While the start-up side of the distributed ledger industry remains an unresolved flurry of innovation, the enterprise side has largely consolidated into traditional enterprise offerings with blockchain security injected in. While reports from McKinsey depict the current state of global purchases of enterprise blockchain-based solutions to have fallen short of previously anticipated estimates, the need to stay competitive in the marketplace and to secure data in defense against destructive data breaches lends distributed ledger technology as a strong candidate for active research within companies. Many c-suite executives in charge of determining the value of such blockchain-backed software existing in the space today — like SaaS, point solutions, and custom builds — have a number of criteria that they use in determining whether the tangible and intangible value proposition equates to a return on investment.
Given the diversity of management structures and technologies within each organization considering a distributed-ledger-based solution for their needs, there’s no universal standard for a box-ticking checklist on whether this type of immutable record-keeping is right for your organization. Where one organization prioritizes customer-service expediency, another requires rigid compliance for user security. While these sorts of preferences prohibit a one-size-fits-all approach to generating corporate norms across the board, we have developed an understanding of a few of the high-priority items that our enterprise clients regard as foundational to the decision-making process and overall future viability of regular distributed ledger technology adoption.
Below we have the compiled list of some of these essentials that corporate customers don’t want to have to be uncertain about when purchasing a distributed ledger based solution, meaning that these items are desired to either be included as value-added or otherwise baked right into the software.
Triage Support Availability
When everything is operating according to plan, all is well in the world. When there is a problem with a mission-critical process that internal experts can’t resolve, there is a crisis. Contingency planning is a core component of any enterprise strategy working with software, and is particularly top of mind when it comes to nascent technologies being utilized. When things go south, having a vanguard on hand to attend to unforeseen complications at a moment’s notice is quite an asset to have. With expert subject matter experts available for ticket escalation on a 24/7 basis, there is greater security in knowing that your problems will be much more temporary than they would be without outside support.
Data Maintenance and Integrity
While distributed ledgers tout data immutability as a core competency, an individual implementations’ circumstances will determine what tradeoffs need to be made while maintaining a certain tier of enterprise data security. If a private blockchain is installed, and there aren’t enough nodes to maintain even baseline consensus mechanism strength, then data immutability will do little good against a targeted DDOS attack by a hacking group with middle of the road expertise. Flipping the script to a company holding preference of security over transaction mechanics, using a blockchain that looked good on paper may have a Trojan Horse of faults with regard to assurance of packet/message transmission. Sufficed to say, companies value having the balanced troika of fast transactions, assured transmission of transactions, and strong system security.
A company having its routine processes beholden to a busted cog in the system is inconvenient at best and hazardous at worst. That’s very much the risk incurred when you integrate a distributed ledger protocol for the transmission of data within your system’s data layer. If you integrate a distributed ledger protocol that doesn’t have the throughput to process transactions instantaneously, you might develop a queue. If you integrate a distributed ledger protocol that doesn’t have a mechanism in place for administrative oversight of group decisions in a federated network, you risk being at the mercy of voter indecision and hold-ups. Friction points like these may be tough to envisage, so it’s best to keep the potential efficiency pits in mind when choosing a protocol.
First Mover vs Second Mover Trade-Off
In a nutshell: what are the advantages of adopting first and what are the dangers of adopting first. Pioneers can get the gold, but they also get killed. Is it worth it to be the guinea pig? Many SMBs which, in aggregate, comprise the lion’s share of the market say no, preferring risk-averse options while the larger titans of industry produce the first rounds of R&D and field-testing. What’s the likelihood of a distributed ledger solution with lofty claims being the “one to rule them all” and having the best technology underpinning it? With examples from recent history at hand, the possibility of a clear takeaway market leader in the near future is unlikely. And while rash decisions cost millions, we all know stragglers get left behind. It’s certainly a conundrum to determine when is the right time to buy, and especially for those recouping from a recent data breach or looking to overhaul their current systems.
Upkeep & Governance Resolution
While certain upkeep functions can be outsourced to outside help, there will be some routine processes which will require company-specific approaches for operating protocols. Node hygiene checks, software updates, and data analytics are just a few of the different items which will benefit from having at least some in-house skillsets for managing. Strict procedures for managing federated governance of the network will prove useful for conflict resolution down the line. Cross-functional groups of legal, analyst, and sales can guide the company’s position on how to adapt the working solution to future industry norms, standards, and laws.
Learning about the parameters and exceptions of applying a new technology is challenging in and of itself, but the task of relaying that information to others adds new dimensions. On-hand fully-trained staff and complementary training guides can provide an opportunity for knowledge transfer between cohorts charged with distributed ledger implementation and upkeep processes. Through regular scheduled meetings addressing the trends behind the technology at large and within your specific instance, amendments and addendums can be inserted into the training guides, which can then trickle down to those working closer to the steel.
Currently, there is no solution in the space which offers a distributed ledger protocol that perfectly balances distributed data security, network efficiency, and high throughput while meeting all of the practical needs listed above.
So that’s it then, huh? As a customer, I only have 2 options. I can either accept the madness of the space and choose a distributed ledger solution through opting into one of the many contenders out there currently, potentially exposing my customers and employees to the risk of startup naivety and possibility of failure. Or I can be a sitting duck and hope that rent-seeking incentives don’t lead bad actors to steal or corrupt my organization’s data before a clear COTS solution becomes available. This all the while knowing that one wrong step in either case could cost hundreds of thousands to millions of dollars.
Now, there is a third option that our core development team at TxMQ Disruptive Technologies Group has been crafting up.
Our newest distributed ledger product, Aviator, serves to alleviate companies of a very unpleasant decision. Rather than relying on blind faith and the labor of analysts to forecast what the future of blockchain protocols looks like down the line, companies now have the ability to have a solution that allows them to easily interchange one distributed ledger for another.
What does this mean? This means that rather than engaging in horse-betting on what blockchain protocol will “make it”, companies can adopt one and easily make the switch to another if it turns out that the original protocol will no longer fulfill its need. Rather than having to pay copious sums of money to developer teams in order to integrate and replace consensus mechanisms on a piecemeal basis, Aviator provides the infrastructure to easily swap between distributed ledger protocols as needed. While our product is still in development, details and RFIs are available.
Devon Rusinek is a distributed ledger consultant at TxMQ’s Disruptive Technologies Group. He participates in analysis and discussion of key areas within the distributed ledger space including tokenization, micropayments, and supply chain management. LinkedIn Twitter