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Enterprise Blockchains – A Pragmatic & Realistic Guide for CIOs/CDOS


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Enterprise Blockchains – A Pragmatic & Realistic Guide for CIOs/CDOS – an Iceventure briefing

Background for the Enterprise Blockchain briefing
The blockchain promises to alter the way business transactions, data storage, industry value chains and associated revenue models. And unlike other innovation first deployed by start-ups many Enterprises as well as SMEs investigate the various use cases.
For example, Banking & Financial Services is the leading sector in enterprise blockchain adoption with a high number of PoCs. Adoption of use cases around payments, trade finance, and wallets are advancing rapidly.

Challenges for Enterprises/SMEs adopting an Enterprise Blockchain
But the novelty of the Enterprise Blockchain technology brings also about a lot of questions asked by market participants and our customers alike. Some examples are:

How to evaluate the advantages/disadvantages
What are the value drivers
Fitting it into the existing IT landscape
Where is the market and what are my risks

In a webinar, we therefore discuss the challenges of a successful Enterprise Blockchain use-case to separate the hype from reality. We also introduce a framework for evaluation

Watch the slides for:
A picture of the possibilities and challenges of the Blockchain
The Blockchain technology in the Enterprise context
A different use case valuation approach
An overview of the current market with focus on Germany

All Iceventure studies:

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Enterprise Blockchains – A Pragmatic & Realistic Guide for CIOs/CDOS

