Blockchain needs to be “out of the box” to take off
A mere one percent of Chief Information Officers (CIOs) have indicated any blockchain adoption within their organisations, and just eight percent are involved in short-term planning or active experimentation with blockchain.
“This provides factual evidence about the massively hyped state of blockchain adoption and deployment,” said David Furlonger, from research and advisory company Gartner, whose CIO survey captured the findings today.
He added: “It is critical to understand what blockchain is and what it is capable of today, compared to how it will transform companies, industries and society tomorrow.”
Some convincing at the board level is clearly still required: 77 percent of respondents said their organisation has “no interest” in the technology and/or no action planned to investigate or develop it.
What Type of Facts are Those?
Helen Disney, the CEO of Unblocked (a hub for blockchain events
She said: “It’s perhaps more valuable to look at blockchain adoption through Gartner’s pace layering approach than simply judging it by the hype cycle.”
“Blockchain is moving on from startups offering peer-to-peer services to companies developing ‘peer-to-peer as a service’ and working more deeply on an infrastructure layer that other organisations can build on,” she added.
“Progress on ‘industralisation’ of blockchain is more likely to come via acquisition of the most successful startups or a core of companies building infrastructure that others can use ‘out of the box’. This low score from CIOs is not that surprising and doesn’t mean that blockchain adoption in enterprise won’t accelerate rapidly in 2018-19 but projects won’t necessarily be built from within existing incumbent firms but rather through collaboration, strategic partnerships or a consortium approach”, she concluded.
Put the Pedal to the Floor?
Of the 293 CIOs whose organisations have already invested in blockchain initiatives, 23 percent said that blockchain requires the most new skills to implement of any technology area.
A further 14 per cent indicated that blockchain requires the greatest change in the culture of the IT department, and 13 per cent believed that the structure of the IT department had to change in order to implement blockchain.
“The challenge for CIOs is not just finding and retaining qualified engineers, but finding enough to accommodate growth in resources as blockchain developments grow,” said Mr Furlonger. “Qualified engineers may be cautious due to the historically libertarian and maverick nature of the blockchain developer community.”
The companies that are making headway are primarily in the telecoms, insurance and financial services sectors, Gartner said.
“Government and utilities sectors are now becoming more engaged due to the heavy focus on process efficiency, supply chain and logistics opportunities. For telecom companies, interest lies in a desire to ‘own the infrastructure wires’ and grasp the consumer payment opportunity.”
I got a few dollars…
Despite widespread CIO (or organisational) disinterest, venture capital continues to flow into distributed ledger technology (where it’s needed: eye-watering token offerings continue to be the norm). One of the latest funds to emerge is China’s Xiong’An Global Blockchain Innovation Fund, which has $1.6 billion to invest in startups.
Supermajor BP, conglomerate Samsung and shipping giant Maersk meanwhile are just some of the blue chips either trialling new blockchain technologies or exploring the decentralised electronic ledger system. Market interest in a Shell and Statoil-backed project, which seeks to modernise physical energy post-trade processes using blockchain, is “overwhelming” according to oil trader Gunvor’s COO Eren Zekioglu.