Is FOMO making enterprises unnecessarily leap into blockchain?
Before beginning a blockchain or distributed ledger technology (DLT)-based project, analyst firm Gartner wants those making the decisions to take a look at the technology currently available, as it likely will do the job.
VP and Gartner fellow David Furlonger suggests steering clear of jumping on the blockchain bandwagon just yet, at least if it's just something an organisation is doing out of fear of missing out.
"This is still very early days here; this is part and parcel of the noise that you often experience when we're at these paradigm changes," Furlonger told the Gartner Symposium/ITxpo on the Gold Coast on Wednesday.
"I think that it's still not appropriate for the vast amount of enterprises to consider blockchain technology in its current level of maturity."
Furlonger doesn't believe blockchain addresses sufficient levels of mission criticality, and said there are some technological issues that need to be addressed, particularly in the way corporations interact, be it down a supply chain, how information sharing is managed, or security of assets in general.
"It's not to say this won't be solved. We've got to take it carefully over the next few years until we get to a stronger point of robustness both within the technology but also within the business itself," he explained.
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Discussing the notion of a "paradigm of centralised control" around customers, products, and a manufacturing environment, Furlonger said it's crucial to consider if organisations actually want this to happen.
"Are we prepared to relinquish some of that control, maybe to a consortia environment, maybe into an association of affiliated enterprises -- what are the boundary levels for that and how is that going to impact our ability to make money, to generate revenue for our stakeholders?" he asked.
With many definitions of what exactly blockchain or DLT is, Furlonger said it certainly isn't how enterprise vendors are describing it
"Blockchain is not -- in fact, it's nothing really like -- any form of centralised database, it is not just a messaging infrastructure," he said.
"Blockchain has five core elements to it. In part, yes there is some kind of immutable record, and yes there is encryption, and yes there is some form of distributed compute involved -- none of that is new and you can do all of that today with existing technology you're perhaps more familiar with."
The other two elements blockchain provides, which he said are vastly different to existing paradigms, is the notion of a decentralised consensus protocol and tokenisation.
"If all you want to do is ignore tokenisation and ignore decentralisation, and you want to replicate or re-platform your enterprise using some form of relational database in the cloud and stick some encryption on it ... you can call that blockchain if you want, but I don't really think that's what we're talking about with blockchain," Furlonger said.
"If you do that, I don't think it's massively going to impact your business model.
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"If you want to layer on top of that or include the bigger definition which would be more decentralised consensus and tokenisation, that is fundamentally going to change your business model."
To Furlonger, adding blockchain to the applications and infrastructure already in place within an organisation for no good reason is merely creating an even bigger layer of technical debt. He also likened a vendor spruiking a blockchain solution to purchasing a new phone -- it's just a shiner version of something already owned.
"In the foreseeable future, if you have a CEO that's coming down to you and is very worried about FOMO, it seems pretty clear to us that there should not necessarily be any fear here. What exactly are you trying to do? This is not a solution that is looking for a problem," he continued.
"You need to understand what the problem is that blockchain ... is going to address, bearing in mind all of the regulatory issues, the jurisdictional issues and everything else that you have to look into."
Disclosure: Asha Barbaschow travelled to Gartner Symposium/ITxpo as a guest of Gartner.
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