  2. 2. ICEVENTURE BRIEFING July 2018 Today‘s speakers • Arnbjörn Eggerz • Timothy Robb
  3. 3. ENTERPRISE BLOCKCHAIN ECOSYSTEM - GERMANY Blockchain Tools and Software Providers Rubix Academia, regulators, and not- for profits Blockchain Solution Providers Service Providers Consultants Consortiums Startups Blockchain Platforms and Frameworks Permissioned (Private/Hybrid) Fabric Corporations Partners Clients/Users Illustrative, not comprehensive 07-2018 © Iceventure - Share with mention or link Academia, regulators, and not- for profits
  4. 4. AGENDA: BLOCKCHAINWITHTHE EYES OF A CIO • Technology • The key problems of Blockchains • The problem with the most prominent Blockchain app Bitcoin – too expensive • Forget public blockchains – Enterprise blockchains made for you • But you need to worry of Security, Reliability, Scalability and Costs … and integration • Value Add, Costs and future of IT • What is relevant for Enterprise blockchain • Value capture definition, not use cases • Cost & structural comparison to cloud // SaaS // databases • Make or buy • Integration • Enterprise Blockchain projects – what do we know about active projects
  5. 5. BITCOIN – TOO EXPENSIVE • original Blockchain structure scales badly • Energy, computing requirements and transaction time skyrocket with transaction and participant increase • This known problem can be reduced by configuring and changing some of the underlying components (in particular the so-called consensus protocol).
  6. 6. WHAT IS RELEVANT FOR ENTERPRISE BLOCKCHAINS • “Classic” Blockchain: • Anonymous • Immutable • Transparent • Decentral • Trustless • Enterprise Blockchain: • Private • Permissioned • Centrally governed • Based on trust to the central authority • Different methods for reaching consensus, which largely drive the extreme differences in performance and characteristics.
  7. 7. External Environment Partners Vendors Customers Regulation Organization Line of Business Business Units Departments/Teams Stakeholders Functions Business Functions Business Functions Taxonomy v Processes Business Processes Business Processes Taxonomy Events Business Objects Business/ Market Rules Activities Roles Business Data Business DataMetadata Data Flows Data Translation Business Data Taxonomy Enterprise Architecture: IT Layers Data ExchangeData Mgmt. Security Remote Access Location & Directory File Mgmt. Graphics & Imaging Operating System User Interface Software Localization Transaction Processing Systems & Networking Mgmt. Services System Applications Interfaces Databases Infrastructure Network Devices SAN/NAS Firewalls Servers Custom Devices Cabling Racks UPS Virtual/Physical Environment Communication Circuits
  8. 8. VALUE CAPTURE DEFINITION • New Business Models • Radical digitalization of legacy IT • Transformation and improvements • Automated transaction management, self-organizing (smart contracts) • Reduced transaction cost • Efficiency, effectiveness, cost improvements due to replacing legacy/obsolete software infrastructure
  9. 9. VALUE CAPTURE DEFINITION • Our approach: • In the well-defined Enterprise IT landscape it is either a new business case or an IT replacement case • Two requirements • Needs to lower costs or be at par • Needs to add value -> driver usage of decentralized data • Value creation valuation framework • Platform/marketplace – for the value add due to decentralized design • Comparison to SaaS / database solution – for scales
  10. 10. APPLYING THE FRAMEWORK • Blockchain has a strong value proposition as a way for non-trusting entities to transact. • Following theValue CreationValuation Framework, this makes blockchain an interesting alternative for all use cases which can be framed as marketplaces. As such, finance and trading is an obvious choice. For commodities, particularly for energy, the case is even stronger, as decentralization can drive participation effects (and likely network effects) also for non-typical actors (prosumers). • Other cases are more dependent on efficiency gains.
  11. 11. INDUSTRY BLOCKCHAIN INITIATIVES HEATMAP Trading Banking Finance Insurance Energy Supply Chain Manufacturing Logistics Information Coordination Life Sciences Healthcare Media Public Sector Services Accounting Legal Real Estate
  12. 12. INDUSTRY BLOCKCHAIN INITIATIVES HEATMAP Trading Banking Finance Insurance Energy Supply Chain Manufacturing Logistics Information Coordination Life Sciences Healthcare Media Public Sector Services Accounting Legal Real Estate Marketplace Replacement
  13. 13. COMPARISONTO CLOUD // SAAS // DATABASES • Central Architecture: Everything is in the Cloud • Servers • SaaS Applications • Databases Cheap and easy access • Decentral Architecture: Everything is Everywhere • DLTs • Decentral Apps (Dapps) • Decentral Databases No single point of failure Scales //TCO // OpEx Distributed // Secure
  14. 14. MAKE OR BUY – COST POINTS Make • Development costs • Deployment costs • Ppossibly hardware upgrades • Maintenance, support and security running costs • Projekt risk Buy • Software configuration costs • Hosting or aaS subscription running costs
  15. 15. Decentral SecureScalable If the blockchain isn’t decentral, why use a blockchain? If the blockchain isn’t scalable, why use a blockchain? If the blockchain isn’t secure, why use a blockchain? If it was all three, what’s the business model? CURRENT STATE OF THE ART: YOU ONLY GET 2
  16. 16. DOYOU NEED A BLOCKCHAIN? Do you need a shared database? Do you need shared write access for multiple parties? Do the parties mistrust each other? Is it unfeasible/unwanted to use a trusted third party? Do you need a verifiable, unchangeable ledger? If you answered any of the questions with NO, then you probably do not need a blockchain. But even if you answered every question withYES, does not necessarily mean that a blockchain is the best solution for you.
  18. 18. ENTERPRISE BLOCKCHAIN PROJECTS: WHAT DO WE KNOW? Phase 1 R&D Solution Design Phase 2 PoC/Pilot Phase 3 Final Implementation Production On the Market Vast majority of projects is here
  19. 19. ENTERPRISE BLOCKCHAIN PROJECTS: WHAT DOWE KNOW? • Over 80 blockchain startups in Germany • Over 15 cooperations and blockchain projects by large corporations • The big SaaS/IaaS players offer blockchain-related services • However, mostly PoCs are announced and implemented.There are few known cases of efforts to go into production. • In fact, there are first cases of Blockchain products going off the market (Share & Charge) or being spun out of the corporation (ZF’s Car eWallet)
  20. 20. NOTABLE ENTERPRISE BLOCKCHAIN STARTUPS Energy ▪ Adpteve ▪ Conjoule ▪ EnerChain ▪ Energy Web Foundation ▪ GridSingularity ▪ Motion Werk ▪ Share & Charge Enterprise Infrastructure • BigchainDB • Medixain • Monax • Sunato • Tymlez • Unibright • Xain Internet ofThings (IoT) • Weeve (formerly Eciotify) • IOTA • Ubirch •
  21. 21. GERMAN ENTERPRISE BLOCKCHAIN COLLABORATIONS Automotive Company Use Case Startup Consultants/Partners Sector Status Allianz Captive Insurance Ernst & Young, Ginetta Automotive Proof of concept Audi Supply Chain HP Enterprise Automotive Proof of concept BMW Bonus miles Dovu Automotive Proof of concept Daimler, LBBW corporate bond sale TSS, Targens Automotive Proof of concept VW car history Carvertical Automotive Proof of concept ZF Car E-Wallet Automotive Spun off Energy Company Use Case Startup Consultants/Partners Sector Status EON Energy trading Enerchain Energy Proof of concept RWE EV charging infrastructure Energy Proof of concept Siemens decentral energy networks Energy Proof of concept Vattenfall energy trading Enerchain Energy Proof of concept Company Use Case Startup Consultants/Partners Sector Status Commerzbank FX-Forward-Trade Finance and Insurance Proof of concept Deutsche Börse trading Finance and Insurance Proof of concept Munich RE Inter-Company Transactions B3i Finance and Insurance Proof of concept Finance and Insurance
  22. 22. BLOCKCHAIN STUDY 2018 Iceventure publishes a study on the status of Enterprise Blockchain, its risks and opportunities, and costs and benefits in Q4 2018, both for large enterprises and SMBs. It includes case studies and feasibility valuations for supply chains, finances, and EV charging infrastructure.
  23. 23. CONTACT Iceventure Gottfried-Keller-Weg 6 85757 Karlsfeld, Germany Tel.: +49/8131/260224 Tel.: +39/33442578777