Blockchain: Governance not technology now the greatest challenge, IBM says

IBM will shortly begin offering its blockchain platform from a second Australian data centre

The technology to build scalable, enterprise-ready blockchain solutions is ready for prime time, but governance remains a challenge for many organisations, according to the head of IBM’s local blockchain practice.

Rupert Colchester, IBM’s head of blockchain and consulting practice leader for Australia and New Zealand, said much of his work is focused on how companies or networks of companies or consortiums can establish the “governance model that’s required to share data in a new way”.

“Sometimes that sharing of the data is underpinned by a shared business process of sorts,” Colchester said. “Sometimes it is simply sharing data on which everybody carries out their own business process. But agreeing those data models, the ownership of data, the governance models — from the legal perspective, commercial perspective, and technology perspective — that does require time.”

“The reality is you can get from no lines of code to a live pilot, let's say, in 10 weeks or so now,” he said. “It really can be very quick. The journey to production and hardening things up for an actual regulated enterprise of course takes a little longer, but they are increasingly things we have experience in doing and can do it at speed now for people.”

Although it still requires talented software engineers, blockchain technology “by and large can deliver what people want it to deliver at the moment”.

“Now, what remains new are new business models, new governance structures around data; in some cases, around sharing data with a competitor of yours,” he said. “That remains something that people need to progressively address. You can't just click your fingers and have the perfect governance model signed off by the people you need to sign it off. “

IBM currently offers its blockchain platform from its Melbourne data centre and the company intends to make it available from its Sydney data centre in Q1, he said.

Being able to offer data sovereignty to local clients is a big step forward for the Australian market, Colchester added, and the local data centres also significantly reduce latency.

IBM’s platform is built on top of the Linux Foundation-stewarded open source Hyperledger project. Hyperledger “has established itself as a really leading project in the world of enterprise blockchain,” Colchester said.

Hyperledger comprises half a dozen frameworks (Burrow, Fabric, Grid, Indy, Iroha, Sawtooth) and the same number of tool projects (Caliper, Cello, Composer, Explorer, Quilt and Ursa). IBM’s blockchain platform is built on Hyperledger Fabric.

“Hyperledger Fabric has really established itself as the most commonly used blockchain protocol for enterprise applications, and it's done so through plug-able consensus mechanisms, through scalability, which suits business applications of blockchain, through the attention it's paid to security,” Colchester said.

“They are facets that, on top of the Hyperledger suite, and the open standards, open governance, and of course, open source nature of it all, make it very compelling to companies, organisations, governments, etc., that are looking to develop blockchain applications.”

Fabric itself is “extremely well established” and “progressing very fast”.

He argued the IBM Blockchain Platform is “very much built for production” and “truly enterprise ready” — including by a bank or major government organisation — but is also useable by a startup or smaller-scale application developer team.

With blockchain the challenge facing enterprises still remains separating the reality from the hype. Late last year, the message from a local Gartner-organised gathering of technology chiefs was that enterprises shouldn’t rush into blockchain.

“It's still not appropriate for the vast majority of enterprises to consider blockchain technology at its current level of maturity,” Gartner research fellow David Furlonger told the analyst firm’s annual Symposium on the Gold Coast.

Similarly, scrutiny by the government’s Digital Transformation Agency of the technology concluded that in most of the cases considered by organisations, they would probably be better off with an alternative, better-known solution.

“If you did a true survey of the global landscape, of course you would see different levels of progress” when it comes to blockchain, Colchester said. He says from IBM’s global perspective, and his year or so working in the Australia and New Zealand markets (having relocated from the UK) there are signs of “significant maturity now in what clients are doing”.

“There is considerably less focus on proofs of concept, and there is a lot more ambition and drive from companies to quickly move to pilots using live data or real data and into product systems that will then ultimately take the place of or start to complement existing systems,” he said.

“I used to do lots of education sessions; I very seldom now walk into a client's office and need to explain what blockchain is. The conversation now is much more, ‘How do I navigate through this journey quickly? I'm sure that I've got something conceptually that works. I believe the business case works in perhaps needs some help assessing that, but ultimately, I want to make this happen.’

“There's a speed, and there's an impetus, and there's a desire to move quickly through to those production-level applications now.”

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