC stage and into a phase which aims to demonstrate how blockchain performs in production. This requires proof of portability among partners and disparate blockchain projects.

IBM is looking to dominate in blockchain after investing millions of dollars and attaining an early lead in the emerging market, following a move late last year to accelerate its blockchain anywhere strategy and offer its blockchain platform in new cloud environments, including AWS through a QuickStart template, but also leveraging IBM Cloud Private and enabling on-premises capabilities and deployments to other public clouds including Azure. During this year’s IBM Think, blockchain execs noted of its customers’ 1,200 blockchain networks, 100 are now live, illustrating an even greater need for interoperability. To that end, IBM featured its free beta version of the next generation of IBM Blockchain Platform, componentized to better manage compute, work with Kubernetes containers and operate in hybrid and multi-cloud environments. IBM differentiates via high-value services such as its console for viewing the topology of network activities and for managing scaled networks including performance and permissioning details, as well as view resources (e.g., number of blocks, memory, CPU usage).

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The upgrades are a result of customers’ request for a multi-cloud native offering which would ensure that new partners can be quickly and easily added without having to purchase IBM solutions. IBM’s messaging that enterprises need the breadth of its comprehensive application platforms lifecycle management (APLM) portfolio of management, security, and governance solutions to address mature blockchain deployments is compelling to global customers under increased pressure and regulations to protect client data. Having operational tooling available ensures governance is maintained across multi-cloud (Azure, IBM Cloud, on-premises, etc), including the ability to create channels and add members to channels. This tooling is further enabled by IBM’s release of its blockchain platform for VSCode, helping to drive programmability.

The burgeoning development of discrete distributed ledger platforms, each potentially highly domain-specific in support of a closed set of like-minded participants, has led to a highly fractured market where the unavoidable selection of a primary blockchain platform imposes a costly degree of vendor (or ecosystem) lock-in. In announcing what is essentially an interoperability node that sits between disparate systems such as Ethereum, Bitcoin and Hyperledger, technology providers including IBM and Accenture are promising customers a chance to share transactions and information between two or more platforms. The solutions, however, do not guarantee transparent and immediate interoperability, as each participating platform (or ecosystem on that platform) must agree to a common set of business rules, policies, standards and governance. Vendors are simply developing a means of integration that preserves the functional nature of a distributed ledger by codifying those rules, policies, etc.

Additionally, vendors are still working out how to monetize and sell blockchain platforms and solutions, fully aware of customers’ need for flexibility in scaling their blockchain networks. IBM is addressing this issue in its latest platform version, which currently is offered as a free beta but will later be based on (pay as you go) usage and compute (vCPUs) allocated to the services, an approach where enterprises have more familiarity. This move towards honing its pricing strategy behooves IBM because it provides incentive for customers to grow and scale their blockchain use. It also helps IBM challenge blockchain platform rivals on whether they are able to support economies of scale. Having a more scalable pricing model according to different use requirements among member partners will be especially helpful to IBM’s blockchain customers looking to more easily grow their consortium memberships, and help those consortiums to move from development to production more seamlessly. (Note, IBM does not currently publish its pricing for its next generation platform, currently free while in beta).

We are now entering a time of what IBM calls, the “network of networks,’’ which represents the agnostic, decentralized network which blockchain has always promised. The industry is not yet there, but ultimately this will be achieved by connecting multiple fabric networks together or through compatibility between Fabric and Ethereum (via Ethereum Virtual Machine/Solidity), with key blockchain participants and communities moving in that direction. For example, initial efforts are underway through the sharing of smart contracts, enabled through the partnership between Hyperledger and Enterprise Ethereum Alliance late last year to ensure interoperability between solutions. Similarly, last year IBM joined HACERA’s registry network, which provides companies with access to existing blockchain networks and solutions built on various frameworks including Hyperledger Fabric, Ethereum Quorum, R3 Corda, and others. Participating vendors include IBM, Oracle, Microsoft, SAP, and others.

These efforts are encouraging, providing the type of ecosystem cooperation which industry observers and customers have been asking for among technology providers. Interoperability between blockchain protocols (if desired) can be accomplished presently at the application level, while work around integrating multiple blockchain protocols together at the framework level is still underway.

From time to time, we invite industry thought leaders, academic experts and partners, to share their opinions and insights on current trends in blockchain to the Blockchain Pulse blog. While the opinions in these blog posts are their own, and do not necessarily reflect the views of IBM, this blog strives to welcome all points of view to the conversation.

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Principal Analyst, Cloud Services - GlobalData Technology

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